Cryptocurrencies - Your Key to Financial Freedom AMA

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.

Ref.

Comments

    • Don't do this. I was on Circle.com with some of my holdings. Next thing I know, they've been transferred to the state of Delaware as lost property.

      Apparently they sent me 4 emails on the matter, but I never received one. Presuming I can claim those funds back (which I'm sceptical), I will have still missed the recent run since November. Exploring legal options, but I suspect I'll be getting nothing out of them.

      Pretty much everyone I know in crypto (evidently including OP) have been screwed by some shit platform.

      Get in via a platform like Independent Reserve, then transfer to secure wallet.

    • The risk there is that if they get hacked (or embezzled etc) all your coins are gone.

      It has happened many times, the worst being Mt Gox that lost 750,000 bitcoins, current value ~ $58 billion

    • By "wallet" I presume you mean hardware wallet?

      There's a golden rule of crypto, Not your keys not your crypto. If you don't control the private keys, its not really yours. When you have a hardware wallet or a wallet app on your phone which keeps the private key on the device, such as Trustwallet, you control your coins. Exchange apps on your phone do not count as your coins are held at the exchange, you don't control the private keys.

      When you leave it on the exchange, you are delegating control to the exchange and that's when bad things can happen. Notable cases include:

      • Mt Gox
        Read up on this, its actually quite interesting. This was one of the very first exchanges for Bitcoin that took off, unfortunately it was ran by a clueless guy. Pretty much from day one it was compromised. The hackers were in the system and was constantly taking Bitcoins from the exchange's wallets.

      • Cryptopia
        This was a NZ based exchange which got hacked. They lost control of their ETH wallets, so all their ETH and ERCXXX tokens got taken

      • Quadriga CX
        This was a Canadian based exchange which collapsed because its founder "apparently" died in India under mysterious circumstances. There was no multi-sig wallet system implemented and he was apparently running the exchange on his laptop, which meant he and he alone controlled all of the private keys to the exchange's wallets. Client funds were inaccessible after his disappearance and apparent death.
        The story didn't end after that, I think they hired one of the Big 4 accounting firms to take care of whatever coins the exchange had control of, and due to a mistake on their part, they sent some of the coins to a wallet which was locked by the founder. It was a huge mess, I think the last I heard, investors lost out.

      Having said that, most of the major exchanges have very good controls and systems in place. For example, Binance has a fund to reimburse investors in the event of a hack. (Secured Asset Fund for Users - SAFU) Its a meme, there is where, "But are funds SAFU?" came from.

      Ultimately, it will depend on how much crypto you have. If you only have a few thousand, I'd suggest you keep it on a platform like Nexos, Crypto.com and Celsius where you can earn some interest. Hardware wallets are not free, they cost from $150 to a few hundred dollars, so its not worth it if you only have a few thousand.

      I keep the majority of my crypto on my hardware wallet, its a definite must if you have over $500k in crypto.

  • If people bit coin miners are being paid for their compute time to check the transactions are legitimate.

    What happens when the last 21million bitcoins are awarded?

    Will anyone provide computing power when their is no payout? If no one provides computing power to check the transcactions, how does bitcoin still function then?

    • They'll still get paid in transaction fees and pictures of cats. Currently those transactions fees can equate to $25USD to $100+USD.

      • +1

        And it's around 2000 transactions per block, so the miner will still do alright :)

        • And it's around 2000 transactions per block, so the miner will still do alright :)

          if you run a mining rig and check 2000 transactions you are paid 1 block. Is that correct??

          Then what do you do with the block.

          I have never mined so I don't fully understand this

          • @gummibear: If your mining rig happens to be the one to guess the correct random number first, then you get the block reward plus all the transaction fees from which ever transactions you chose to put inside the block.

            So you would get 6.25 BTC block reward + around 2000 * the transaction fee

    • None of us will see the last Bitcoin being mined. It will occur around year 2140.

      Hopefully by that time, Bitcoin will be worth millions in which case, the transaction fees per block would be enough reward. In fact, due to the halvening mechanism where the block reward halves every 4 years or so (defined by block number), there will be a "flippening" when fees will start to exceed the block reward.

      The last halvening was May 2020, a bull market usually follows this event, which is what we are experiencing now. Then there will be a bear market until the next halvening, which will be in 2024.

      • This is a great AMA
        It has inspired me to do something with my cash in the bank.
        When was the last halvening prior to May 2020?

  • What is your main crypto that your are focusing on staking wise that you think would give you a good living income for many many years to come? For decades even.

