How do you decide which crypto currency to buy?

Tesla got $1.5billion in environmental subsidies last year, also invested $1.5 billion in bitcoin, which uses more energy than Argentina

I think Bitcoin is mainstream enough now that it’s got some stability as a result and it’s certainly hard to ignore it as (an albeit high risk) investment opportunity. You’d still be mad to transfer your pension into it though.

I actually told someone not to risk investing in it a couple of years back when it hit £9000, oops :p It’s still prone to dropping sharply but it seems to bounce back pretty soon so worth it as a medium-long term investment IMO.

Other crypto currencies are a bit more of a lottery (I had £500 in now pretty much worthless XRP :p ) but still might be worth it for short term speculative trading but I think it would be hard to get in quickly enough on the spikes to make decent gains.

now that it’s got some stability

What stability? Have you seen a graph of it’s value vs any other currency?

It’s a highly illiquid asset, so any large buys will push the price up significantly and likewise any large sells will casuse a drop.

Hence it’s next to useless as a currency.

Stable currency is something like the £ or $. The price of a basic commodity, eg a pint of milk, varies by bugger all year on year. You expect to see a slow depreciation caused by inflation. You would happily sell a house and hold the money in that currency for 6 months before buying again, knowing it’s pretty safe / stable.

Tesla got $1.5billion in environmental subsidies last year, also invested $1.5 billion in bitcoin, which uses more energy than Argentina

more electricity than argentina, significantly less energy. Still a lot though.

It’s a highly illiquid asset

it really isn’t. Takes a couple of seconds to convert into cash – its not quite as good as a cash holding, but its no more or less liquid than any other ‘asset’ class. Property is a highly illiquid asset, even if you were really keen on pricing, it’d probably take a month to shift some.

it really isn’t. Takes a couple of seconds to convert into cash

Small amounts yes.

Try converting billions without affecting the price. Tesla bought their $1.5b bit by bit over a number of weeks as buying a relatively modest amount would have spiked the price. You can trade a $1.5bn of $ without anyone noticing.

Liquidity isn’t just can you buy or sell, it’s can you buy and sell without causing price fluctuations. To be a currency, rather than a speculative asset, it would need to accomodate billions changing hands every day without causing price fluctuations.

Last time I looked, something like 80% of Bitcoins were tied up by wales / cold storage so effectively illiquid.

Last time I looked, something like 80% of Bitcoins were tied up by wales

Never realised the Welsh had a stranglehold on Bitcoin!

On the liquidity point there is also the issue of whether the systems will allow your transactions to go through if your trying to sell your Bitcoins while the price is crashing and everyone else is doing the same.

Liquidity isn’t just can you buy or sell, it’s can you buy and sell without causing price fluctuations. To be a currency, rather than a speculative asset, it would need to accomodate billions changing hands every day without causing price fluctuations

Isn’t that more of a size thing?
Tesla, in this example, bought something like 0.3% of all Bitcoins. I’m sure buying 0.3% of all USD would have bumped the price a wee bit?

So I know 2020 was a bit weird and 2021 didn’t get off to a great start but here’s a question I didn’t think I’d be asking so early in the year…

Is anyone else hoping to get an airdrop when the Stargate opens?

Talking of airdrop, I signed up to the binance exchange in 2017 and they airdropped 100 BNB to all users, which I completely forgot about. Last year I checked and had £2k worth of BNB which I still didn’t remember so sold and cashed out “before everything crashes”. A mate has just told me one BNB is now worth £100.

That’s nothing – a friend bought a domain for 8btc back in the day. 😭

Ripple (XRP) is spiking – I’m up £23.00 in two weeks! 🤣🤣

Ripple (XRP) is spiking

XRP is a Ponzi scheme… It’s a pump and dump frenzy!

GET OUT whilst you’re up, then forget about it, and put your money in something else… TRUST ME!

It’s a pump and dump frenzy!

Two of my favourite things!! 🙂

Don’t worry , I’m just playing – not got my life’s savings in it.

Isn’t that more of a size thing?
Tesla, in this example, bought something like 0.3% of all Bitcoins. I’m sure buying 0.3% of all USD would have bumped the price a wee bit?

Yes, but for those saying that BC is stable and mainstream, it would have to be able to accomodate trillions of $ worth of transactions without causing the price to spike by x trillion percent, which it blatantly can’t.

In terms of the markets as a whole, Tesla’s purchase was really really really small and yet it was a ‘big deal’ for BC, which shows it’s no where near being a viable currency.

Never realised the Welsh had a stranglehold on Bitcoin!

Very rich sheep!

In terms of the markets as a whole, Tesla’s purchase was really really really small and yet it was a ‘big deal’ for BC, which shows it’s no where near being a viable currency.

