Cryptocurrencies - Your Key to Financial Freedom AMA

techlead on 30/03/2021 - 10:45
Last edited 24/05/2021 - 11:22 by 1 other user

I've been tracking the crypto space since Bitcoin was invented and bought my first Bitcoin in 2013 and has been using every cent of my savings to buy cryptocurrencies ever since.

I can now comfortably retire. Which other investment allows you to do that in less than 10 years.

Ask me anything about the cryptocurrency space, there's no such thing as a "silly" question. I think this goes without being said, but I'm going to say it anyway. None of what I say here is financial advice, I do not hold an AFS license, you should seek advice from a licensed professional before making any investment decisions. If you are making investment decisions from some random guy on the internet without doing your own research and due diligence, you should stop immediately!

There's all these controversy about property prices "surging" or becoming unaffordable, not for me, if you invest in the right asset, property is actually getting cheaper and cheaper. Property prices in Bitcoin terms has been decreasing and will continue to as Bitcoin increases in price at a faster pace. So to me, property is progressively getting cheaper and cheaper.

Update:

For those who would like to find out more about cryptocurrencies and why I think Bitcoin is here to stay and will be more valuable in the future, head over to hope.com and watch some of the videos. This site was set up by the CEO of MicroStrategy, Michael Saylor who's company bought an aggregate of approximately 90,531 bitcoins, which were acquired at an aggregate purchase price of approximately $USD2.171 billion and an average purchase price of approximately $USD23,985 per bitcoin, inclusive of fees and expenses as of 24th Feb 2021.

To those who think that I "got lucky" and was "fortunate", that's very far from the truth. I saw this coming, I knew that with rampant money printing by central banks, fiat currency is going to zero and it has been doing so for centuries. All fiat currencies have gone to the zero, in history, there has not been any fiat currency that didn't go to zero. So Bitcoin's rise is inevitable to me, hence I bought it. I didn't go as far as that family who sold everything to buy Bitcoin, but I did use nearly all of my savings to buy cryptos.

Common criticisms of Bitcoin

  • Its just like Tulip mania
    Bitcoin is nothing like Tulips, Bitcoin is a decentalised and censorship resistant network which enables values to be transferred across the internet at very low cost. The value of Bitcoin is the strength of its network and the fact that it has never been breach or hacked, which means unless someone steals your private key, your coins are safe.
    Tulips has none of these qualities. The only thing which Bitcoin and Tulips have in common is the fact they both went up in value very quickly. Even then there are differences, Tulips went up and crashed all within 3 years. Bitcoin has gone through at least 3 cycles where it has smashed its previous all time highs and never dipped below the starting point of the cycle.
    Bitcoin has recorded a higher year on year low every single year since its existence except for 2015.

  • The Bitcoin network uses too much energy
    This is just market supply and demand. People mine Bitcoin because it is profitable to do so. The Bitcoin network do not require so many miners, in fact it started with just one miner. The network can continue with just one miner, it adjusts as more miners enter and leave, this is built into the network. The high energy used by Bitcoin is a sign that it is valuable and people are willing to make the effort in participating in the effort in securing the network and be rewarded for it.
    Due to the profit motive, the energy sources used by Bitcoin miner are increasingly from green energy sources reducing its impact on the environment.

  • It is used for criminal activity
    Fiat currencies are used on a much much larger scale by criminals. Banks launder money for criminal, there's been so many scandals, and those are just the ones which make it to the media, I'm sure a lot goes undetected.
    Bitcoin is actually very bad for criminal activity, this is why they quickly moved onto privacy coins like Monero and Zcash. The Bitcoin blockchain is public and all transactions remain there forever. If a drug deal is done with cash, unless there's a recording device there at the time of the transaction, that drug transaction is untraceable. If you do a drug transaction with Bitcoin, that transaction will always be on the blockchain, all it takes is for law enforcement to tie one address to a real person, and the entire web unravels, so its not very smart using Bitcoin for criminal activity.

My Crypto mistakes and other pitfalls

I want to go over some of the ways I lost money in crypto over the years so maybe you can learn from my mistake

  • Scam websites
    In 2014, there was a website called Bitcoin savings bank, which promises 9%pa interest if I transferred my Bitcoin there. Very similar to what Crypto.com, Blockfi etc offer today, except they are scammers. Unfortunately, I didn't do my research and I believed them. I transferred 2BTC to their "savings account". Never saw it again.
    Nowadays, these sites are very obvious, they promise hourly returns, like 10% every 2 hours. This is impossible to consistently do, they are all scams, don't fall for them.

  • Double your coins scam
    This is quite famous, there are many variants, but essential it just entails you sending your coins and double or some very good return percentage will return. Its a scam, you will get nothing. Fortunately, I have never fallen for these.

  • Pump and dump groups
    These are almost always scams, there are more losers than winners. Yes you may win one time, take it and walk away, but most likely you will lose. I lost more than 1BTC in this. I'm still part of the groups to monitor, but I never participate anymore. Neither should you. They also have these VIP or "inner circle" groups, where they promise you early notification of the coin to pump for a fee. Don't fall for this. They might also have an inner inner circle group or VIP+, where they promise to take your Bitcoin and buy the coins for you, to maximize your returns. These are definitely scams, they will take your Bitcoin and then block you on telegram.

  • Fake wallet apps
    These apps emulate popular wallet apps and asks you for your seed phrases and private keys so they can steal your crypto. Treat your seed phrases and private keys as private. NO ONE should know, not even staff members of the hardware wallet company. Its like your online banking password, no bank employee should ask for that. If any app do, delete it IMMEDIATELY.

  • Leveraged trading
    I lost around 1 BTC (worth around $5-6k USD at the time). I tried to pick the bottom during the 2018 bear market, the Bitcoin price was quite stable and stagnant around the $5500-$6000k mark, so around Nov 2018, I thought that was the bottom and went in with a leverage long. The market went off a cliff dropping down to $3500. I got liquidated, lost the 1 BTC I deposited. I never touched leverage trading again. Its very hard to pick tops and bottoms, so now I just dollar cost average and periodically buy and hold. You don't need to worry about being liquidated if you do this, it will help you sleep better at night haha.

Mod Note: The user is not associated with TechLead YouTube channel.