    • If you are talking about decades, the only crypto which I'm sure will definitely survive is Bitcoin. Even Ethereum is up in the air because I don't know how the battle with Cardano (ADA) will play out. It could be a Betamax and VHS situation playing out, not sure who will win.

      • I'm not so sure about that. There are solutions that rival Bitcoin in every way possible that are in development. If you believe that better tech always wins then Bitcoin will surely lose

  • Cardano and Charles Hoskinson are shit

    • Cardano is not functional at the moment, it needs to have the Alonzo upgrade in place to enable smart contracts. I only have a small position in ADA, I have a way heavier bag in Ethereum, which looks like its popping off now.

  • What platforms do you use and suggest to stake your coins (bitcoin and Ethereum) in ?

    • +1

      I personally use Blockfi, Celsius, Nexos and Crypto.com

      • u use different ones based on ur coins, or just spreading the risk? your not scared of any of these companies actually losing your coins

        • +2

          That's always a risk when you hand over your coins for someone else to manage. This is why I use multiple platforms and only the large reputable ones. This doesn't eliminate the risk entirely, but it reduces it.

          I forgot to mention, Binance, they's got really good staking options there as well.

          Its the same with traditional finance, why do you think there is a government guarantee of up to $250k AUD with authorized deposit taking institutions (ADI)? This is because governments recognize that private businesses can fail and they want to instill confidence in people in depositing their fiat currency into these banks. These crypto banks are no different, they can go bust, unfortunately you don't have that government backed safety net, hence you will get a higher return to compensate for this risk.

          You usually get 4-6% interest, Celsius has 13+% on TAUD, a stablecoin pegged to the AUD. No ADI will give you those rates. Its up to you to decide whether this premium they are paying is worth the extra risk versus depositing your money in say an ADI.

          • @techlead: thanks for that. How much % of your portfolio is actually staked and how much is it just kept safe in storage?

  • How high do you think it will go?

    Is there a way to minimise the CGT's?

    I bought some in increments + mine since mid 2010, only sold 4.5 so far, cash only

    • How high do you think it will go?

      What time frame? If you mean just in the future generally, so the question is how low can fiat currency go. There's no floor in fiat currency's loss of purchasing power, hence there's no ceiling to the price of Bitcoin.
      If you are talking about in the next 3 years, short answer is I don't know. As I said before, I don't have a crystal ball, so can't pick the top and bottoms. However, I'm confident that Bitcoin will exceed $100k USD in the next 3 years.

      Is there a way to minimise the CGT's?

      That's what I want to know too haha. One possible way is taking a loan against Bitcoin as collateral. I can't find any definitive ruling from the ATO whether they will recognise such an arrangement as a loan or a CGT event.

      I bought some in increments + mine since mid 2010, only sold 4.5 so far, cash only

      There's definitely CGT payable there.

      • Block-quote That's what I want to know too haha. One possible way is taking a loan against Bitcoin as collateral. I can't find any definitive ruling from the ATO whether they will recognise such an arrangement as a loan or a CGT event.

        I mentioned this earlier, but from what I have read this is all in your SMSF? If so any income derived from the investment cannot be distributed but has to stay in the trust attached to the SMFS? Unless you are 55-60? That's my understanding of SMSF. Do you have any outside of SMSF?

  • +2

    Yet another post getting people to yolo into bitcoin at ATHs, wait for the retrace, happens every year or 2.

    • +2

      That's not the purpose of this thread. I just want a discussion about cryptocurrencies and get people to ask questions they've been too afraid to ask about cryptocurrencies.

      You mean "fomo" into Bitcoin? I definitely don't recommend anyone to "fomo" into anything, however humans are emotional creatures, I have "fomo'd" into coins before, unfortunately. I do manage to stop myself most of the time now.

  • You thought 6k was the bottom? Yikes.

    I read alot of this, not all.

    All I can say is, you need to cash a % out during each bull run. Taking profits is key. Getting 6% from someone like blockfi isn't the best idea when it's locked in for a fixed term.

    Try learning about bitcoin market cycles.
    There is an Australian who's one of the best in the world at market cycle theory named 'bob loukas'.
    Check out his 4 year cycle info on YouTube.

    • +3

      Bitcoin fell from $19900 to $6000, so I thought this was a reasonable guess that its the bottom of the bear market.

      Blockfi doesn't have fixed terms, you can withdraw at any time. One fee free withdrawal per month after that you pay a small fee to cover the gas fees and transfer costs.