I disagree. they bought $1.5bn dollars. If they’d done the same with Icelandic Krona they would have purchased over 25% of all krona in existance. That would affect the value of the currency – are you saying icelandic krona is not a viable currency?

I’ve just read that even it goes up to $50k per bitcoin – the marketcap will still be less than half of Apple.

I don’t think a Proof of Work based coin will ever be a viable currency but it has the potential to be a long term store of wealth.

I think a Proof of Stake coin has far more chance of becoming a viable currency.

That would affect the value of the currency – are you saying icelandic krona is not a viable currency?

Not to replace Gold / $ which is what some people think BC will do….

I don’t think a Proof of Work based coin will ever be a viable currency but it has the potential to be a long term store of wealth.

I still don’t see what the problem is, that this is a solution to…

We already have plenty of ways of storing wealth eg precious metals. Crypto doesn’t bring anything new to the table, certainly not depth or stability which is what you need for any scale.

I still don’t see what the problem is, that this is a solution to…

It’s generally better to have a solution in place before a problem occurs rather than wait for the problem to occur and then scramble to find a solution.

It could be that the money printing experiment that is happening at the moment will have no adverse effects and the economies of the world will continue in a nice stable trajectory.

Or the central banks could lose control and for the first time in history we see hyperinflation in multiple major economies at once.

We already have plenty of ways of storing wealth eg precious metals.

And as has already been mentioned, governments can seize precious metals in order to force people to buy their currency.

https://en.wikipedia.org/wiki/Gold_Reserve_Act

They could, of course, do the same thing with crypto but then crypto was made with the express purpose of making this as difficult for governments as possible.

China has already tried banning them without much success. If they can’t manage it what chance do western governments have?

Ripple (XRP) is spiking

XRP is a Ponzi scheme… It’s a pump and dump frenzy!

GET OUT whilst you’re up, then forget about it, and put your money in something else… TRUST ME!

Being naive here, but what are you basing that on? For every article that says it’s a scam there’s one saying XRP is the future. (I guess this is just the nature of crypto in general.)

I have bought some XRP and am currently in profit, but someone I work with has invested heavily and she is certain she will be rolling in it one day!

We already have plenty of ways of storing wealth eg precious metals.

Most of them do seem to impact on real life. Not totally sure about gold but the rising price must impact on the electronics industry. Property and land are also popular ways of storing wealth and that really messes up the property market and quite often town centres where land is just held onto rather than developed.

I would stay away from XRP. From wikipedia:

A class action was filed against Ripple in May 2018 “alleging that it led a scheme to raise hundreds of millions of dollars through unregistered sales of its XRP tokens.” According to the complaint, “the company created billions of coins ‘out of thin air’ and then profited by selling them to the public in ‘what is essentially a never-ending initial coin offering’.”[18]

The U.S. Securities and Exchange Commission (SEC) initiated legal proceedings against Ripple Labs, CEO Brad Garlinghouse, and co-founder Chris Larsen on December 21, 2020, for allegedly selling unregistered securities. In the lawsuit, the SEC claimed that XRP was a security instead of a commodity, because it was generated and distributed by Ripple Labs in a centralized fashion and was not being adopted by financial institutions for its advertised use cases.[3] The SEC stated that Ripple executives sold 14.6 billion units of XRP for more than $1.38 billion to fund the company’s operations and enrich themselves.[19]

In response, Garlinghouse criticized the SEC and indicated that Ripple Labs would defend itself in court.[20] Coinbase delisted XRP on December 28;[21] an investor filed a class action on December 30 alleging that Coinbase sold XRP tokens with the understanding that they were unregistered securities.[22]

Or the central banks could lose control and for the first time in history we see hyperinflation in multiple major economies at once.

Whilst that may be true (probably isn’t but let’s be hypothetical), that doesn’t make a cryptographic construct that’s created a speculative bubble a solution any more than it makes bananas or tulips a solution. It would probably be healthier if rather than trying to justify it people just accepted that there may be an opportunity to make money for nothing so lets wade in (FOMO as the influencers/shills like to call it), bearing in mind the words of Joe Kennedy –

“You know it’s time to sell when shoeshine boys give you stock tips.”

any more than it makes bananas or tulips a solution.

I think a large part of the problem is that people think of blockchain in the same way that they think of napster.

You can’t just copy files to create more bitcoins (or any other crypto currency). There are a fixed number and that is it.

Humans place value on rare things. Bitcoins are rare and will continue to be rare. From that point of view there is absolutely no reason for them not to be valuable.

If you’ve ever watched Halt and Catch Fire the line that always stuck with me from that show was this: ‘Computers aren’t the thing. Computers are the thing that makes the thing possible.’