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Financial Cryptocurrency

Comments

    • techlead on 03/04/2021 - 19:03

      Selling into a stable coin is better because its easier to transfer an ERC20, TRX or whatever network the stable coin is on than fiat. You can't transfer fiat from one exchange to another, only back to your bank account if the exchange supports fiat. On the other hand, most if not all exchanges support at least one USD stablecoin, so that makes it very easy to transfer funds between exchanges.

      Don't forget, selling into a stable coin is a CGT event. So CGT is payable.

  • ego22 on 03/04/2021 - 19:00

    Another question.. if you keep your chosen crypto for over a year its 30% taxed when you sell. But if you keep it for under a year its 50% taxed.. but what if your dollar cost averaging in and constantly buying more of that one coin before you eventually sell it all. over a years time to when you first started buying it. How would tax work on that?

    • techlead on 03/04/2021 - 19:14

      According to an ATO determination, https://www.ato.gov.au/law/view/document?locid=%27CGD/TD33/N…, you can use the First in First out (FIFO) method to calculate CGT.

      This means you will need records of all your previous buys of Bitcoin. Then you can work out which ones are eligible for the 50% tax offset.

      My understanding of the rate is that, the tax rate is your marginal rate of tax, depending on which bracket you fall with the profits added in. Then the long held portion (held for over 12 months) get a 50% discount.

  • hasher22 on 03/04/2021 - 19:26

    For someone who is in the researching phase and I already got my account approved in independent reserve, how much would you invest in for either Bitcoin or Ethereum? I know everyone is different though is there a minimum?

    I know people say with stocks, a good starting price is 1000 because of broker fees etc….. some say 2k or 3k.

    • techlead on 03/04/2021 - 19:32
      +1

      How much you invest should be between yourself and your licensed professional financial adviser.

      With that said, there are a few things you should consider the following fees,
      * there are fees involved when transacting and moving crypto, depending on which crypto. Transferring coins on the blockchain costs transaction fees. Ethereum has the highest transaction fees at the moment because it is quite congested. Bitcoin's fee is ok. This website charts the average transaction fee in real time, https://ycharts.com/indicators/bitcoin_average_transaction_fee#:~:text=Average%20Bitcoin%20transaction%20fees%20can,from%200.6451%20one%20year%20ago., which is around $17 USD at the time of writing.

      • Buying crypto is usually a percentage, around 0.1-0.5%. Think of this as "brokerage" for shares.

      • Withdrawing crypto from the exchange also has a fee which is usually flat. For example, Bitcoin attracts a 0.0003-0.0005BTC fee, this is around $20-30 USD.

      So with these fees in mind, you can see how its not worth buying say $10 worth of Bitcoin because most of it will be eaten up by fees.

  • ShortyX on 03/04/2021 - 20:05

    I have about $230k in super. Any thoughts on investing that in crypto (is that even possible) or should I use a SMSF?

    • techlead on 03/04/2021 - 22:17

      You should seek professional advice.

      I personally use a SMSF to purchase Bitcoin and Ethereum and then they are held in an account which earns 6% interest paid in Bitcoin and Ethereum.

  • Farrba on 03/04/2021 - 20:55

    is it worth buyiny more holo? i bought some at 1 cent, now its 3 cents.

    • techlead on 03/04/2021 - 22:18

      I've heard good things about holo (Hot). I don't personally hold any.

      Just keep in mind most of these alts go to zero during the bear market, they will go down 90%. Even Ethereum, it was below $100 USD during the bear market. I was loading up because I believe in the project, but think about those people who bought at say $700 to its last ATH of $1400. That's a huge loss for them during the bear market.

      • Farrba on 03/04/2021 - 22:31

        thanks, but it seems to be a good way to double your money easily. i mean coins will always start at a low price, going up happens more often than crashing.

        • techlead on 03/04/2021 - 22:33
          +1

          This is the bull market, any coin is going to pump. I see so many coins which I wouldn't touch pumping. I have stopped myself from FOMOing into them. I trust my research and I'm grateful for the profits I have been able to capture thus far. You can't catch every fish, so don't try.

  • ilovefullprice on 03/04/2021 - 22:15
    +6

    Just wanted to add to what OP has already mentioned and share with the OzB community here what I have learned about crypto myself.

    When you buy into crypto, it’s no longer buying into a fake asset or an asset which has of no use. What I found out is when you invest in crypto, you are actually investing in the future of blockchain technology. There are many new crypto coins which are created and are supporting the development of this technology.

    How can blockchain benefit you? Blockchain is essentially decentralisation. This means there are no central party or middle man. With decentralisation, there won’t be things like banks, share market exchanges or even Google. When there are no such central parties, 100% of the money flows directly from the “buyer” to the “seller”, rather than the central parties taking out a cut of the money through fees. When central parties takes out a cut of the money, this creates accumulation of wealth by these parties or a small group of people, creating millionaires like CEOs.

    Now you tell me if the world would be a better place when there is a fairer distribution of wealth? Dare I say, crypto is one step closer to achieving universal income in the far future! That’s the attraction of crypto!

    • techlead on 03/04/2021 - 22:25
      +2

      I agree with most of what you said, especially the part where it cuts out the middlemen (and women) as well as the central banks, who're running the printing presses 24/7.

      I disagree with universal basic income (UBI). Whilst it may sound like a good idea, I think its a recipe for hyperinflation. I've read up on the points supporting universal basic income. The general premise is that, by eliminating these requirements for support, eg for the dole, you cut down on the bureaucracy and red tape. So instead of the need to assess people on the dole, you just give the dole to everyone, so no need for Centrelink and that would save a lot of money. I don't think the maths add up, I think UBI will cost way more than running Centrelink, hence it will be inflationary setting aside social issues like disincentivising working.

      I don't think UBI is a good idea in practice, it may sound good on paper.

      • ilovefullprice on 03/04/2021 - 22:49
        +1

        You raised a few points about UBI:

        1. UBI costs more than Centrelink - when I am talking about UBI, it’s in the context of crypto, nothing to do with the government having to spend tax money. Money would come from staking, farming, delegating crypto etc.

        2. Hyperinflation - this is a good point to make. UBI in its current form still has a lot of flaws, but as time goes by, someone smart might come along and come up with an idea to address this. I did say in the far future!

