Crypto Currency Trading

rawsco · Post by **rawsco** » Mon Feb 14, 2022 11:27 pm

So who’s having a wee dabble? I’ve been ‘farting’ about since November and been quite enjoying it as a hobby. I’ve ‘invested’ enough to hurt a little if I screw up so as I pay attention but not enough to damage me. Made a few cheeky trades and netted a decent profit margin well in excess of any savings interest, but also made a few howlers, although making less of those now I’m learning a bit more.

Building up some wee piles of some of the main coins for long term too.

Staying well away from NFTs tho that’s just nuts.

Post by **campbell** » Fri Feb 18, 2022 12:58 am

No chance.

Enjoy.

rawsco · Post by **rawsco** » Fri Feb 18, 2022 10:25 pm

Why not, purely out of curiosity? I’m not lumping 100% of my savings in that would be stupid but as part of a diversified portfolio it has its place at the high risk high reward end of the spectrum.

It’s a technology that isn’t going to go away, for example vehicle service records held on the block chain, or title deeds for property, proof of ownership of various stuff (not just Gifs and vehicles for drug deals).

philthy · Post by **philthy** » Fri Feb 18, 2022 10:38 pm

I’ve staked ETH and dabble in a bit of cardano. Purely a punt, find it all fascinating and it’s here to stay for sure.

scott_e · Post by **scott_e** » Wed Feb 23, 2022 8:54 am

As a technology I have dabbled with cypto since 2017, had a miner setup for a bit, tried hardware and software wallets, have tried bitcoin mixers, investigate ledger traceability, made a few purchases using bitcoin. All about learning the tech for me as its a really very interesting technology. Never felt comfortable with the amount of personal identity information some of the more exotic exchanges require so stick to the mainstream. I don't see it as an investment , sure you can day trade or look at it long term but way to volatile for me and feel legislation is coming. Some of our staff are really up to speed on the tech hence the early interest. NFTs (ETH) certainly has found a usefulness but the power consumption issues need addressed. But when our receptionist tells you Bitcoin is her pension plan it feels like another bubble, reminded me of the old adage about the lad shinning shoes on wall street giving stock trader stock advice before the 1929 pop. Bengal Bubble, Dutch Tulips etc but agree the tech is here to stay.

Post by **campbell** » Thu Feb 24, 2022 1:51 am

rawsco wrote:Why not, purely out of curiosity? I’m not lumping 100% of my savings in that would be stupid but as part of a diversified portfolio it has its place at the high risk high reward end of the spectrum.

It’s a technology that isn’t going to go away, for example vehicle service records held on the block chain, or title deeds for property, proof of ownership of various stuff (not just Gifs and vehicles for drug deals).

Only risk what you can afford to lose. And in a domain you understand.

I can’t afford to lose much and I don’t understand Crypto Currency and Blockchain concepts.

Delighted if others can score big. Just not for me. In the same way as I don’t deal shares either. I leave my IFA to organise that.

renmure · Post by **renmure** » Thu Feb 24, 2022 8:44 pm

Ach, I gave it a go for a week. Up £100k one day, down £100k the next day.... didn't seem worthwhile really. Premium Bonds are far less volatile

Blockchain. Hmmmm... I used to go there to rent Betamax Videos.

a4drk · Post by **a4drk** » Wed Mar 02, 2022 2:25 pm

Ross
Have you actually tried to withdraw your winnings ?
Its a nightmare apparently

David

rawsco · Post by **rawsco** » Wed Mar 02, 2022 9:55 pm

a4drk wrote: ↑
Wed Mar 02, 2022 2:25 pm
Ross
Have you actually tried to withdraw your winnings ?
Its a nightmare apparently

David

Doddle, bank transfer there in minutes.

janglos199 · Post by **janglos199** » Wed Mar 16, 2022 10:46 am

rawsco wrote: ↑
Mon Feb 14, 2022 11:27 pm
So who’s having a wee dabble? I’ve been ‘farting’ about since November and been quite enjoying it as a hobby. I’ve ‘invested’ enough to hurt a little if I screw up so as I pay attention but not enough to damage me. Made a few cheeky trades and netted a decent profit margin well in excess of any savings interest, but also made a few howlers, although making less of those now I’m learning a bit more.

Building up some wee piles of some of the main coins for long term too.

Staying well away from NFTs tho that’s just nuts.

I could never understand what cryptocurrencies are all about, but that's not the point. From your explanation, trading it looks like gambling to me.

robin · Post by **robin** » Wed Mar 16, 2022 7:40 pm

For sure there is a large gambling element here.

