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El Pinguino · 08-03-2022, 14:46

Quote:

Originally Posted by dannc

How do you buy a loaf of bread with a gold coin?

An expensive coin will have to be traded for something and then be traded for things that are worth much less.

Old US silver coins would be more easily traded, but one still has the problem that the coin is worth more then a loaf of bread. I guess at some point, one starts chipping off a part of the coin, i.e., a Piece of Eight.

Having the gold coin for big purchases is a good idea but one has to figure out how to break it down....

Course, a bag of silver coins is harder to hide and protect than a gold coin.

People have been known to sew diamonds of various values into their clothing....

Later,
Dan

How do you buy a loaf of bread with crypto or a $100 bill?

The money changers will always be with us. In fact it is a pretty good business to be in at any time. Change someone's Euros into US$ - put 5% in your pocket. The next punter that comes by - change his US$ into Euros - put 5% in your pocket.

Someone turns up in Punta del Este and wants to change a kruger rand into pesos -- put 20% in pocket. Next bloke wants to buy gold with his pesos .....

I think I see a change in my career path on the horizon.

El Pinguino · 08-03-2022, 16:46

Another way of shifting wealth is the humble postage stamp.

Not much of an option from Germany to South America but probably still valid from say Russia to the UK.

During the apartheid days in South Africa they had quite strict export controls on money.
Easy fix, invest your Rand in half a dozen valuable stamps, take them to London and sell them through a philatelic auction house.
https://financebriefly.com/most-valu...africa-stamps/
So you make a nominal loss on your purchase price but you now have £UK.

The other way was to build a nice yacht using your Rand, sail away, sell for $$$.

Or you could just go 'the full Bagley'
https://thebagleybrief.com/the-novels/the-golden-keel/

jmschmidt · 08-03-2022, 16:59

Crypto "currencies" are unstable and one of the poorest forms of preserving value. They are simply a trading media where you might make a buck or two over the short term.

If the value of your cryptos is going up, every time you buy a new Tessla or a cup of coffee at Starbucks with them you have created a taxable capital gain, either long-term or short-term depending on when you bought them. These transactions are considered barter exchanges in US tax law. As such the provisions of FIFO will determining your tax liability. Conversely if you buy something with you cryptos that costs less that what you paid for them you don't get the tax deduction.

Contrary to the mythology Cryptos have been hacked countless times for billions from the exchanges. The idea that nobody can find yours or remove them from your wallet or find out what you've spent them on is a fantasy perpetuated by the crypto industry.
Even our incompetent FBI can figure out how to strip someone's wallet.

**s/v Jedi** · 08-03-2022, 17:21

It is astonishing how many comment on crypto negatively without even knowing how crypto and the blockchain works.

No, crypto can not be hacked; wallets kept on the Internet can be hacked. If you are serious you keep a cold wallet or better a hardware wallet and your currency is perfectly safe. You can still loose it just like a real wallet.

The weakness is the exchange between fiat- and crypto-currency because that is where governments can still control the process.

I would never hold crypto that is linked to a fiat currency: it erases the #1 advantage of crypto imho.

Shanachie · 08-03-2022, 18:10

Quote:

Originally Posted by s/v Jedi

It is astonishing how many comment on crypto negatively without even knowing how crypto and the blockchain works.

I guess Jedi knights know things that we mere mortals don't.

I've made a good living investing my own money, without a real job, for 14 years. I'm knowledgeable about economics, finance, business and related topics.

Yet, reading about bitcoin over the years, I have yet to see an article that explains coherently what is going on.

I see remarks by people who want to get rich quickly without working, I see remarks by people who are sure they are onto the next big thing, and I've seen remarks by people who think they know what's going on, but don't actually.

My best guess is that some people invented a system that looked like the new hot trend in tech and used it to award themselves many bitcoins before doing quite a sales job on the web.

They succeeded wildly in making bitcoin and blockchain an Internet meme, reaping fortunes as more and more people bought into it. (See how the penny stock market works ...)