You can’t just copy files to create more bitcoins (or any other crypto currency). There are a fixed number and that is it.

Whilst that’s true of Bitcoin, it isn’t true of cryptocurrencies as a whole. Think back to the title question – “How do you decide which crypto currency to buy?” Well why not make your own, after all if you can hype it enough you can sell it…

Whilst that’s true of Bitcoin, it isn’t true of cryptocurrencies as a whole. Think back to the title question – “How do you decide which crypto currency to buy?” Well why not make your own, after all if you can hype it enough you can sell it…

The BBC podcast “The Missing Crypto Queen” is all about that. Worth a listen. Quite well produced and interesting

https://www.bbc.co.uk/programmes/p07nkd84

Whilst that’s true of Bitcoin, it isn’t true of cryptocurrencies as a whole. Think back to the title question – “How do you decide which crypto currency to buy?” Well why not make your own, after all if you can hype it enough you can sell it…

That’s like saying, ‘Whilst that’s true of Gold, it isn’t true of metals as a whole.’

You can make your own crypto-currency in about 30 minutes. However, your newly minted coin would have as much relationship to Bitcoin as the price of mild steel does to gold.

Sounds like people are getting confused between something which as a currency vs an asset.

Currencies are a way of converting wealth, from one form into another. You can’t do that with Bitcoin. You have to transfer it into another currency first.
If you were to by a Tesla is it 1 Bitcoin or $47,000?
What if a Bitcoin is worth $50,000 tomorrow.
Is it still 1 Bitcoin or 0.94 Bitcoins?

All currencies are depreciating assets. Inflation erodes their value.
Why would you invest in a currency when it’s only going to go down in value?

Assets have a real life value attached to them.
Apple shares will pay you a dividend
Gold you can use in electronics
Land you can build on
What else can you use a Bitcoin for?

Early days ( and a bit risky ) but you can lend your bitcoin and earn intrest on it. You could also takeout a loan and use it as collateral.

To quote myself:

I’ve done not much more research than look at what US arm of Paypal have adopted and invested in those.

So I stuck an extra £50 in long shots in the end to my £450 *cough* safe bets, and my £500 has gone to £620 with the few weeks I’ve invested, so I cashed out my profit and my £500 remaining balance is already rising within a few hours.

Obviously I’m lucky, and not sure what’s going on or what I’m doing, but if this continues I’ll do the same again and will just be left with an essentially ‘free’/low risk bet on the crypto currency bandwagon to just leave alone. Or it could all crash and burn, but I’m only in for £380 right now (and have £520 in fantasy money).

It’s all a bit crazy but great fun!

Well I’ve jumped on the bandwagon after doing some research and I’m in for the long game. Only putting in what I’m prepared to lose.
Gone for Cardano and Ethereum, I’m strapped in and ready!

Last time I was too late to the game for Bitcoin, also got swayed into Tron and Ripple and only just broke even so see how this goes!

Hearing noise about Binance being huge, so will do more research and see if it has the legs people are suggesting

If you were to by a Tesla is it 1 Bitcoin or $47,000?
What if a Bitcoin is worth $50,000 tomorrow.
Is it still 1 Bitcoin or 0.94 Bitcoins?

This is true of all currencies though, although the variations are smaller.
If I agree to sell something for £1,000/$1,300 then next week when I deliver it it might be £1,000/$1,400, exchange rates change all the time, it’s just the movements on Bitcoin are more extreme. Generally the price would be agreed as either £1,000 or $1,300 and the party using the foreign-to-them currency would be taking the risk on the exchange rates.

Bitcoin has taken a bit of a dive today! 🙂

As my mate just put it, “the arse has dropped out of everything” today. I was technically up about £250 around a week ago through a combination of different cryptos, that’s pretty much all gone today! It’s pretty entertaining watching it go up and down.

I’m still up £35! 🙂

Got £173 chucked in and currently worth £208. My tiny bit of Bitcoin cost be £45 and is currently worth £50.

Sold all my Ripple yesterday and will buy back when it drops below 37p.

It’s pretty entertaining watching it go up and down.

It is! Have to keep reminding myself it’s not a game on my phone. 🤣

In an uncharacteristically wise move I cashed out all my BTC, BCH, ETH and LTC yesterday morning when I woke up and saw lots of red downwards arrows across the board.

So far I’m not regretting that decision 😳

So far I’m not regretting that decision 😳

..the plug has well and truly been pulled on the cryptocurrency bath in the last 24hrs!! 🙂

I’m still £1 up and even took a gamble on buying a bit more XRP while it’s tanking.

I’m still up 30% on my bet from three weeks ago. I’m going to hold as I’ve got headroom and I’m gambling that it’ll recover. I’ve got 5 different coins, so slightly diversified. Fingers crossed.