        3. Social issues like disincentivising working - like I said, in the far future! Think Star Trek etc. where humans as a whole are more educated and cultural values change where people are no longer working for money but working for something worth more than money like in what they are passionate in in advancing humanity.

        • techlead on 03/04/2021 - 22:56
          +1

          1. I wouldn't consider staking, farming, delegating crypto as UBI. People still need to buy the tokens in order to participate, or are you saying the cryptos are given to each person initially? Staking, farming, delegating all service a purpose, you need to give something and be rewarded for it. For example, by staking, you are securing a Proof of stake chain, so for your efforts, you are rewarded. You still need to buy the initial coins to stake.

          2. Yea, maybe someone way smarter than us will have a solution.

          3. That's one of the goals of UBI, so people follow their passion instead of having that pressure to make ends meet and work in jobs which are not suited for them. I don't think we'd see a solution to this in our lifetime.

          • ilovefullprice on 03/04/2021 - 23:07
            +1

            @techlead:

            1. Yes what you say is true. But once again, think far into the future! In a few generations (or more), people might choose not to sell their crypto and pass it on to their kids as inheritance. So these kids don’t have to buy any coins out of their own pocket.
            • techlead on 03/04/2021 - 23:22
              +1

              @ilovefullprice: What you are describing happens today lol. Its called trust fund babies. There's research into this, these kids will usually just waste it and end up living a hard life. If they didn't work to get this money, they will never learn to earn money. Kids will not value things which has been given to them especially money.

              I'm against the idea of passing everything onto my children so they don't have to work again, I prefer to give it to charity and pass on knowledge to my kids. Knowledge is more valuable. Give someone fish, they eat for a day, teach them to fish, they eat for a lifetime (as long as they don't mind eating fish all their life hahaha, but the point still stands).

              • ilovefullprice on 03/04/2021 - 23:31
                +1

                @techlead: I think you are getting a little off point.

                I am saying crypto opens up the opportunity for more people to be one step closer to UBI in far far far future, when people are more educated and cultural values change.

                Trust babies as far as I know right now is only limited to the wealthy. Crypto offers an opportunity to level this playing field.

    • TEER3X on 03/04/2021 - 22:45

      Now you tell me if the world would be a better place when there is a fairer distribution of wealth? Dare I say, crypto is one step closer to achieving universal income in the far future! That’s the attraction of crypto!

      How exactly does any crypto do this?

      I don't think any poor people own crypto.

      • ilovefullprice on 03/04/2021 - 23:00

        In the crypto world, even poorer people from 3rd world countries have reported that crypto have changed their lives.

        How? When a new coin (especially ones which has a good use case) gets released, buy into it when it’s early, therefore when the price is still low. And then stake/farm your coin holding to earn a regular interest income stream, while your principle holding coin’s price moves up, over the long term.

    • Bobbybob on 03/04/2021 - 23:57

      Isnt there only 1000 people that own 40% of all bitcoin? Seems significantly worse compared to what we have now.

      • ilovefullprice on 04/04/2021 - 00:28

        Bitcoin is not the only crypto out there!

      • techlead on 04/04/2021 - 07:29
        +1

        Are you referring to a report in Bloomberg which claimed that, "2% of accounts control 95% of all Bitcoin"?

        This kind of journalism shows that the author of the article is either trying to be misleading or lack an understanding of how Bitcoin works.

        There are two main points:

        • Not all addresses should be treated equally. Some addresses are exchange cold storage wallets, these will most likely hold vast amounts of Bitcoin which technically are not owned by the exchange, they are merely holding it on behalf of their users. Take Binance for example, it has millions of customers holding vast amounts of Bitcoin.

        • A Bitcoin address should not be called "an account". There isn't a one to one relationship between the number of users and the addresses. One address can hold funds for multiple users, eg exchanges, and one user can have multiple addresses, in fact it is good practice to have multiple addresses for security and privacy. Keep in mind that when you transact, the other part can see the entire balance of the address.

        I'm not sure where you got the statistic 1000 people own 40% of all Bitcoin, but I highly doubt that's the case.

        • Bobbybob on 04/04/2021 - 09:46
          +2

          While the numbers is probably off, I'm sure the inequality of bitcoin is much worse than what we have now. Elon's 1.5b of the total market cap of btc dwarfs Bezos's net worth as a porportion of the total money supply in the world. That is without taking into the consideration that Elon probably doesnt even own the most btc and a fair number of btc has been lost forever as well. There is also Satoshi 1m btc I imagine this would be similar with other cryptos as well.

          Why replace our current wealth inequaltiy with the rich elites, bankers and middle men with another wealth inequality with hodlers instead.

          • techlead on 04/04/2021 - 19:51
            +1

            @Bobbybob:

            Why replace our current wealth inequaltiy with the rich elites, bankers and middle men with another wealth inequality with hodlers instead.

            That's very simple, if we look at the two systems, Bitcoin is better. No money printing. That in itself would be reason enough to change. The little guy has a chance, not in the traditional financial system.

            Have you wondered why there's an increase in articles about people complaining they can't get into the property market? Like that couple who saved $135k in 8 years? There's very little they can do within the current system to get ahead.

            • Bobbybob on 05/04/2021 - 12:25
              +2

              @techlead: No doubt printing money is a problem that benefits and hurts different demographics but it is a political problem because money printing is a flexible process that can benefit anyone depending on where the money goes to.

              Bitcoin however due to the limited and decreasing supply due to lost coins, will also benefit and hurts different demographics. It will benefit hodlers and early adopters significantly at the expense of the little people who are unable to purchase any. Can't see how the "little guys" will benefit from this system either with all that inequality.

              Most people isn't buying and investing into crypto to make the financial monetary system more fair for everyone. They are mainly trying to get rich and replace the current heirachy with another heirachy with hodlers like winklevoss twins at the top.

  • TEER3X on 03/04/2021 - 23:04

    I'm not against the concept of cryptocurrency, but let's not kid ourselves, those investing heavily do not give a fark about the environment.
    btc currently has no real use, but it's environmental impact right now is real and massive.
    https://www.theguardian.com/technology/2021/feb/27/bitcoin-m…

    there is a chance btc will be hacked eventually via quantum computing and my guess is by the time that happens, the next big thing will be bigger than btc.