Central bank backed currencies have more or less predictable futures - sometimes you cannot see why the dollar appreciated against the pound or vice versa, but for sure there is an underlying sane reason to do with international trade, investors looking for safe havens, central bank and government policy announcements plus speculation on all of the above (we think the policy will change, buy/sell in advance of the general public cottoning on).

Crypto currencies have no central bank, no real monetary policy and no fiscal policy. (Monetary policy relates to interest rate setting and the availability of cash - aka printing money/quantitive easing; fiscal relates to tax and spend and so is government rather than central bank). There is a sort of monetary policy in that the rate at which they can be mined is sort of level and so (ignoring scams/broken algorithm crypto currencies) new money becomes available at a certain rate (and a certain cost of product = electricity). This is comparable to the old days where currencies were based on the gold standard (abandoned by all nations as a waste of time and counterproductive).

Sooner or later one or two of them will become generally usable (bitcoin being the most likely IMHO). That cannot happen until the roller coaster valuations settle down and normal people can trust the currency value. Businesses need to ensure that the proceeds of a sale cover the costs and margins and generally this isn't possible with an unstable currency. This is true for central bank currencies too: hyperinflationary periods always result in the breakdown of currency and a return to barter - the ruble may see this happen soon.

In the run up to that point investing in these currencies is not really an investment unless you are looking at the path to maturity and finding a way to value the currency at the point at which it becomes mature - similar to the way an investor might value a startup based on its future revenues and profits. Until then it's a game of musical chairs - your currency may go to zero when the music stops. If your currency survives then it will be worth something, but is that $1 or $1bn or 2 loaves of bread? I honestly don't know how you can tell.

The lack of monetary policies though will make these currencies hard to use in reality. Let's say there was a general appreciation that bitcoin was stable enough to be an alternate wealth carrier at some arbitrary exchange rate. Let's say one bitcoin is valued at $100,000 (2.5x what it is today). Now today there are only 20 million bitcoins in existence. So the expressed wealth would be 2 trillion dollars. Seems like a lot, right? But it's only about 4% of the cash dollars in circulation and only 0.2% of the US dollar wealth (which stands at around 1 quadrillion). It's also not even the total value of US retail transactions per day (which stands at more than twice that).

So who will use bitcoins and what will they use them for? It cannot be everybody/everything, because nobody will be able to transact all their business in bitcoin (not enough of them). It could be some things - e.g. you can always buy your Tesla with bitcoin. But if you don't have them, you'll need to buy them to buy the Tesla. Probably that doesn't make much sense - why not just buy it in dollars that you already have?

For a central bank it's easy - they can provide funny money to make sure there is enough money in circulation to allow the nations finances to flow - they call it liquidity. Absent a central bank, how do we boost the number of bitcoins? We cannot.

And so this is where I get lost. To me, currency is simply a matter of faith. We generally believe that a pound in our pocket will remain worth roughly a pound for the short term and that if we have more than we need, we can save them in a way that protects their value (mostly) and when we don't have enough, someone can lend us enough to allow us to buy what we need. Crypto currencies have none of those attributes. Some people compare them to the gold standard (which is the same problem - there's only so much gold); it turns out the gold standard didn't work either.

But I am no economist, so I could just be missing the obvious.

Cheers,
Robin

Post by **campbell** » Wed Mar 16, 2022 9:48 pm

A fine essay, though - enjoyed that

Ferg · Post by **Ferg** » Thu Mar 17, 2022 5:46 pm

hendeg · Post by **hendeg** » Thu Mar 17, 2022 7:46 pm

I’ve not paid much attention to crypto but I’ve always viewed the initial intent as an anti-establishment/anti-system mechanism for people who were disillusioned with people making money out of money. Guess what? The main reason people are getting into crypto is to make money!

I’m certainly no economist either and I’m not sure if the concept of a single global currency is either feasible or desirable.

PS: good to see you back Robin. Not that you really went away.

Alistair · Post by **Alistair** » Tue Mar 22, 2022 2:41 pm

I think Robin has put into words what I've always thought but could never articulate - since I first heard about Bitcoin a number of years ago. Thank you!

How can something be worth something and used to buy stuff i.e. a currency, if you're not sure it's going to be worth the same or a little bit more in the short, medium AND long term? It's got me stumped!

If it is to be so - perhaps Percy was somewhat ahead of his time? - https://www.youtube.com/watch?v=TkZFuKHXa7w

Scottish Elises