There IS NO NEED FOR CRYPTO. TAKE YOUR MONEY OUT BEFORE TOO LATE
Ask yourself the following questions, you crypto-ridden losers, clearly you all lack in this department, who come here looking for advice on what to buy / get:
1. How do you ascribe value to these crypto currencies (please help me understand the valuation employed and the assumptions that go into it)? What is the difference between Bitcoin, Ethereum and Dogecoin? Why is one valued higher than the other? What are the pros and cons of each?
2. How do you ensure that these currencies or the exchanges they're traded on are not immune to either security hacks or other kinds (I am sure you're familiar with cases of multi-billion / million dollar exchange founders disappearing or staging deaths to cause tremendous monetary and non-monetary damages), how does one ensure that someone may not disappear tomorrow with these crypto assets?
3. How do you protect yourself from the volatility inherent in these assets' prices? In case the price of crypto assets goes down significantly and suddenly, how does one protect his downside?
4. How further long before major central banks around the world endorse Crypto as a part of their overall monetary policy framework?
5. How does one ensure transparent and correct financial reporting of these crypto assets (in terms of accounting)? How should one be reporting the value of these crypto assets on one's tax returns
6. How do you convince someone , who's not a sophisticated and / or an accredited investor, that investing in crypto assets is a better use of capital as opposed to investing in even more hard, tangible assets (real estate) or non riskier (as well as non-volatile, and more transparent investment options: government bonds, ETS, index)
7. How do you differentiate between what is "fake" crypto currency and what is "real" crypto currency unlike the litmus test that exists for commodities (gold etc.)?
8. What reserve currency will these crypto assets be pegged to and why?
9. This "mining" of crypto currency seems like a huge waste of resources from a sustainability perspective. Why is it necessary to go through this when there are alternatives that are not as much environment-draining?
10. What are the 4/5 advantages of using crypto as a medium of payment vs. the more traditional, established means accepted by all (debit, credit cards, cash)?
If you cannot even answer one of these questions sensibly, answer is there is no need for this asset class. Take your money, and take your family, and run off into the wild before too late
The looser is you, looking at your questions here, which point mostly to your ignorance. What’s the difference between Bitcoin/Ether/Dodge? Maybe you try to do some research first, particularly into utility and use cases of these tokens, as well as their underlying blockchain platforms, before you post questions like this. Bitcoin is more akin to digital gold, whereas Ether is more of a commodity, which fuels Ethereum Vurtual Machine, and Dodge is just a shitcoin, tulips, if you will. These three are very different and you shouldn’t generalize things about them, they are very different tokens in nature and have very different use cases, even though all three use blockchain technology.
mate you could have just googled any of these questions and not made yourself look like an ignorant douche
Ok. I'll bite. I'm a moderate crypto enthusiast... I'd like to think I'm in the middle. There are some crypto-bros and boomer old school finance people that are (too) hard core in their opinions on both sides. Let me try to be a bit dispassionate:
MY Cypto CV: I've gotten into crypto lately as a hobby (more from a computer science/engineering side). I personally have a farm of rigs at just shy of 1 GH/s mining ETH (for now, until PoS... then we'll see). Using over 10 GPUs that are a mix of NVIDIA and AMD. Primary algoirthm: daggerhashimoto.
1. Crypto like BTC and ETH (the two largest) actually have "industrial applications". To use a mining analogy, think of them as PGMs like platinum and palladium. They are valueable, both as a store of value as well as a "material" that is needed for Web3 like defi etc. (you'll have to read up on/Google this yourself. This would take forever to explain here)
2. This is my biggest legit concern. The very thing that makes crypto attractive as a relatively untracked, noninstutional "free(dom)" currency is the same thing that gives it geniune concern in my view. The idea that so many people are investing in technology that could disappear at any minute. I know this isn't perfect, but imagine crypto as cash. You put it into the bank because you have supreme trust you will get it back.
3. Nothing. Same way I protect myself when buying stocks and bonds. Homework. And crypto, as you can rightly imagine, is the worst for this. The "market" is all over the place with many actors who don't know what the F they are doing. There are a lot of "I don't actually know what I'm doing/I think I can get rich quick" voices here.
4. Respectfully, I think you are asking the wrong question here. Here I'd use the analogy of crypto as the currency of some random country you've never heard of. Sure, it's valuable, highly volatile and could appreciate or depreciate at the blink of an eye. Just because it's a currency doesn't mean major central banks need to/care to "endorse" it as a part of their monetary policy frame work. What you should be asking is if there will be a greater market demand for use of it (beyond as a store of value and its inherent "industrial applications") - what I mean: Can buy something with crypto? And I don't mean like a Gemini Visa card where they take your crypto, sell/convert to cash, and then pay. I mean transactions entirely in Web3 completely avoiding traditional finance infrastructure.
5. This one is surprisingly easy. Anywhere you trade crypto, they track it the same way you trade stocks, except you get a Form 1099-MISC instead of a Form 1099-INT. What did you buy at, what did you sell at, how do you get taxed? Ask your accountant.
6. I don't. I don't move the market, I participate in it. Different investment profiles/thesis for different investment objectives. It's something else to invest in that you should at least look at. Like any other investible security/asset.
7. See #1.
8. Not relevant. See #4.
9. I would debate that this is untrue. For example: at current difficulty, it takes about 20,000 kWh to produce one ETH (deliberately stated as kWh and not TH). Note this is based on TDP only: excludes CPU, 80Plus rating loss, other infrastructure costs and "Rule of 80 usable kWh at-the-wall" (power lost through transmission). These My personal stats. "If my math is right (and it always is)" ~Tony Stark. YMMV greatly depending on hardware, cooling environment etc.
The process of creating the ETH through PoW validates transactions on the blockchain. But that's it. No paper/cotton for bills, refining of ore to make coins. I would argue the resources required to make traditional currency are also pretty resource heavy (the old story of a penny costing ~2 cents to make). But in all fairness I haven't done the full apples-to-apples analysis, but my gut instinct is that this is less resource intensive. I could be wrong.
10. When I was younger, I like to collect coins for different countries. I just thought it was neat how different people used different forms of money. My nostalgia aside, it's something else to invest in, learn about, and try to understand. Part of my interest is that I feel like this is one of those "new" things young people get that old people don't fully, and I find it to be a nice academic endeavour. It's one of those things where I feel like it's a "science project" that can have real life busineess applications - things that are not yet real, but could be (and highly profitable) very quickly from an applications perspective.
Epilogue:
Would love some comments. I got into this as an academic exercise/hobby that is mildly profitable. At current rates, I mine at profit margins of ~20%. At the height of their peak prices, my profit margin was as high as 50% with a payback period (for the equipment) of ~2 years.