    I do see bitcoin going up even more, so it would make sense to add it to a well diversified portfolio.

    • techlead on 03/04/2021 - 23:09
      -2

      The headline is wrong, "Electricity needed to mine bitcoin is more than used by 'entire countries'". The electricity is not "needed" at all. As I mentioned before, the Bitcoin network can survive with just one computer mining, the network doesn't "need" all of these miners, they choose to mine because there is profit to be had, that's all.

      Interesting you bring up quantum computing. Yes, that's a threat, but quantum computing is not just a threat to Bitcoin, its a threat to all encryption. So banks will not be safe. Are you going to not put your money in banks because of this potential threat? Are you going to stop encrypting your files because one day quantum computing can crack it in a second? I'm sure when quantum computing is a reality, the Bitcoin network will adapt, as well banks and all others who use encryption.

      • Tiredman on 04/04/2021 - 16:29

        Same old fud over and over again. People should read this by Lyn Alden.

        Quantum computing and they use it to hack the insignificant bitcoin market when they have so many other others thing they can do? Quantum computing has the potential to start world wars if it falls into the wrong hands. Governments with quantum computing will not let others know until absolutely necessary. I doubt Quantum computing is even allowed to be commercialized in the near future.

        https://www.youtube.com/watch?v=xRPCmG6hx7g

        https://www.lynalden.com/misconceptions-about-bitcoin/

      • TEER3X on 04/04/2021 - 17:12

        Yes that's why I said the "next big thing", I don't think btc is the final solution. There was egold and ecash well before Bitcoin, it's just evolution and Bitcoin just isn't going to evolve well imo. If I was going to invest in a blue chip crypto, I'd put it in eth.

        If what you say is correct about energy use, it really doesn't matter, because it's just not happening and relevant, and the current carbon footprint massive. Yes, a big chunk of the power comes from hydro in the wet season in China, but that's only because electricity is close to free during that time. China does not care about the environment.

        • techlead on 04/04/2021 - 19:43

          I'm very bullish on ETH. I've started to weight my portfolio to ETH before it popped its all time high (ATH) recently.

    • ilovefullprice on 03/04/2021 - 23:17

      If you are still on OzB, I will check in with you on crypto after 3 years!

      • techlead on 04/04/2021 - 00:14

        I'm seriously considering retiring this year. Let's see how that goes.

        Definitely welcome a check in after 3 years!

        • Tiredman on 04/04/2021 - 19:15

          I can retire much earlier than expected but i'm just doing some of my businesses and sort of trying to see where i go from here. It's good to have the option.

  • Farrba on 03/04/2021 - 23:06

    it all depends on how much you can afford to lose. that guy who out 17k into theta, he was willing to let go of that money at that time.

    if someone now will ask me to put 10k into this particular coin, i probably wouldnt. thats because i am not willing to gamble my 10k. a lot of people might be able to afford losing that much.

    • techlead on 03/04/2021 - 23:17

      You should always treat crypto like this. When I first started, I was prepared to lose my entire investment. Still, it wasn't a good feeling when it nearly halved a few months after, I very nearly sold it when it went back up to break even. I'm very glad I didn't.

      Put it this way, the people playing lottery every week, I reckon they would've been better off buying that amount of Bitcoin every week.

      • Farrba on 04/04/2021 - 00:03

        any tip on where to find newly released coins?

        • techlead on 04/04/2021 - 00:19

          This is my method. Beware of projects that promise the world. Make sure you understand the project, what its about, its goals and how they will achieve it.

          Although I disagree with Warren Buffett about his views on Bitcoin, I do agree with him on only investing in something you understand. If you don't understand it, don't invest your money in it, you will have a bad time.

          Quite a number of my smaller alts have mooned, like Darwinia network (RING), its competing to be a parachain on Polkadot. Just need to do your research.

          I don't subscribe to ICOs, I feel the risk is too great, if its good, I will buy it when it pumps. For example, I didn't start buying Ethereum until it was $10, it ICO'd at $0.30. I thought it was a scam during the ICO lol.

  • zultan on 04/04/2021 - 08:04

    https://www.theage.com.au/money/investing/does-bitcoin-deser…

    "However, how can serious investors value an asset that has no cashflow, exists because of a collective belief by sufficient people that it has value, and that has become a favoured speculative target? Given the risk, there may be major volatility in the price of crypto-currencies for some time.

    Though the crypto space is better serviced by more reputable exchanges and service providers, there is still a wild-west element to the industry players and careful due diligence is required.

    While institutional support has increased, blockchain analytics firm Glassnode estimates that about 2 per cent of holders still control more than 70 per cent of all bitcoin. Such a tightly held market means that price manipulation is a risk, and investors need to be discerning towards liquidity, especially in a highly speculative environment."

    • techlead on 04/04/2021 - 08:42

      Not all assets have cashflow, not do assets need cashflow for it to be valuable. As an example, gold and other commodities do not, yet they still have value. You can say, gold has applications like in jewelry, electronics etc, but those practical uses for gold is far outweighed by gold just sitting in vaults doing nothing. So the inference from that statement, that assets need cashflow to be valuable is false.

      Due diligence should be exercised in any kind of investment activity.

      As for the Bitcoin concentration, here's the article from Glassnode, https://insights.glassnode.com/bitcoin-supply-distribution/ where they said:

      We can derive that around 2% of network entities control 71.5% of all Bitcoin.

      Interpret that how you will. It may or may not be a negative. Fun fact: The top 20% of Americans owned 86% of the country's wealth. Wealth inequality exists everywhere not just in the crypto space.

      • zultan on 04/04/2021 - 11:05
        +1

        I don't see anyone (other than folk that already hold Bitcoin) suggesting that Bitcoin holds value just for being Bitcoin.

        • techlead on 04/04/2021 - 19:34

          That's because when people finally come to that realization, they very quickly buy Bitcoin.

          • zultan on 05/04/2021 - 07:26

            @techlead: And this is the only way that the value of Bitcoin (and all the other coins) can grow in value. More folk being persuaded to put in more money, by people who invested earlier in the game - a decentralised ponzi scheme. That hope of getting rich quick drives the cycle which in turn means more coins ($XDC, $DENT etc). All promising to have exponential growth, but it only works if more money is pumped in.