      Thanks for the recommend, I will check him out on YouTube. Its easy with hindsight to say, you should have cashed out at $19900 and bought back in at $3500. Its not that simple, its very different to pick the top or bottom, so if you cash out, not only do you need to pay CGT, you also could miss out on a lot of profits. For example, I thought the peak for the last cycle was $10k USD, $1000 to $10k is an amazing return. I think very few people picked $19900 as the peak of the last cycle.

  • -2

    the problem is if it was bought for $1.65 and then now its 65K + CGT on 50% wtf, not going to give free money willingly to politicians ;)
    I took the risk not them, I could have lost that $80K investment.

    What are the safer wallets/exchanges ?

    • The counter argument to that would be, Australia is a safe and stable nation, that doesn't come cheap. So these taxes is a way of "giving back" to society, because the country plays a factor in your success. Would you be able to replicate your success say in Iraq or Syria? Taxes is the price you pay for a civilized society.

      Another example which ties in with cryptocurrency would be, Would Warren Buffett be just as successful of an investor if he was born in Argentina? Argentina used to be a very rich and prosperous nation until economic mismanagement caused hyperinflation which continues to this day. You can go through thousands or millions of strategies within Argentina and you'd still be met with failure due to the continuously declining value of the Argentinian fiat currency. The only ONE solution is for someone to move all their money out of the Argentinian Pesos and buy USD or some other commodity like gold, silver or Bitcoin.

      Binance is a good exchange, it has a fund to help reimburse investors in the event of an hack, called SAFU. They now have an Australian entity, so you can transfer AUD directly into them. They have a good app as well.

      • The only ONE solution is for someone to move all their money out of the Argentinian Pesos and buy USD or some other commodity like gold, silver or Bitcoin.

        This is an interesting one. I wonder what would happen to the price of btc if Argentina adopts Bitcoin as their national currency.

        • That will never happen. The people in Argentina have already adopted it as their currency, but the government will never officially do that, because they don't have control of it. They can't print it, no government will give up their power to make monetary policy.

  • Sorry to say but are you really trying to give advice when you essentially gambled every cent that you earnt and got lucky?

    • +4

      That's a very broad definition of "gambling". If we use that, they investing in shares would be "gambling" in your books? Investing or "speculating" on property would also be gambling?

      Like I said before, my reasoning and belief in Bitcoin is based on macro-economic factors. I had faith in the integrity of its network (it has never been hacked since its existence) and the fact that fiat currency will continue to devalue (lose purchasing power) and people will be looking for a reliable store of value to hedge against inflation.

      Also, I'm not giving any advice, I'm expressing my opinion. You are free to disagree and free to not buy any Bitcoin or any other cryptocurrencies. I don't know your personal circumstances, so can't give you any advice.

  • -1

    A fool and his money are easily parted… and here is a classic case of it.

    • +1

      1000% agree, and here he is bragging about it like he's some sort of oracle..

      • +5

        We all have our own personal views of what the future will hold and position ourselves financially to it. Those predictions which we all make, drives our financial decisions today. In a way, we are all "oracles".

        The people who are FOMOing into property now, what do you think they predict about property prices? Of course they think it is going to go up in the future, hence you are investing in it. That makes them "some sort of oracle", right?

    • +5

      Not sure how this applies here. My money has been accumulating and the total amount is going up, do you understand what "parted" means?

      • -1

        Yeah I know exactly what parted means.
        And parted is what you will be in the long run when you gamble your entire life savings on something so volatile and unregulated.

        • +2

          We shall see. It hasn't parted yet, let's see in the long run. For now, I'm enjoying it.

          Every emerging asset is volatile. Gold was pretty volatile before. As for the "unregulated" part, as long as you have a good understanding of how Bitcoin works, then you will most likely not be scammed. Look at the "my mistakes part of the post" to see the mistakes which lost me money. Regulation would have helped in some of those situations but not all, for example being scammed, unfortunately this happens every day and even when dealing with regulated entities like the Big 4 banks, they aren't going to reimburse you if unknowingly sent money to a scammer.

  • +1

    For me all this is a hog wash … no way you can make USD45m for 8 years, starting with nothing. You said you have bought at price around $10k - that means you have invested at least $3-4m in 2012.

    There are other people here who bought around that time and they can see the difference in their accounts. And most of them started with 10-20000 like you.
    The only way to make USD45m is to start with more - something like 6-7 figure.