It will continue to be a radically unstable form of speculation until something causes the market to collapse. Then the curtain will be drawn back, and the wizard revealed as a mere man.

Blockchain has many potential great uses in the future. Look for it to shred the financial industry as innovators figure out how to eliminate the middlemen collecting all of their fees.

But as a currency? With no Fed or FDIC insurance? Well-read people will remember the Great Depression, when bank runs wiped out many investors and savers after people lost confidence in the currency.

**s/v Jedi** · 08-03-2022, 19:10

Quote:

Originally Posted by Shanachie

I guess Jedi knights know things that we mere mortals don't.

I've made a good living investing my own money, without a real job, for 14 years. I'm knowledgeable about economics, finance, business and related topics.

Yet, reading about bitcoin over the years, I have yet to see an article that explains coherently what is going on.

I see remarks by people who want to get rich quickly without working, I see remarks by people who are sure they are onto the next big thing, and I've seen remarks by people who think they know what's going on, but don't actually.

My best guess is that some people invented a system that looked like the new hot trend in tech and used it to award themselves many bitcoins before doing quite a sales job on the web.

They succeeded wildly in making bitcoin and blockchain an Internet meme, reaping fortunes as more and more people bought into it. (See how the penny stock market works ...)

It will continue to be a radically unstable form of speculation until something causes the market to collapse. Then the curtain will be drawn back, and the wizard revealed as a mere man.

Blockchain has many potential great uses in the future. Look for it to shred the financial industry as innovators figure out how to eliminate the middlemen collecting all of their fees.

But as a currency? With no Fed or FDIC insurance? Well-read people will remember the Great Depression, when bank runs wiped out many investors and savers after people lost confidence in the currency.

I will admit that I ignored it for years but decided to study it in detail a couple of years ago. https://en.wikipedia.org/wiki/Blockchain Is a good start but it isn’t reading for the weak of heart… I also found good Youtube videos explaining the what and how to it.

Yes, the masses see this as a way to get rich quick and some succeeded. But that is not what this thread is about. Ignore all that hype or it will leave you lost and missing the benefits of crypto.

Your example about the Great Depression and Fed or FDIC insurance show that you did not yet grasp the core importance of crypto: the fact that banks and government can’t touch it when you don’t want them to, that it will keep it’s value when fiat currencies fail and that it gives financial power back to the people is the big revolution from cryptocurrency.

Also, it is volatile but that doesn’t mean you lose value. Do you think institutions and companies like Tesla would buy billions of crypto just to see it evaporate? Do you realize the total value represented by crypto currencies? Bitcoin alone is 775 billion USD ! This isn’t kids playing bank. For securing funds you simply buy low and hold it in a hardware wallet. As long as you have that wallet and the backup secret cypher, it’s untouchable.

For buying low you simply read the graph just like for other currencies or stocks etc. You can even use technical studies like MACD or RSI.

I like physical silver and gold as well. But these need to be stored securely in the real world, which is more difficult than for crypto where you can simply buy a hardware wallet.

Pauls · 08-03-2022, 19:44

Jedi's post is completely accurate. Some of the other posts on this thread simply display a lack of understanding of crypto. The cryptos which are not tied to a currency are volatile, and if you do not want the volatility then you should not own them. However, cryptos enable an individual to hold wealth completely outside the banking system and that wealth can be transfered anywhere in the world that has access to the internet, regardless of sanctions, transfer blockages, etc. Yes, you can buy a loaf of bread with bitcoin, if the seller will accept it. And lots of people do.

As a real world current example of the usefulness of crypto, consider the Ukranians that want to get out of Ukraine. The banking system is shut down. It is possible to send someone in Ukraine that you want to help funds to help them get out by using Bitcoin. It is a complete bypass of the banking system.

Shanachie · 08-03-2022, 19:51

This isn't an economics forum, so I'll keep it simple, but hopefully I'll persuade a few people to stay far, far away from crypto.

The purpose of money is to provide a stable medium of exchange. When I sell you something, I want to know you are paying me properly. When you do work for me, you want to know you're getting a fair wage.