            • techlead on 05/04/2021 - 08:17

              @zultan: I don't know about other altcoins, out of the over 9000 altcoins, I'm sure most of those projects are promising the world and not delivering, so you have to do your research.

              the only way that value of Bitcoin (and all the other coins) can grow in value. More folk being persuaded to put in more money, by people who invested earlier in the game - a decentralised ponzi scheme.

              At least for the major projects like Bitcoin, Ethereum, Cardano etc, this is definitely not true. Bitcoin and other cryptos grow by improving their network, making it more secure, more easy to use and introducing new features which will drive the use case of the network.

              For example, Ethereum blew up because people realized how useful it is to use smart contracts and to have a platform where these contracts can be deployed very easily to mint coins and perform other functions. Adoption took off as everyone started developing on it, that's what drives the value in. Ethereum raised $5.2 million in its initial coin offering (ICO), its founders defined success as a total market capitalization of $20 million. They never knew it would get this big.
              One of the founders of Ethereum then broke off to create Cardano, which is promised to be better than Ethereum in terms of efficiency and scalability. That remains to be seen as it is not fully functional yet, but the founder is notable because he doesn't talk about price. He says, he's an engineer, so he's going to focus on building the network to be the most secure and scalability as possible, let the traders worry about price.

              No legitimate project promises "exponential growth", if they do, that's probably a scam. No Bitcoin or Ethereum developer promises you exponential growth, that's for you to work out whether it will go up in the future or not.

              On a side note, I've been inspecting various properties. All the agents say property prices will go up "exponentially up" because its so hot, so better to buy now. I now get why everyone's FOMOing in, because most people would believe them without thinking for themselves. Property to me feels like the biggest Ponzi scheme. Its a house of cards built on cheap debt.

              • zultan on 05/04/2021 - 13:25

                @techlead:

                At least for the major projects like Bitcoin, Ethereum, Cardano etc, this is definitely not true. Bitcoin and other cryptos grow by improving their network, making it more secure, more easy to use and introducing new features which will drive the use case of the network.

                How does an improved network that doesn't do anything except be traded increase its value?

                For example, Ethereum blew up because people realized how useful it is to use smart contracts and to have a platform where these contracts can be deployed very easily to mint coins and perform other functions.

                There seem to be a whole lot of companies exploring uses of blockchain, but as yet no one seems to have found one.

                On a side note, I've been inspecting various properties. All the agents say property prices will go up "exponentially up" because its so hot, so better to buy now. I now get why everyone's FOMOing in, because most people would believe them without thinking for themselves. Property to me feels like the biggest Ponzi scheme. Its a house of cards built on cheap debt.

                Well… no one is building any more land. If the housing market crashes you'll be left with land and a house that is worth something. Once people start to realise that there is nothing but smoke and mirrors behind the Bitcoin curtain, you could be left with a bunch of valueless 1s and 0s.

                • techlead on 05/04/2021 - 13:38

                  @zultan:

                  How does an improved network that doesn't do anything except be traded increase its value?

                  An improved network, builds trust it also introduces new functions and features which will make the user experience better or increase security. All of this has value.
                  Take the Bitcoin network for example, it has improved alot since I first started in 2013, it has improved in scalability leading to cheaper transfer fees. Have a look at the historical average fees for Bitcoin, https://bitinfocharts.com/comparison/bitcoin-transactionfees…. See that huge spike in Jan 2018, that was the peak of the last cycle. Today, the network transfers many times more transactions than back then, yet the fees today are still lower.
                  These kind of improvements improve the user experience which then drives adoption and naturally the price.

                  There seem to be a whole lot of companies exploring uses of blockchain, but as yet no one seems to have found one.

                  Did you look very hard? Also, crypto is hard to use, so companies will improve user experience by shielding it from the consumer. You may already be using blockchain without knowing it.
                  For example, LivenPay uses blockchain via a token on the Ethereum network.
                  Have you heard of this company called, Visa? They will start setting transactions using a stablecoin on the Ethereum network.
                  What about a company called, Tesla? They have already started accepting Bitcoin as payment for their cars in the US and they will not sell it to fiat immediately afterwards.
                  Many more companies will follow.

                  Well… no one is building any more land. If the housing market crashes you'll be left with land and a house that is worth something. Once people start to realise that there is nothing but smoke and mirrors behind the Bitcoin curtain, you could be left with a bunch of valueless 1s and 0s.

                  Something doesn't have to be tangible to have value. You left out something very important in your housing crash example. What about the debt? If the housing market crashes, you are left with land and a house (which people are now will pay way less for) but the same debt remains, this is how people lose money in property.

  • rgr on 04/04/2021 - 09:18
    -1

    please stop divulging the secrets of crypto dude, you're helping people including the ATO scumbags

  • foxmulder on 04/04/2021 - 13:25

    TechLead :) not the same ex google ex facebook guy?

  • Bobbybob on 04/04/2021 - 14:02

    While governments cant ban bitcoin, cant they cripple it and other cryptocurrencies? The way i see it, they could:

    1. Ban local/foreign legitimate and registered businesses from accepting bitcoin/crypto for goods and services.
    2. Ban crypto exchange from exchanging your fiat into bitcoin
    3. Ban employers from paying their employee in cypto.

    People can still mine and send bitcoin/crypto to other users around the world but as long as you cant use it to buy goods and services or exchange for fiat, I cant imagine the crypto space thriving or suriving in this scenario if it ever did threaten the government's control of the monetary system. Currently crypto has also given government a brand new source of tax revenue so i doubt they would restrict it too much but I also don't know how crypto/bitcoin could ever transition into the global digital currency. Guess they can always remain as a form of store of wealth or niche currency in some space but never a global decentralised currency.

    • techlead on 05/04/2021 - 09:08

      Government banning something is always a risk.

      Look at the greyhound racing industry, they very nearly got banned in NSW.

      Look at gold, if you don't know about Executive order 6102, look it up, its an order by Roosevelt "forbidding the hoarding of gold coin, gold bullion, and gold certificates within the continental United States."

      I think cryptocurrencies are best placed to resist such government overreach.