    Happy retiring :)

    • +3

      I'm going to take a guess and say you don't follow the cryptocurrency markets very closely or have much of an understanding of cryptocurrencies? Its not meant to be a bad thing, nothing against you, just an observation derived from your comment. Its ok, you should do more research and find out about it. Keep an open mind.

      For someone who started investing in 2013 and regularly buying not just Bitcoin, but also the altcoins, having $45 mil USD now is actually on the lower end. I know people who has way more than more. They've made riskier bets, buy smaller cap coins which turned out amazingly for them. Take Eth for example, its Initial Coin Offering (ICO) was held on 1st July 2014 at a price of $0.30USD. I thought it was a scam at the time. I don't mind admitting my mistakes, in fact I've also been scammed before and outlined it in the original post. I didn't buy ETH until it was $10. ETH is now $1990. So if I invested just $7000 in the ETH ICO, it would be worth more than $46 mil USD today.

      Not sure if you have heard about this guy who bought $17k worth of Theta last year, he has over $1 mil today in just one year. https://stockhead.com.au/cryptocurrency/theta-riches-young-a...

      You said you have bought at price around $10k - that means you have invested at least $3-4m in 2012.

      No I didn't. I bought my first Bitcoin in 2013. The price of $10k per Bitcoin was only a pipe dream. The price in 2013 ranged from around $200 to $1000USD. I told people Bitcoin will be worth $10k USD one day, they thought I was crazy.

      Up to you if you believe my story or not, doesn't matter to me. All I ask is that you keep an open mind about cryptocurrencies and do abit more research.

  • +1

    this is awesome
    thank you op techlead

    are you getting overwhelmed by questions?

    • Yes, but that's a good thing, I expected that. It shows that people are engaging. Some are curious, some dismiss cryptocurrencies out of hand, I hope those people who dismiss it can keep an open mind and research and find out more about it. Maybe those detractors will change their mind.

      • +1

        Maybe those detractors will change their mind.

        I really want to believe in crypto currency, I use one called Liven all the time. But the truth is, I haven't read anything that makes me think crypto has real every life use case.

        Think of yourself for example, you buy bitcoin to leave it there and do nothing other than earn interest. You and Micheal the biggest BTC bulls I've been hearing does exactly that with BTC. Nothing. Just hold. That's it. In fact, the idea is just hold as long as you can.

        That doesn't sound like a productive asset. That doesnt sound like an asset thats gonna take over the world (and it must if it will reach $1m bucks as you say inevitably will.)

        • +1

          I use liven as well, its just an ERC20 token on the Ethereum network, that's one of the real world use case for blockchain as well as the Ethereum network, which just blasted through its all time high (ATH) today by the way.

          You just named a use case for Ethereum, so at the very least Ethereum is doing something and you are interacting with it in real life.

          As for Bitcoin, its a very secure network, which everyone trusts, that's where its value come from. What is your definition of a "productive asset"? What do you think the vast majority of gold and silver is doing? Most are just sitting in vaults "doing nothing".

          What Michael Saylor is saying and I totally agree with, is that Bitcoin is an asset which will appreciate in value, as its network improves, become more widely adopted, demand increases and fiat currencies continuing to lose its purchasing power hence, what do you do with an asset that keeps going up in value? You hold it forever. What do you do when you have a football team that's a cashcow? You hold it forever and milk it. When do you get rid of an asset? When it becomes impaired or you are no longer to fund the debt for it, if applicable.

          Bitcoin will "take over the world", as in, it will become more valuable as more people trust it and want it. There can only ever be 21 million Bitcoins in existence and 1 million is Satoshi's stash while an estimated 2-3 million has been lost by people forgetting their passwords.

          • -1

            @techlead:

            I use liven as well, its just an ERC20 token on the Ethereum network, that's one of the real world use case for blockchain as well as the Ethereum network, which just blasted through its all time high (ATH) today by the way.
            You just named a use case for Ethereum, so at the very least Ethereum is doing something and you are interacting with it in real life.

            You can call it a real world use case. But its a marketing app, it could do the same thing without any blockchain involved. You can process payments and let people search for resturants, you can give people 10% back. I cant see where the blockchain adds value, I'll be happy to educated.

            What do you think the vast majority of gold and silver is doing?

            Why do you keep coming back to gold and silver, is it because that is all you have to fall back on?
            There are millions of productive assets, gold and cyrpto are not. Happy? Now can you educate me on how people lives have flourished from BTC?

