Reasonably safe Crypto funds when traveling.

[Franziska]

Originally Posted by Chotu

I think what a lot of people are missing here is that a crypto wallet is equivalent to a bank account.

The transactions are reported when you convert it back to Cash. Everything is accounted for. You are not taking anything across any border when you move across the border and have a crypto wallet.

If you did, you could never go anywhere.

Say you have a coin base Coinbase in Estonia as mentioned earlier in the thread. Traveling To the United States from Germany doesn’t move your money anywhere. That’s ridiculous.

Actually Chotu, if it's on a hardware wallet it's not in the account in Estonia anymore.
It's stored highly encrypted on the wallet key.
Which is besides the general higher security, currently the main secondary reason to have it on the hardware wallet.
If exchanges and banks were to fail in EU, you can still exchange in places with intact infrastructure elsewhere.
So probably one should ideally declare it, if one has the appropriate paperwork to proof that is legitimate funds.

[Franziska]

Originally Posted by redneckrob

Let's at least commit to being intellectually honest here Jedi. You fully realize that BTC has gone down more than 40% at times in just the last 6 months. You fully realize that if you made money on a BTC purchase with respect to the Euro, it was purely luck based on when you purchased the BTC and you could just as easily been down 40% at one point if you'd purchased at a different time. You know that someone could say the same about buying options on GameStop, which says nothing about GameStop's suitability as a currency! I know you understand that your increased BTC value in this case had absolutely nothing to do with the low single digit annual inflation rate of the Euro as you're stating here. Come on Jedi, you know better and you're better than this. Going back to the OP's question, anything that fluctuates randomly by 40% over the course of a few months is completely unsuitable for the purpose the OP originally purported to be seeking, you know this as well.

I would also point out that if your overlying assumption is correct, that BTC will do the opposite of normal currency and continuously increase in value, it would create havoc if it became widely used in commerce. If you're a consumer it's easy to only see the world from a consumer's perspective, but as a business owner I see both sides of it. Say, for example, I use aluminum to make boat hulls. Today I buy 20 tons of aluminum for 1 BTC, and after I run that aluminum through my machines to turn it into hulls I can sell them for 10% more than I paid for the aluminum which covers my cost of production. So my factory does it's job and produces the frames and I go to sell them, only to find that BTC has appreciated by 10%. From your limited perspective, Yay! From my perspective, I can now sell my finished product for 1 BTC, making 0 gross and a significant net loss when you consider all my costs. This fundamental problem can be somewhat mitigated by big companies by forwards and hedging, but for commerce in general it's deadly for any business that has to buy raw material and sell a finished product later. Not to mention anyone trying to lend money. And speaking of loans, if BTC is supposedly long-term trending up in value, why are people getting eye popping interest rates for lending their BTC?

Not for nothing the last time we saw prolonged appreciation of currency over time we called it the Great Depression.

Stablecoins don't fluctuate more than the fiat they are associated with. That's the whole point of them.

They are only interesting if you want to reinvest into Crypto after a while. Say you buy and sell Ether for 20000€ you pay a fee of approx. 200€ each time you convert or sell/buy to Fiat.
If you instead turn it into USDC you pay only a few bucks per transaction.
No need to have your money on an account with Coinbase then. Transfer it to your hardware wallet and take it with you.
If the Russians go after Estonia you can still convert it to fiat anywhere else with working infrastructure.
From a European perspective the other advantage is its tied to the $ if it comes to an expanded war in Europe, the € may suffer. The $ probably less so.

[s/v Jedi]

Originally Posted by goboatingnow

Actually there are stacks of countries with extensive money laundering legislation, where transactions over certain limits have to reported on etc or specific procedures must be followed

It’s not simply as saying you’re a “ free man “ , what ever that statement actually means.

And yes if you don’t comply with those requirements you are a criminal

This also includes holding undeclared income abroad etc.

I am sure there are countries who do that.

[s/v Jedi]

Originally Posted by valhalla360

If you run it thru the banking system, it's fully reported and legal.