The beauty of the Federal Reserve and FDIC insurance is that they keep the U.S. dollar stable. That's why it is the world's reserve currency. To do that, they have to adjust the size of the money supply and guarantee you will get your money when you want it.

Crypto? The creators claim that only a limited amount of coins will be issued. That's a problem, not a feature. Read about the gold and silver standards to find out why.

Someone steals your wallet or "pulls the rug" on your exchange? You have nowhere to complain. You're just screwed. People have lost millions this way.

Crypto is money for people who want something for nothing. I'm not saying you can't profit. John Maynard Keynes famously said the markets can stay irrational longer than you can stay solvent.

But recognize that buying crypto is like going to the casino. You might get lucky and hit the jackpot. But most people won't. Smart people don't do either.

The people creating crypto are the house. Everyone else is the crowd of gamblers. And the house always wins.

requiem · 08-03-2022, 21:30

I'm with the anti-crypto crowd on this topic. The risk/benefit doesn't really pencil out. Blockchain itself has uses, but as a currency crypto has issues.

There has always been a small but vocal crowd declaiming the coming fall of fiat. To me it's a case of a little knowledge being a dangerous thing. They will likely eventually be correct, long after their bones have mouldered into dust, but only because change is inevitable. Bitcoin, for example, will also eventually be replaced by some new thing, and the bagholders of that future time left with worthless wallets.

I'd advise having a bank account in a stable country with sufficient funds, and if you have to bail, don't wait until the last minute. That's how people got into trouble the last go-round: they stayed too long, keeping their heads in the sand. If you want something south of the equator, try Australia. Otherwise, I suggest the US. Despite what many like to predict, short of things going full apocalypse, the US (and those countries in its "friends and family plan") is likely to be the global liferaft in the years to come. Being an optimist I very much hope things won't get that bad.

**s/v Jedi** · 08-03-2022, 22:18

Hahaha, I can’t tell if these are trolling or clueless

cal40john · 08-03-2022, 22:34

Make sure you don't lose/throw out your hard drive with your wallet or forget your password.

A report by The New York Times shows that approximately $140 billion in Bitcoin has not been claimed by owners who forgot their keys.

https://interestingengineering.com/1...4280%20million.

El Pinguino · 08-03-2022, 23:14

I was planning on putting my money into tulip futures but the situation in the Ecuadorian cut flower business makes me wonder about the wisdom of that idea.
'Flower growers say they are owed at least $40 million for Women’s Day deliveries ( to Russia) made before the invasion.
https://cuencahighlife.com/premium-g...s-wreak-havoc/

valhalla360 · 08-03-2022, 23:25

Quote:

Originally Posted by s/v Jedi

It is astonishing how many comment on crypto negatively without even knowing how crypto and the blockchain works.

No, crypto can not be hacked; wallets kept on the Internet can be hacked. If you are serious you keep a cold wallet or better a hardware wallet and your currency is perfectly safe. You can still loose it just like a real wallet.

The weakness is the exchange between fiat- and crypto-currency because that is where governments can still control the process.

I would never hold crypto that is linked to a fiat currency: it erases the #1 advantage of crypto imho.

If you are an internet security expert...true, you can take a lot of time and effort to secure it and provide backup methods, so it isn't lost.

If it's grandma who's been going a bit senile...keep it in the bank. It may not be perfect but it's night and day more secure.

valhalla360 · 08-03-2022, 23:26

Quote:

Originally Posted by El Pinguino

Another way of shifting wealth is the humble postage stamp.

Not much of an option from Germany to South America but probably still valid from say Russia to the UK.

During the apartheid days in South Africa they had quite strict export controls on money.
Easy fix, invest your Rand in half a dozen valuable stamps, take them to London and sell them through a philatelic auction house.
https://financebriefly.com/most-valu...africa-stamps/
So you make a nominal loss on your purchase price but you now have £UK.

I'm betting the auction houses report large sales to the govt...expect to get a visit asking why you didn't report the transfer in excess of $10k when you arrived in the country (and yes, they understand exactly what you are trying to do).