            • +1

              @cloudy: This is the main way the blockchain adds value in Liven's case, Liven do not need to come up with security measures to prevent fraud, eg hacking their servers and someone manipulating their points balance for fre cash. In this case, they'd need to hack the Ethereum network or the smart contract itself. The weakest link here is the Ethereum smart contract, if its written well, it should be secure. Using the blockchain allows Liven to easily secure the token and not haven't to worry about someone manipulating their balance.

              As for search restaurants, that's got nothing to do with blockchain, that's just the functionality of the app.

              Why do you keep coming back to gold and silver, is it because that is all you have to fall back on?

              I'm giving you real world examples of assets which, like Bitcoin are considered "unproductive", yet still has a place and use in the world economy. Gold has a market capitalization of around $11 trillion. Bitcoin is only $1 trillion. Bitcoin can replace gold as a reserve asset and if it does, that's all I need. 11x from here would be amazing for most people.

              My point is, there is a place for what you consider as "unproductive assets" in the world. I'm merely highlighting the fact that there is a use case for Bitcoin, there is a place for it in the world and as Michael Saylor put it, Bitcoin is an asset with the biggest potential asymmetric returns at the moment.

              • @techlead: I can understand BTC replacing gold as the next unproductive asset. If that is the BTC bull consensus that’s fine. Im happy to accept that.

                I'm merely highlighting the fact that there is a use case for Bitcoin

                Sorry if I missed this, but what’s the use case of BTC that you highlighted?

                • +1

                  @cloudy:

                  Sorry if I missed this, but what’s the use case of BTC that you highlighted?

                  As an "unproductive" reserve asset replacing gold. If Bitcoin achieves that, its value will skyrocket and will keep going up as it hedges against inflation. Its already happening, some fund managers are selling gold to buy Bitcoin.

  • +12

    Bitcoin is a zero-sum game. When these people tell you they're making millions or are going to one day, who do you think that money is coming from? Their only counter is 'yeah, but you can shill and rip off other people too'. It's a pump n' dump pyramid scheme. Now that the billionaires have already piled in, how much longer do you think it has left to run?

    But suppose you're one of the 'early adopters'. After all, who among us is really above ripping off other people for great personal gain? Particularly if we imagine them as the 'evil bankers' rather than 20-something males who got a hold of mum's credit card. Well, even if you do invest a few grand in a particular coin (the most I'd say most people are willing to lose entirely), the most you can hope to gain is probably a lot less than you'd imagine.

    Consider the following scenario. You invest $1000 in 1 coin @ $1/coin, and $500 in 5 altcoins. Your main coin successfully reaches 300x its original value (think Ethereum):

    10% @ 20x = $2000 ($18,000 left)
    15% @ 40x = $6000 ($30,000 left)
    19% @ 100x = $19000 ($56,000 left)
    36.5% @ 200x = $73000 ($39,000 left)
    19% @ 300x = $58500 ($1500 left)

    $158,500 total - $1500 initial investment = $157,000

    You HODL 0.5% forever:

    0.5% @ 1000x = $5000

    We always imagine cashing 100% out of a single coin at the peak, but of course it never works out like that. We feel a loss ~2x that of a gain, so we always want to take about 33% of the money off the table at any time. Remember Deal or No Deal and the offer between $0.50 and $200,000 would always be about ~$70k? But giving us this level of comfort would make our returns far worse. So in this plan, we take very little off the table early on, and even at 150x, we've only cashed in $27,000 with $84,000 still at risk. I'd say this is about the limit of risk tolerance, and still your reward won't even buy you a flat. And that's before you pay tax.

    Now the counter to this would be 'yeah but I toked up and bet the house', but that implies you already have a house to bet, and there isn't really much gained from having a second house. Dentists don't need to win the lotto. Fools who bet irrationally and stay steadfast, typically act the same way when it comes to cashing out. They have no plan and end up losing everything.

    I hope this helps at least one suicidal/depressed person feel better about 'missing out'. The crypto craze has hurt a lot of people and achieved nothing else of note. Aside from the suicidal FOMO people, people can't buy GPUs to play games, and a lot of time and energy has been wasted.

    • +1

      Bitcoin is a zero-sum game

      You don't provide any supporting evidence for this. Do you think the share market is a zero-sum game? Do you think the property market is a zero sum game?

      From Wikipedia, "a zero-sum game is a mathematical representation of a situation in which each participant's gain or loss of utility is exactly balanced by the losses or gains of the utility of the other participants." An example of a zero sum game would be an option which binds one participant to buy a share and sell a share at a set price either within a time period or on a certain date. This is a zero sum game because if one person gains $50, the other play loses $50.