If you take a suitcase full of $100 bills but report it at customs & immigration (both leaving and entering), it's fully reported and legal (though you may be asked to do some explaining as to why you are doing it in cash).

If you sneak it across the border, it's illegal. Sneaking it may be hiding plastic wrapped bundles of $100 bills in the bilge or it could be using crypto to try and pass it across the border without the authorities finding out.

$500 does not carry a requirement to report it, so not relevant to the discussion. (though technically, if you are doing it as part of tax fraud it would be illegal...just unlikely for most to bother committing tax fraud over such small amounts).

They have this all sorted, you aren't tricking anyone.

Hold on, I never said smuggling cash is legal! I reacted to statements that online banking is illegal outside your own country and owning bitcoin while traveling abroad is illegal.

[s/v Jedi]

Originally Posted by redneckrob

Let's at least commit to being intellectually honest here Jedi. You fully realize that BTC has gone down more than 40% at times in just the last 6 months. You fully realize that if you made money on a BTC purchase with respect to the Euro, it was purely luck based on when you purchased the BTC and you could just as easily been down 40% at one point if you'd purchased at a different time. You know that someone could say the same about buying options on GameStop, which says nothing about GameStop's suitability as a currency! I know you understand that your increased BTC value in this case had absolutely nothing to do with the low single digit annual inflation rate of the Euro as you're stating here. Come on Jedi, you know better and you're better than this. Going back to the OP's question, anything that fluctuates randomly by 40% over the course of a few months is completely unsuitable for the purpose the OP originally purported to be seeking, you know this as well.

I would also point out that if your overlying assumption is correct, that BTC will do the opposite of normal currency and continuously increase in value, it would create havoc if it became widely used in commerce. If you're a consumer it's easy to only see the world from a consumer's perspective, but as a business owner I see both sides of it. Say, for example, I use aluminum to make boat hulls. Today I buy 20 tons of aluminum for 1 BTC, and after I run that aluminum through my machines to turn it into hulls I can sell them for 10% more than I paid for the aluminum which covers my cost of production. So my factory does it's job and produces the frames and I go to sell them, only to find that BTC has appreciated by 10%. From your limited perspective, Yay! From my perspective, I can now sell my finished product for 1 BTC, making 0 gross and a significant net loss when you consider all my costs. This fundamental problem can be somewhat mitigated by big companies by forwards and hedging, but for commerce in general it's deadly for any business that has to buy raw material and sell a finished product later. Not to mention anyone trying to lend money. And speaking of loans, if BTC is supposedly long-term trending up in value, why are people getting eye popping interest rates for lending their BTC?

Not for nothing the last time we saw prolonged appreciation of currency over time we called it the Great Depression.

No, no, no, no. You don’t get it. You are talking about making money but I am not. I never made money with a BTC purchase. I preserved wealth.

Fluctuations of 40% you mention: that is called volatility and it is measured against something else, like USD. When that fluctuates, it might be due to the change in value of BTC or it might be due to the change in value of USD, or both. This is how it works.

Your examples about aluminum: when you buy $100 worth of aluminum today, you get less aluminum than 10 years ago. Has the price of aluminum gone up? Yes it did. Did the value go up? No, it didn’t. The price increase is the result of devaluation of the USD. It devalues because they print more of it without anything to back that up.

When BTC replaces fiat currency, you buy aluminum for 1 BTC, build a hull for that and sell it for 1.5 BTC or whatever profit margin you have. The example you give is for buying, manufacturing and selling in different currencies where you have currency risk. When I did that and was worried, I could buy insurance to cover that. Normally when you buy a large amount of materials you cover that by insurance or sell/buy options to cover the risk.

Even in your example, where you end up with 1 BTC where you claim to have no profit: that is incorrect because that 1 BTC you got is worth 10% more thanthe one you used to buy the aluminum. So it will buy you 22 tons of aluminum instead of 20 tons.

[Franziska]

Originally Posted by s/v Jedi

Hold on, I never said smuggling cash is legal! I reacted to statements that online banking is illegal outside your own country and owning bitcoin while traveling abroad is illegal.