      • Bobbybob on 05/04/2021 - 11:35

        We are talking about the government losing control over their monetary system which is on a completely different ball park to greyhounds.

        While they may not be able to ban it, they can still implement enough changes like tax policies to disincentivise or cripple it enough so that it could never replace fiat. They probably wont if bitcoin remains as a store of wealth like gold as that brings in tax revenue(they probably prefer it go higher if it means more tax for them, funny it still benefits them) but still can't imagine how bitcoin and other cyrpto alternatives to fiat can transition into a global currency if governments can easily put enough hurdles to stop it.

        How does bitcoin grow out of this phase if people can't make any meaningful transactions(buy/sell goods and recieve it as their main source of income) free from government's control and visibility?

    • trapper on 08/04/2021 - 14:40

      While governments cant ban bitcoin.

      Governments absolutely can ban bitcoin.

      I mean you could still ignore the law and risk whatever penalty the govt decided on, but banned is banned.

  • earth worm jim on 04/04/2021 - 16:46
    +10

    Please don't take any financial advise from this guy (OP). (Mod: removed personal attack) It's like bragging to everyone that you won a million dollar lottery and doing an AMA on it. The only thing that makes it worse is that forums like these consolidate the Ponzi scheme called Bitcoin by enabling ppl to keep pumping money into it and making the bubble grow under the illusion of FOMO. He will pull out, make a profit and see happily see all you lose your life savings. If there are winners there are always bigger losers as well as was the case last time bitcoin fell over. The "I saw this coming" comment is the biggest joke of this century. All of the answers this guy posts are a rehersed script or a massive delusion he is under.

    • [Deactivated] on 04/04/2021 - 16:55
      +5

      this is a great comment

      there is no "investing" in bitcoin, your "gambling". the only reason institutional investors will want in is to ride the hype wave and pump the price further.

      these guys will be the real "whales", if they start investing you small fry are fuked, they will manipulate the shit out of a very novice and scam prone market

      disclaimer; I own crypto and I wouldn't recommend it to anyone who is serious about "educated" investing

      you only need to look at weekly and 24hr trends to see crypto is not serious, its like putting money on the horses, except your odds are better. https://coinmarketcap.com/

      • ilovefullprice on 04/04/2021 - 18:42
        -2

        I disagree on your point about gambling because coins now these days have evolved and have a use case, and it’s slowly being adopted in real world applications. That’s the power of blockchain technology! It’s educated investment if you have done your research and know what’s the use case of the coin you are buying!

      • techlead on 04/04/2021 - 19:30

        you only need to look at weekly and 24hr trends to see crypto is not serious,

        What do you mean by that? My limited understanding of horse better is that you lose everything if the horse doesn't win a race which usually takes a couple of minutes. I don't see any similarity with that and investing in cryptos?

        Let's manipulation in any market, can't eliminate it. You think this doesn't happen in traditional markets?

    • techlead on 04/04/2021 - 19:27

      First, I'm not giving financial advice as its very clearly stated in my original post. I agree, no one should be taking financial advice from me.

      So the people who invested in property in 2000s, won a million dollar lottery?

      What about the people who invested in Google on the ground level, they won the lottery too?

      How is Bitcoin a Ponzi scheme? From what you said, I can say exactly the same thing, just change a few words:

      The only thing that makes it worse is that forums like these consolidate the Ponzi scheme called property speculation by enabling ppl to keep pumping money into it and making the bubble grow under the illusion of FOMO. He will pull out, make a profit and see happily see all you lose your life savings. If there are winners there are always bigger losers as well as was the case last time property prices fell over [Anyone lived through the Perth property crash?]. The "I saw this coming" comment is the biggest joke of this century. All of the answers this guy posts are a rehersed script or a massive delusion he is under.

      What part of what I have been saying is not true? Fiat currency going to zero? Governments printing money out of thin air?

      • earth worm jim on 04/04/2021 - 20:58
        +8

        The biggest pitfall in your view is thinking that Bitcoin somehow compares to Google or holding land or any tangible asset in the real world. Anything that holds any intrinsic value cannot be compared to bitcoin. This is because Bitcoin has 0 intrinsic value and is 100 percent speculation. Its value rises when a bunch of homeboys get together and think it's a good time to pump then dump, make a profit and screw everyone else over i.e. a Ponzi scheme for the select few. It provides no value to anyone and if it stopped existing tomorrow it wouldn't change the quality of life of anyone… except you ofcourse, which is why you are so fanatically defending it, promoting a rags to riches story and implicitly promoting others to invest in it.
        Now if Google stopped existing tomorrow do you think it would change the world in any way ?
        If everyone lost their properties and homes tomorrow will it change the world in any way ? I'll leave that to you to answer.
        While the current system is flawed in many many ways and I will by no means try to defend it… Bitcoin is even worse. Most/All of its value is derived from use in illegal drug trades and insider trading and hopefully for the betterment of this world will not be used to set any kind of precedent in the future world economy.

    • RocketSwitch on 12/04/2021 - 09:02

      Fair point, isn't shares a form of gambling too though? Everything is and no one knows anything. No one is an expert, except maybe DFV!

  • TEER3X on 04/04/2021 - 17:17

    What are your thoughts on ECOMI (OMI) coin OP?

    • techlead on 04/04/2021 - 19:49

      OMI has been on a tear recently. Unfortunately, I don't have it. I've heard good things about it, but don't have time to research more, that's why I didn't FOMO in. I heard about it when it pumped to $0.0026.

      My understanding is that its a marketplace for NFTs. They have their own secure wallet and is backed by Ve-Ve. They have some nice features like augmented reality to show off your NFTs, looks pretty cool. I don't know too much about the tokenomics, that's why I didn't FOMO in. I follow the Buffett rule, if I don't understand it, I will not invest in it.

    • ilovefullprice on 05/04/2021 - 08:27

      Perhaps I could add to this question.

      When you are looking at which coin to invest in, people these days generally look for:
      - the use case of the coin.
      - there are no competition (ie. no other coins are doing the same thing).
      - what is the circulating supply of the coin.
      - whether there is an option to stake/farm the coin to earn interest.
      - how large and how active are community members in the coin’s social media group (in Telegram/Discord/Reddit etc.).
      - how active are the project developers in answering questions in these social media groups.
      - whether there are further developments down the pipeline for the coin’s use case to expand or improve.