      For example, take an options contract where it binds a person to sell one CBA share for $150 and the other person to buy one CBA share for $150 on a certain day, assume no transaction costs and other expenses. Let's say on that certain day, the market price for a CBA share is $100. This means the person selling the CBA share gained $50 and the person buying it lost $50. This is a zero sum game.

      The cryptocurrency markets don't operate this way. I'm talking about the spot market only where participants buy and sell freely, just like on the ASX, no options and derivatives involved. Buying spot Bitcoin is NOT a zero sum game.

      I don't know what your example is trying to prove nor do I understand what you are trying to calculate.

      The crypto craze has hurt a lot of people and achieved nothing else of note.

      Financial markets has hurt a lot of people. Look at what happened in the Great depression in the 1930s, Bitcoin was definitely not around then. This is a human problem. All the hurt from the GFC just before Bitcoin was created, all of that was caused by humans in the financial markets. As for "achieved nothing else of note", I guess that would depend on your definition of "of note".

      I think Bitcoin has achieved a great deal in the ten short years of its existence.

      • It solved the double spend problem

      • It allows people in countries with hyperinflation to hedge against that, eg, the people in Turkey and Argentina.

      • It introduced blockchain technology to the world and now there are many other real world uses for it

      • My understanding, is that it is zero-sum, because the only way to recieve greater value (fiat), is for someone to come along and pay a higher price. The purchaser loses value, cancelling each other out.

        Alternatively, stocks will pay out cash from their annual profits, or the company will be the purchasing party, with buy-backs. Properties will have rental incomes.

        I guess crypto-miners have the win-win scenario, but traders/holders are zero-sum.

        • My understanding, is that it is zero-sum, because the only way to recieve greater value (fiat), is for someone to come along and pay a higher price. he purchaser loses value, cancelling each other out.

          That's not what zero-sum means. Bitcoin gains value from adoption from improvements to its network. Its code is continually being updated to fix bugs as well as prevent potential exploits. These improvements also drive up the value of Bitcoin. The network has come a long way since 2009.

          • +1

            @techlead: Warren Buffett hit the nail on the head when he was asked about Bitcoin a few years ago:

            "A cheque is a way of transmitting money too. Are cheques worth a whole lot of money just because they can transmit money?"

            • @Gooba: Warren Buffett doesn't even use a computer to read his emails, he gets his secretary to print it out. So I don't think I'd be trusting his understanding of Bitcoin haha.

              Cheques are not a fair comparison to the Bitcoin network.

              Warren Buffett is not a big fan of the property market either by the way.

              • @techlead:

                Warren Buffett doesn't even use a computer to read his emails, he gets his secretary to print it out. So I don't think I'd be trusting his understanding of Bitcoin haha.

                The man understands currency, he has more than most.
                If BTC isn't cryptocurrency, what is it?
                If cryptocurrency isn't currency, what is it?
                if cash and cheques is not a form of currency, what is it?

                Cheques are not a fair comparison to the Bitcoin network.
                Cheques are widely used and Bitcoin is not, is that what you mean?

                Warren Buffett is not a big fan of the property market either by the way.
                you must know another Warren Buffett.

                • +2

                  @cloudy:

                  The man understands currency, he has more than most.
                  If BTC isn't cryptocurrency, what is it?
                  If cryptocurrency isn't currency, what is it?

                  I think its misnamed, its supposed to be cryptoassets not currencies. I'm not using my Bitcoin as currency.

                  Ok, let's explore your example of cheques. Cheques itself is not a network. How do cheques work, they are essentially an IOU issued by a bank. So you deposit the cheque with your bank, your bank then sends the cheque to the issuing bank for verification. If verified and if there's funds in the other account (if not, it will bounce), funds are transferred into your account. So if we look at this system, cheques is just one cog in this system. I'm sure we can both agree, banks have value, right? Buffett's comments highlights a fundamental misunderstanding of how Bitcoin works. If I was to assign a value to the system of transferring value via cheques, I'd give it a negative value, they'd have to pay me to use it.

                  Let's look at what the Bitcoin network is. It is a decentralised and censorship resistant network which enables value (Bitcoin) to be transferred anywhere in the world. Have you tried to deposit an international cheque? How long did it take? I recently transferred $300k USD worth of Bitcoin from one exchange based in the US to another based in Europe, it took less than an hour. Further, how many times has banks been hacked? Bitcoin's network has yet to be hacked since its existence (bar an incident where 184 billion Bitcoin was minted via an exploit which was rolled back and fixed within 5 hours, this wasn't technically a "hack" as all balances was safe, it was just someone was able to create 184 billion Bitcoin).