Correct, and I think we should not forget that many people investing in crypto are aware of the overall increased risks but also chances when compared to classic investments.

Secondly it is just a way to broad assumption that crypto is only used by fraudsters and criminals.
The majority is trying do invest into in the same legal manner as they do with other investments.

[s/v Jedi]

Originally Posted by Franziska

Actually Chotu, if it's on a hardware wallet it's not in the account in Estonia anymore.
It's stored highly encrypted on the wallet key.
Which is besides the general higher security, currently the main secondary reason to have it on the hardware wallet.
If exchanges and banks were to fail in EU, you can still exchange in places with intact infrastructure elsewhere.
So probably one should ideally declare it, if one has the appropriate paperwork to proof that is legitimate funds.

Sorry to be the one countering everyone but this is not how it works. The hardware wallet does not hold any currency. I know it’s confusing because they call it a wallet… think of it like a wallet that you keep bank cards and credit cards in: there is no currency in that wallet either and you don’t have to report the limit of a credit card to customs officers.

A hardware wallet is a little machine that is able to generate keys which you can use to transfer crypto currency that you possess. The crypto currency doesn’t exist in the real world, it’s virtual which means you can not transport it on your person. It exists in the public ledger, which is virtual as well and of which thousands of copies are spread over the world’s computers.

[Franziska]

Originally Posted by s/v Jedi

Sorry to be the one countering everyone but this is not how it works. The hardware wallet does not hold any currency. I know it’s confusing because they call it a wallet… think of it like a wallet that you keep bank cards and credit cards in: there is no currency in that wallet either and you don’t have to report the limit of a credit card to customs officers.



A hardware wallet is a little machine that is able to generate keys which you can use to transfer crypto currency that you possess. The crypto currency doesn’t exist in the real world, it’s virtual which means you can not transport it on your person. It exists in the public ledger, which is virtual as well and of which thousands of copies are spread over the world’s computers.

Absolutely correct. Thank you for correcting me.
WhaI was trying to say is neither is it with the bank which may be affected by a war than.

[letsgetsailing3]

Originally Posted by s/v Jedi

Hold on, I never said smuggling cash is legal! I reacted to statements that online banking is illegal outside your own country and owning bitcoin while traveling abroad is illegal.

I don't believe anyone said any of that.

[s/v Jedi]

Originally Posted by letsgetsailing3

I don't believe anyone said any of that.

I don’t believe anyone said anything about wrapping cash in plastic and smuggling it in the bilge.

I’m sure you didn’t say online banking or doing crypto payments while abroad is illegal, but I’m pretty sure someone did

[s/v Jedi]

Originally Posted by Franziska

Absolutely correct. Thank you for correcting me.
WhaI was trying to say is neither is it with the bank which may be affected by a war than.

Exactly. For preserving wealth, take these steps:

1. Buy a hardware wallet and setup an account with an exchange that is certified and legal in your country. Now do all the paperwork and tests needed to exchange fiat currency from your bank account into crypto currency.

2. Transfer the crypto straight to the hardware wallet. I know the Ledger Nano X can do that and assume others can do this as well. If not and you end up with crypto in an exchange wallet or a wallet app on a phone etc. then immediately transfer the crypto to the hardware wallet.

3. be sure to make several copies of your “secret words” and put them in safe places. I would not trust myself just memorizing them.

4. use crypto that is established like ETH and BTC.

Remember that experts recommend to only keep 5% of your wealth in crypto with another 5% in precious metals. Compare that to 20% in real estate, 40% in stock, 20% in bonds and another 10% in commodities (BTC and precious metals are in the 20% commodities chunk of assets).
For more info on wealth preservation, read a book like “The Ivy Portfolio”.

All the hacks, thefts, scams etc. are around crypto wallets that are accessible via the Internet.

[atoll]

How will crypto work if undersea cables are cut,and satellite systems start getting targeted?

[s/v Jedi]

Originally Posted by atoll

How will crypto work if undersea cables are cut,and satellite systems start getting targeted?

