New answers tagged cryptocurrency
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You might like to take a look at this:
https://www.bloomberg.com/opinion/articles/2020-12-01/bitcoin-is-the-tulipmania-that-refuses-to-die
This seems to be an example of fear of missing out, people want to buy in before the price goes up again. But since bitcoin has no underlying assets, and costs a lot in electricity to produce, is quite easily lost if your ...
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There are a few reasons to be careful about investing in cryptocurrency.
"Get rich quick" schemes are a bad idea
Anything that seems like it could make you a lot of money easily and quickly should be approached with a lot of caution.
This is especially true if we're talking about the finance industry, where there are many people with many years of ...
1
I agree with all of the answers that say cryptocurrencies, like all investments and/or gambles sit on a Risk Continuum, i.e., they have varying levels of risk relative to one another.
More important though is the risk to you. That depends on a few factors including:
1- Your Age, or how many years until you'll need to liquidate investments to finance living ...
0
Perhaps it may be helpful to describe some of the major currencies by market-cap:
Bitcoin - Transfer fees in the double-digits make it essentially useless as a currency and a way to store value. In addition, its supply is still increasing.
Ethereum - Its claimed use-case is a platform for running decentralized applications ("smart contracts"), ...
7
I remember, when Bitcoin first came out, looking at the technology involved and saying "this will never amount to anything other than one big scam." Turns out I was wrong: it's become a fractal scam, with smaller scams inside the big scam and smaller scams still inside of those. But one thing it has never become is a currency of any kind:
A ...
28
I would even argue about the usage of the word "investment".
There is a difference between gambling and investment. If you buy a cow because it produces milk, it's an investment. You invested money in it, and every day your cow will give you milk, and you can drink the milk, or sell the milk, so it will keep producing you value day after day. If ...
8
No, for some values of safe.
While other answers have pointed out that no investments are really safe, cryptocurrencies have an almost unique capacity to go to zero in a short space of time.
Crypto currencies base their value absolutely on trust, in that people trust the maths behind them to ensure their scarceness and the exclusivity of their transfer. If ...
33
How can anyone be sure it wouldn't crash in the future?
You can't. There is no perfect safety in investing. And even investments that are considered pretty safe (like government bonds) are exposed to inflation risks.
For cryptocurrencies specifically, this is a highly speculative asset class. Right now, many people are buying on the hope that this will ...
2
If that was how it worked, then I’d short 10 million dollars worth of Bitcoin, take the money and head straight to Panama which doesn’t have extradition treaties with any country, and spend the rest of my life supporting the economy there.
38
The key concept is margin requirement.
Conceptually, when shorting, you are indeed credited with $60k and negative 1 bitcoin. However, first of all, you cannot simply create such a position from an empty account -- any more than you can go long from an empty account and have 1 bitcoin and negative $60k.
In either case, in order to borrow (bitcoin or cash), ...
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Think of it this way: when you short Bitcoin you are betting that Bitcoin will fall, and you are taking the risk that it won't (you will still be liable to "return what you borrowed" even if the price rises, in which case you will have to buy it back at a loss in order to be able to return it.)
If the exchange gave you the money as soon as you ...
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Quoting @Fattie:
Those orders (beyond the basic ones) are a feature of the software of your broker.
Here's a broker that offers over 50 types of orders for stocks. See if one of them suits your needs and then check to see if your broker offers that type of order.
1
Welcome new users, just give one piece of information,
Note that the "type of orders available" depends on your broker.
Those orders (beyond the basic ones) are a feature of the software of your broker. They're not sort of "built in to the universe" if that makes sense! (So, indeed you'll see questions on here "My brokerage xyz ...
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I believe it is based on GMT (Greenwich mean time).
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This example might be good for a 10 year old.
There are 10 people in the household and they want to exchange money owed to each other for paying for external services and goods such as food/petrol/water/taxes etc. For that they devise their own IOU based currency with one IOU equal to one unit of local currency.
Centralised/bank based payment model
Two ...
-3
It becomes easy to understand by asking:
What problem(s) does cryptocurrency solve?
Or even more deeply:
What do people currently use to solve their problems, and how does cryptocurrency compare to those solutions?
Cheap, near-instant transfer of money around the world
Consider a quad-bike company based in Melbourne, Australia who needs to buy 50,000 AUD ...
7
imagine if keeping your car idling 24/7 produced solved Sudokus you could trade for heroin
Theophite on Twitter
It's funny, but it also explains one of the most crucial parts of any popular cryptocurrency: It takes vast amounts of energy to keep the thing running, and this is by design. Any distributed cryptocurrency has to be expensive to run in order to ...
0
Amount: ₿0.0199
BTC Price #2: €50,503.77516 (brute forced)
Sell BTC: 0.0199 * 50,503.77516 = €1,005.025126
Fee: 1,005.025126 * 0.5% = €5.025125628
Total: 1,005.025126 - 5.025125628 ≈ €1,000 (break even)
If you take this the other way round, you are at the result:
Sell amount = 1000 + Fee = 1000 / .995 = 1005.0251256281407
so your price is
1005....
24
I think the best way to explain it would be step by step, building from concepts that can be explained in more practical terms that she might understand. You may feel the below is overly harsh, but at bear minimum, think of it like this: If you can't articulate why I am wrong about the below [and while the below is quite opinionated, these are indeed ...
2
Your cost basis is $100; if you sell half of your holdings for $100, your cost basis on that is $50 and thus you had a $50 profit on which you owe taxes.
If, in the future your asset becomes worthless and you dispose of it for $0, you have a separate loss of $50 that you can deduct from your taxes at that time.
But for now, you don't get to use imaginary ...
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