                  This is why the Bitcoin network is valuable and a cheque is not. They'd need to pay me to use a cheque and it would have to be a pretty big payment to compensate for my time in using such a cumbersome way of transferring money.

  • Interesting read

    • +1

      It is, but the OP is a an imposter, who would log in to OZB to ask how to fix a TFT screen having 45 mil in cash? You must be really short on brain to ask that on the internet.

      • +6

        I really don't see what the issue is in me wanting to see if I can repair a screen, instead of throwing it out? I also don't have $45 mil cash, its all in crypto.

        I like to repair electronics. If its an easy fix, then it would avoid unnecessary e-waste. I've fixed a lot electronics before including my washing machine when its motor belt broke. I really don't see what the problem is.

        • +3

          It's this mindset that keeps you at 45M, and vice versa for d86.

          Very inspiring read, cheers for spending time to explain it out.

  • +1

    Mate do you think bitbucks will hit 1 million? My mate bought 2 or 3 bitbucks when they were around 4 grand each and now he’s hoodling them in the hope it hits 1 mil each. His plan is to buy a saint kilda penthouse for 4 mil. He’s currently living at home in Rowville with his parents

    • If BTC goes to 1mil every owner of St Kilda penthouses will be more than happy to sell it for … 50 mil :)
      It's just 50BTC - easy money.

    • I think Bitcoin will eventually reach $1 million USD each. Don't know when, but it is inevitable.

      I'm not familiar with this "bitbucks". I hope your mate didn't fall victim to a scam and bought an ERC20 token called "bitbucks". If so, I have no idea if it will ever reach $1 mil.

      :D

      • Haha bitbucks is his moniker for bitcoin

        He even has a shirt that’s says ‘I’m a hoodler’ and he constantly gets stopped by randoms in the street getting asked ‘you have bitbucks too?’ and then chats about how they’re going to take over the world with their riches

        It gets annoying but that’s partly because I have major FOMO

        • Well, if you are referring to Bitcoin, then yes, I think it will eventually reach $1 mil one day. Don't know when, and its not a matter of if, because its inevitable.

          If that's all your mate is doing, just waiting after buying those 4 BTC, then he should do something more productive with his life. It may not reach $1 mil each during his lifetime. Also, property prices may not be at $4 mil when Bitcoin finally reaches $1 mil each.

      • +1

        That would make it half of the world's economy at current rates

        • Do you think the world's economy will stay the same? It will also grow and expand, but the rate at which Bitcoin will grow would be faster, because it is still emerging. I suspect once Bitcoin gets that big, volatility will decrease and it would become more stable.

          • +1

            @techlead: No, the world's economy won't stay the same, but it won't increase massively on a per capita basis. BTC is easily worse than a myriad of other cryptocurrencies - I think that it will be replaced by more useful variants that provide value as part of the chain long before it gets anywhere near 1 million.

  • +1

    Its interesting to see the Australian community is so slow to adopt new tech. The Australian government have been a market leader in adopting such crypto currency with their funds. Its very interesting to see the government infront of the community.

    First i heard is Australia bank investing in 2017 and the government

    https://www.google.com/amp/s/www.coindesk.com/australia-to-s...

    https://www.google.com/amp/s/www.fool.com.au/2021/02/09/cba-...

    I really thought in 2021. Most would have taken the time to research it or look into it in Australia

    • Oh no, can't edit the typos

  • Whats the best Crypto Tax tracking software for Australian use that can also track staking, yield farming, coin swaps and other complexities?

    Would also like to know some good tax reduction strategies aside from 50% off capital gains after a year.

    • I just use Excel.

      If you plan to sell completely, the CGT tax offset for long held assets is the only reduction I'm aware of.

  • Are there any ATO implications if you continue to hold and just use Living Room of Satoshi to pay all credit card bills? Have you tried it? Could possibly buy some cheaper properties using credit card perhaps?

    • +1

      Its my view that using Living room of Satoshi will still trigger a CGT event, especially if it came from a hodl position. I think the personal use exemption only applies if you buy Bitcoin then use Living room of Satoshi or some similar service to pay bills in a short period of time, eg a few days difference. Also the personal use exemption is capped at $10k. I don't think many properties are $10k.

      If you buy, and wait a year before using it to pay bills, I think a CGT event still occurs. I've never used Living Room of Satoshi, because I think their spread is too high.