You need Internet access. As long as (part of) the Internet works, crypto currency works.

If the Internet is taken down, your bank is as useless as your crypto. This is why precious metals are as essential as crypto.

[Shanachie]

One concept that people have difficulty understanding is that crypto is not a currency. It's more like a share of stock.


With a currency like the U.S. dollar, the government guarantees its value through the actions of the Federal Reserve. A crypto coin has no value and no government standing behind it to ensure its value.



It's only worth what someone will pay you for it.


This matters because there is a relatively small amount of crypto being bought and sold every day. Sure, the overall numbers look impressive. But people usually buy and hold it, hoping it will go up in value.



So some early buyer of crypto may think he/she has a billion dollars worth of coin. But, if he/she tries to sell all of it at once, those coins will quickly overwhelm the market and drive down the value because the number of buyers is never large.



That billion dollars may end up as $500 million, $10 million or even nothing, if people lose total faith in crypto.


The big drops in crypto prices come as large holders try to dump as much of their holdings as they can while retaining most of its value.The big jumps come as people believe, for one reason or another, that the number of buyers is increasing.


As I said in an earlier post, it's a type of gambling, not informed investing. Not much different from pushing a stack of coins onto the blackjack table.



The financial press is full of touts trying to get you to invest your money here and there so that they can drive up the price of stocks, bonds, REITs and whatever.


The crypto touts are trying to enlarge the market for coins by pushing the recommendation that everyone needs to put 5 percent of their net worth into that market.

[redneckrob]

Originally Posted by s/v Jedi

No, no, no, no. You don’t get it. You are talking about making money but I am not. I never made money with a BTC purchase. I preserved wealth.

Fluctuations of 40% you mention: that is called volatility and it is measured against something else, like USD. When that fluctuates, it might be due to the change in value of BTC or it might be due to the change in value of USD, or both. This is how it works.

Your examples about aluminum: when you buy $100 worth of aluminum today, you get less aluminum than 10 years ago. Has the price of aluminum gone up? Yes it did. Did the value go up? No, it didn’t. The price increase is the result of devaluation of the USD. It devalues because they print more of it without anything to back that up.

When BTC replaces fiat currency, you buy aluminum for 1 BTC, build a hull for that and sell it for 1.5 BTC or whatever profit margin you have. The example you give is for buying, manufacturing and selling in different currencies where you have currency risk. When I did that and was worried, I could buy insurance to cover that. Normally when you buy a large amount of materials you cover that by insurance or sell/buy options to cover the risk.

Even in your example, where you end up with 1 BTC where you claim to have no profit: that is incorrect because that 1 BTC you got is worth 10% more thanthe one you used to buy the aluminum. So it will buy you 22 tons of aluminum instead of 20 tons.

Again, we need to commit to intellectual honesty here. You asserted that you bought BTC and it went up with respect to the Euro and presented that as evidence that BTC is a deflating currency (going up in purchasing power over time). That is false, and you're well aware that it is false. Your experience was proof only that you by random chance benefited from the volatility of BTC while anyone else could just as easily bought BTC and had it go down during a period of time relative to the Euro. Again, you know better.

Believe me, I know what volatility is and I also understand relative purchasing power and assume you do as well. Your argument that BTC's volatility is due to fluctuation in purchasing power of the USD is absurd, as you again well know. Sure, purchasing power of the USD might deflate 5% in a year. BTC is fluctuating 40% in a months! And what's worse, BTC is exhibiting random volatility, while inflation goes in one direction in a far more predictable manner. The bottom line is that BTC's idiosyncratic volatility is massive and makes is wholly unsuitable for the purpose the OP asked about, no amount of hand waving changes that.

It's interesting that you ignored the entire problem of lending with deflating currencies, and the current BTC lending interest rates clearly showing it as an inflating currency. Kind of a massive elephant in the macro-economics room. It ties right into the problem of anyone who makes anything with raw products priced in a deflating currency. Again, as one of the things the Great Depression showed us, it's very tough to make economies work with that setup. Any macro research or personal business experience you have to the contrary I'd love to hear about.