      As always DYOR.

  • TEER3X on 04/04/2021 - 17:24
    +3

    I'm not sure if it's still the case now, but years ago, when you searched "Bitcoin" pretty much every article that came up was "Bitcoin at $5k, legendary trader sees it going to $25k", etc, etc. So I think some of the appreciation is just a self fulfilling prophecy.

    Anyway, the hardest thing for me (and probably others) is to do unbiased research. You can confirm your polarised beliefs pretty easily just by googling what you want and there will be a fantastic article that contains everything you believe and it will just reinforce your beliefs to the extent that everything else is wrong.

    So it's good practice to read both sides of the argument and truly entertain the ideas expressed.

    • techlead on 04/04/2021 - 18:50
      +3

      This is where I think people should learn some journalism skills 101. Its very hard to find anything that is unbiased, even with research, you have to be skeptical and look into how it was funded etc etc. This is a just a fact of life, people have their agendas. I'm promoting Bitcoin, but only to increase understanding of it and to debunk some myths about it. I highly doubt that this discuss will move the price of Bitcoin and I somehow can personally benefit from it, that's abit of a stretch. I may be able to benefit from it in the long term by maybe convincing those who might be on the fence to do some more research and make up their own mind.

      Understand the difference between a primary and secondary source. Starting out, read primary sources only, so you get an understanding of the subject matter. This is what I did when I first started out, I read and understood the Bitcoin whitepaper. Of course this is not unbiased, its written by its creator, so of course he is promoting it. Don't look for confirmation of your views, don't avoid contrarian views.

      I actually enjoy talking to a Bitcoin naysayer, because I find that more helpful than talking to a fellow Bitcoin supporter. I want to understand where they are coming from so I can see it from their perspective, maybe they can teach me something or show me something I'm not seeing. There are so many Bitcoin detractors online, notable ones include Peter Schiff (gold bug, he's angle is he has a heavy holding of gold he would like to promote haha) and Warren Buffett (He doesn't understand it). Notable detractors turned supporters include Kevin O'Leary, he was pretty against Bitcoin last time, now 3% of his portfolio is in Bitcoin.

      Watch this hilarious video is Dan Pena, https://www.youtube.com/watch?v=jvBSEbJIAxE, its hilarious. He said this after Bitcoin crashed from $6k to $3.5k and he's gloating about it. His prediction ain't so good today haha?

  • bmerigan on 04/04/2021 - 17:28

    Seems like a bit of a pyramid scheme to me, as far as those who promote it the loudest have invested heavily and stand to gain the most if it becomes more popular. Conversely if people decide it's a fad and it loses popularity then the value will drop.

    • ilovefullprice on 04/04/2021 - 18:35
      +3

      If this argument holds, it would also apply to shares if you hold any, or shares in your super as ponzi!

      • techlead on 04/04/2021 - 18:39
        +2

        Exactly, haha.

    • techlead on 04/04/2021 - 18:38
      +2

      Is that your definition of a pyramid scheme? Then anything can be a pyramid scheme.

      Property owners shilling property saying buy buy buy, spreading the myth that renting is "dead money", they stand to gain if property prices increase. If people decide that property has gone up too much and decides not to buy, its value drops, like from 2018 till 2020, that's a pyramid scheme?

      Someone with CBA shares trying to encourage people to buy it so it increases in value, that's a pyramid scheme?

      People who hold gold trying to encourage people to buy it by promoting it, that's a pyramid scheme?

    • FSTB on 06/04/2021 - 07:33

      This applies to any investment…

      • bmerigan on 06/04/2021 - 21:52

        To some extent yes. But some of them rely much more on promotion than others.

    • bargain huntress on 06/04/2021 - 20:22
      +2

      our entire economy is set up like a pyramid scheme

      we need endless population growth to fund endless economic growth

  • User123321 on 04/04/2021 - 19:23
    -3

    Throw me some cash if you've done so well cheers

    • techlead on 04/04/2021 - 19:36

      Give someone fish, they eat for a day, teach someone to fish, they eat for a lifetime.

      I'm not rich enough to give everyone cash, but hopefully my opinions can encourage your to open you mind, do some research and critically think about what I'm saying. That's all I ask.

      After doing that, you may come to a conclusion that I'm an idiot, that's perfectly fine, as long as you have done some research and some critical thinking before you came to that conclusion.

      • User123321 on 04/04/2021 - 20:22
        -2

        I don't think you're an idiot at all if you've done well good

        Money might make the world go round but you aren't taking it with you when you die remember that

        • techlead on 04/04/2021 - 20:34
          +1

          Money might make the world go round but you aren't taking it with you when you die remember that

          Definitely, totally agree with that. Hopefully, I wouldn't need to decide until a lot later what to do with it after I'm gone. I'm going to enjoy it for now.

          Not sure if you have read this, its really saddening.

          https://www.dmarge.com/2021/04/how-long-you-need-to-save-for…

          The train is pulling away from a lot of people and there's no way for them to caught up.

          • User123321 on 05/04/2021 - 12:58
            +1

            @techlead: Yeah very well aware of the situation that's why most youth are losing hope and opting to not even care about a future but live in the present e.g travelling etc

            The system is setup to make you lose 99% of people will be in the losing category sacrificing most of there live into slavery for little gain the 1% who are at the top and a few lucky people who have done well are the exceptions

            The flaw is with the fiat currency system as you mentioned and the people who control it for example you have people who heavily contribute to society and bettering it who get paid peanuts and some people who play the stock market who make 10x what those other people who contribute to society make

            This is the fundemental issue as well as allowing housing to be use as an investment instead of a human right

            It's why i personally don't really care too much God will sort the evil out we are only here for a short period may as well enjoy it the best you can

  • Drew Peaballs on 04/04/2021 - 20:51
    +3

    I’m pretty open minded. My questions would be:

    • Where do your start?
    • How much do you actually need to start getting into bitcoin?
    • techlead on 04/04/2021 - 21:25

      • Where do you start?
        Read the Bitcoin whitepaper. Understand how the network works. You should be able to explain blockchain to someone else. Go on YouTube, watch some Bitcoin explained videos. Then think whether this is something you want to participate in. Come to a conclusion on whether you feel it is within your risk appetite. Don't buy because other people did and made a lot of money, that's a very bad reason to invest generally, not just for Bitcoin.