  • what are your thoughts on NFTs?

    • I think its a great use of Blockchain, this is cryptokitties with a real use case.

      I personally don't like art in general. I don't understand why people would pay hundreds of thousands of dollars for a painting or sculpture or some other form of art, it makes no sense to me. Of course, I know the value of art is in the eye of the beholder, so I do get why some of these pieces go for eye wateringly high amounts. Good on the artist for creating something people likes and good on the person buying it. I don't get it, so I don't own any NFTs.

      I do want to get exposure into this space, so I've been looking at the NFT platforms to see if I can catch the wave.

  • I'm assuming this is how you send coins from Coinspot to an external wallet?

    • Yes, that is. That's how you send Bitcoins to external wallet addresses in general.

      You get the receiving address from your mobile app, hardware wallet, another exchange or whatever wallet, then you tell your current exchange to send your coins there. Always copy and paste the address, verify that it copied correctly before sending it.

  • Coinspot or Swiftex?

    • I have not used Swiftex before. I've used Coinspot, its ok, just a standard exchange. The cryptos I buy from there, don't stay on there for long.

  • What are your thoughts on buying cryptos in platforms such as etoro?

    • +1

      I have only used eToro once. To me that platform is rubbish, the spreads are skyhigh and from what I can see, you don't actually buy Bitcoin with it, it looks like a contract for the difference (CFD). So when you long, you gain when Bitcoin goes up and loses when it goes down, but you don't actually own any Bitcoin.

      I signed up for their $50 offer, I closed my account after I got the $50. I wouldn't recommend eToro.

  • Is it too late to buy crypto and make some good money?

    I feel we have missed the boat on BTC where the gains now will be 2x and maybe 3x and maybe just maybe 10x?
    Unless there is a major selloff?

    What other coins do you think today are at the levels where BTC was say 8 years ago?

    • +1

      TLDR: No, its not too late.

      Long version:

      People have asked this when Bitcoin was at $100, $1000 and $10,000.

      I don't think there is ever a ceiling to the price of Bitcoin, because there is no floor to the purchasing power of fiat currency. As fiat currency loses its buying power, with everything else held constant, Bitcoin price should go up relative to the devaluing fiat currency. Then you add in, increasing demand and decreasing circulating supply from the halvening of block rewards and the fact that there can only ever be 21 million Bitcoin in exist, the price will just keep going up.

      Of course, it wouldn't go up in a straight line, it would fluctuate and bounce as around, but the trend is up. If you chart the yearly lows of Bitcoin each and every year from 2009 till now, you will see that it has increased year on year every single year apart from 2015. So the trend is up and the trend will always be up because fiat currency values are going to zero from rampant printing. Do you think the RBA will stop printing? Do you think the US Fed will stop? They've said they are prepared to print "unlimited" money. 22% of the circulating supply of USD was printed in 2020! $9 trillion USD.

      https://www.somagnews.com/9-trillion-story-22-of-us-dollars-...

      • True but surely getting in is harder now right?

        If someone wanted to buy 1 BTC now that will be harder than buying at say 10,000? But surely we can buy fractions and still ride the wave.

        But alternatively some other crypto may still end up giving higher returns for those entering now. Maybe ETH or ADA from my basic knowledge?

        • +1

          Why must you buy 1 BTC? You can buy a fraction of a BTC. One millionth being the smallest unit. As long as you hold BTC, you are on the rocketship.

          Be careful of other cryptos as they will be smashed alot harder during the bear market. As Michael Saylor, CEO of Microstrategy, put it, Bitcoin is the Apex asset at the moment, nothing comes close, there's no substitute for it.

  • I bought XRP and my @rse still sore

    • Haha, I never touched XRP. I was skeptical in the beginning, even more skeptical now. I'd consider buying shares in Ripple, but definitely not touching XRP.

      • But a website told me recently: "XRP can make you rich. Although it has seen a major drop recently, several factors imply that it is a good investment and that its price can increase in the future. XRP is being tested in selected banks as a replacement for SWIFT money transfers."

        Vested interest do you think?

  • How old are you OP do you have kids?

    You seem as though alot of this knowledge you have gained you have gained through years and years of experience.

    Thanks for sharing.

    • +3

      I'm in my early 30s with one young kid.

  • Why put money into stable coins?? Or why cash your other cryptos into stable coins when you think the market is going bad??
    Why is moving into stable coins better than selling back into cash and waiting??

    • 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.

  • 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?

    • 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.

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