      • How much do you actually need to start getting into bitcoin?
        How long is a piece of string? This will depend on your own personal circumstances. If you are unsure, consult a professional financial adviser. As a general rule of thumb, you should invest what you can afford to lose. Keep in mind there some fees which are flat, such as withdrawal fees at the exchange and to a limited extent, transaction fees (these fluctuate with demand), so the lower amount you invest, the more those fees are as a percentage of your total investment. As a general rule, I'd say $1000, but as per above, you need to decide for yourself.

    • ilovefullprice on 05/04/2021 - 10:02

      To see where to start, just search for the word crypto in OzB here and there are some deals (like promo codes etc.) that could get you started. Also, see this:
      https://www.ozbargain.com.au/node/613895?page=7#comment-1030…

      In terms of how much, it depends on your financial circumstances and how much you want to invest in (or some people call it how much you can lose). Nowadays, because crypto is so volatile, people use the DCA approach and buy when there are dips. This of course depends on how much time you have in your life constantly monitoring prices.

      As always DYOR!

  • squaredonut on 04/04/2021 - 21:35
    +1

    I finally bought some btc and eth in December, it’s gone up obviously and I’ve made some money hardly much to be over the moon.

    But I feel like it’s definitely gone beyond anything in value. I know people always go if it drops I’ll just buy more. But is it a better idea to sell now and wait for the next massive dip and buy more or is it probably a 50/50 of if it will ever drop a lot like the other times?

    • techlead on 04/04/2021 - 21:45

      Everyone can look at the chart of the last 10 years and point to where they would have bought and sold to generate great profits.

      It's a little hard to do it as it happens. Are you going to sell your BTC and ETH now? Maybe it will dip more, so you can buy back cheaper.

      I find that when I try to time the market, I always lose, maybe its because I'm not a trader, just seems to always don't work out when I try to do what you described.

  • X200T on 04/04/2021 - 23:26

    I heard from a smaller tax agent claim if buying too frequent of crypto, ATO will treat it as sole trader (business) https://www.ato.gov.au/General/Capital-gains-tax/Shares,-uni… , is this why you hold it in your SMSF? Do you have any outside your SMSF ?

    Using crypto visa card on some site doesn't it trigger as CGT event?

    By the way, which account you use can earn interest against your crypto storage that you mention before?

    • ilovefullprice on 05/04/2021 - 08:11

      You sound like the taxman trying to get more info :)

      If you buy shares regularly, you can also be treated as a sole trader. Being a sole trader isn’t all that bad because you can claim parts of your internet bill, rent, laptop/phone as expenses for running this sole trader business trading in shares/crypto.

  • stupidiot8 on 05/04/2021 - 09:14
    +1

    I wanted to ask @techlead, has this increase in wealth made you happier? Congratulations on the upcoming retirement.

    • techlead on 05/04/2021 - 13:42

      I'm way happier now for the following reasons in descending order (note that increase in wealth is not number 1)

      • My economic analysis is largely playing out, not everything I predicted has come to fruition, I'm not a time traveler or have some crystal ball. During the GFC, massive amount of money was being printed and governments don't seem to care too much about the consequences. Hence I started looking at assets to hedge against inflation, I started with the most obvious, gold, but then Bitcoin caught my eye. I'm proud of the fact that I was able to see value in Bitcoin when very few others did in 2013,

      • I'm proud of the fact that after coming to a conclusion regarding the economic outlook, I acted on it. If I stopped at point 1 and never acted on it, I'd still be happy, but not as much.

      • I now work because I want to, not because I have to, and

      • The increase in my wealth. The issues, this has created a new headache for me, how to maintain my wealth. Now that I have succeeded in wealth creation, I need to figure out wealth preservation now.

      • TEER3X on 05/04/2021 - 20:24

        What inflation are you talking about exactly?

        Also, you should always work, it makes you live longer. (Unless it's work that kills you of course).

  • OzHunterNSW on 05/04/2021 - 09:59
    +3

    Is this a paid ad?

    • TEER3X on 05/04/2021 - 14:29
      -2

      No OP obviously used to buy and sell drugs with Bitcoin when it was very young, and only just got released from jail recently so couldn't touch his crypto until now.

    • mrvaluepack on 05/04/2021 - 20:06
      +2

      More like a pump and dump scheme.

    • RocketSwitch on 12/04/2021 - 09:03

      Yes.

  • Mixinitup on 05/04/2021 - 10:40
    +3

    There has become a need for crypto from the governments continuing to print money unabated. When you invest in crypto you know there is a limited amount available. Holding cash that is continuing to lose value would be the foolish thing. Congrats Op wish I boarded the train earlier but better late than never

    • Top G on 05/04/2021 - 13:25

      Gold has always been the default option?

      • techlead on 05/04/2021 - 13:45

        Correct, but gold has its issues.

        Some issues include:

        • hard to keep, you want 10 gold bars at your house?

        • hard to detect fraud, how do we know all the paper gold actually maps to physical gold 1 to 1

    • TEER3X on 05/04/2021 - 14:30

      Last I checked, inflation was under control.

      • techlead on 05/04/2021 - 22:35
        +1

        That's what the government wants you to believe.

        Don't just look at the figures from the RBA, have a peek beneath the hood. CPI seems under control because it just looks at a basket of goods, but it doesn't capture asset inflation. Look at property prices going up, shares etc, there's all these articles about housing affordability and people crying they can't seem to get ahead and into the property market.

        If you look at the bigger picture, that is the purchasing power of fiat currency, its not under control. Since 1974 the USD has lost 90% of its purchasing power, doesn't seem like its under control to me!

  • ShortyX on 05/04/2021 - 11:41

    Sorry if this has been asked before - did you do much buying and selling or just bought heaps of different coins and held them?

    • techlead on 05/04/2021 - 22:36

      I'm not a trader.

      I buy coins which I believe will succeed and hold them. Then I sell based on the market cycle. I will not want to hold altcoins during the bear market.

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