Anyone Into Crypto?

[Pivot]

Number of governments are planning to issue crypto currency. That in my limited knowledge is more scary than unregulated crypto.
Imagine (any) govt managing your e-wallet.

[New User]

Access to your bank account doesn't work when the internet is down. In fact, many things don't work when there is no internet.
If you recall the Northern Bank collapse, you'll remember the huge queues that formed as people rushed to take their savings out.

With regard to Interest, do you mean as in earning interest on your Bitcoin holding?
If so, yes it does, I currently earn 3.6% on my Bitcoin.

Point me to a bank that will pay that.
Presumably, shares are a gamble, as the collapse of a company will result in the loss of capital.

I get the points that you make but you risk comparing apples with oranges.

UK Banks and Listed Companies are regulated so there is less risk and potentially less reward as this regulatory environment has to be financed. Compare Northern Rock outcome for customers with the Icelandic banks that offered 8% interest but collapsed leaving people with pennies. Same goes for your 3.6% Bitcoin interest. And equally there is a fee to be paid to move sterling to bitcoin and back again so that needs to be factored in as well as the currency volatility. Have you ever asked yourself in the big scheme of things why the cryptocurrency is offering interest and who is paying for you to have this incentive when inherently there is no interest generated in the bitcoin token itself?

Shares are a gamble if you buy shares that are not listed on regulated exchanges. In essence the share price is just the NPV of the future dividend stream adjusted for risk. The more you know about the company or its markets the better position you are in to decide if the market is over or underpricing that risk in the share price.

Start ups or even large tech companies with no dividend stream have to resort to creative alternative valuations. You may believe or disbelieve the calculations they use and factor them into your risk calculations but I wouldn't call buying shares in publicly listed companies on regulated exchanges a gamble.

Disclaimer: I do hold a small amount of bitcoin but it is out of curiosity rather than anything else.

[Deleted User 4325]

Bazza, money and crypto are not the same thing. You may have bought crypto somehow and I would imagine quite easily as that is what the crypto inventors want but there is no reason for the banks to want to let you cash them in necessarily as there is no guarantee in their value unless maybe you happen to live in El Salvador!!!!

You spend, excuse the pun, all day on this but ultimately it is gambling and very risky for the many millions who have and who will lose real money on them.

Very handy for shifting dodgy gear, drug deals, guns etc as if you can as it untraceable!!!!!!

Hand on head emoji!!!!!!

[martinto8]

Bazza, money and crypto are not the same thing. You may have bought crypto somehow and I would imagine quite easily as that is what the crypto inventors want but there is no reason for the banks to want to let you cash them in necessarily as there is no guarantee in their value unless maybe you happen to live in El Salvador!!!!

You spend, excuse the pun, all day on this but ultimately it is gambling and very risky for the many millions who have and who will lose real money on them.

Very handy for shifting dodgy gear, drug deals, guns etc as if you can as it untraceable!!!!!!

Hand on head emoji!!!!!!

I would argue money (fiat currency) and Crypto(currency) are the same thing. It is a disposable asset

As if banks haven't been handy enough for shifting dodgy gear/money without it being untraceable way before Crypto time

Any money you put towards an asset physical or not with a view to it returning a profit is arguably gambling because there is no guarantee of a return. At the end of the day it is a zero sum game, where one gains someone loses. Most will probably be more familiar with doing due diligence on buying shares for a company but not a crypto asset. Risk management is everything

[Bazza06]

Number of governments are planning to issue crypto currency. That in my limited knowledge is more scary than unregulated crypto.
Imagine (any) govt managing your e-wallet.

Yes, CBDC's (Central Bank Digital Currencies) are not something to be welcomed.

[martinto8]

Number of governments are planning to issue crypto currency. That in my limited knowledge is more scary than unregulated crypto.
Imagine (any) govt managing your e-wallet.

Yes, CBDC's (Central Bank Digital Currencies) are not something to be welcomed.

Soon everyone will have crypto in the form of 'Britcoin'

[Bazza06]

Bazza, money and crypto are not the same thing. You may have bought crypto somehow and I would imagine quite easily as that is what the crypto inventors want but there is no reason for the banks to want to let you cash them in necessarily as there is no guarantee in their value unless maybe you happen to live in El Salvador!!!!

You spend, excuse the pun, all day on this but ultimately it is gambling and very risky for the many millions who have and who will lose real money on them.

Very handy for shifting dodgy gear, drug deals, guns etc as if you can as it untraceable!!!!!!

Hand on head emoji!!!!!!

I don't agree with your view that it is untraceable, not completely.
KYC is now becoming common in order to open an account, and to extract the money, you need an account if you are going to realize cash.

The transactions in the middle can be publicly viewed, but these are in the form of a hash key (https://etherscan.io/txs)
It is possible to follow a transaction and if you know who is an owner of the key is, the coins they are moving.

There is no doubt criminals use crypto, but they use the banking network, businesses and property far more to launder their gains.
There are several recent cases where transactions have been identified and linked to criminal activity and blocked.

It is not in the interest of the exchanges to openly permit these or to block law enforcement from investigating.

I disagree it is gambling, although it is for the ill-informed who are following their celebrity idols into buying into some worthless project which they are being paid to shill.
Also, for those who trade, and with leverage, the outcome is going to be bad.

I'm not a trader and would never encourage anyone to do so, whether it is crypto, forex, currencies etc. The markets are controlled and manipulated, and the little man will not win.

I'm not here to convince you or anyone else, but I was interested to hear the viewpoints of others.

I absolutely agree with all comments regarding volatility and risk and I would expect that many, if not all, of the smaller cap cryptos will eventually go to zero.
It is early days and there is some incredible technology being built.

[Miopyk]

Can someone explain how a crypto currency is able to generate a profit? What exactly is it invested in, how does it increase in value, who exactly controls them and how do hold them to account when things go wrong? I think I know the answers but would be interested to see if anyone else can tell me something I don't know.

[Bazza06]

Can someone explain how a crypto currency is able to generate a profit? What exactly is it invested in, how does it increase in value, who exactly controls them and how do hold them to account when things go wrong? I think I know the answers but would be interested to see if anyone else can tell me something I don't know.

Very simply, just like buying shares, if the value of the share/crypto increases from the price you bought at, you will see a gain in your original investment.
Equally, if the price goes down, your original investment decreases.

Profit or losses are only realized when you sell.

You buy crypto through an exchange, similar to how you would buy a share through a broker.
The most common exchange is Coinbase which is a public listed company.
Their platform is easy to use, but their fees are amongst the highest.

It's a good starting point, though.

I use Binance, but you can no longer deposit funds from most UK banks. There are ways around it, but it's not for the beginner (neither is it illegal!).

Coinbase has its own insurance in the event something goes wrong. However, I am not au fait with the extent of this. I would imagine it is protection in the event they are hacked.
Similar to if a bank experienced similar and your funds were affected.

However, as with your bank details, passwords etc. you are responsible for keeping these secure.

In terms of controls, this depends on how and where you store the crypto you buy.
Some people keep it on the exchange, which is convenient to access but less secure if the exchange was hacked.
Others use "cold storage" in the form of a secure device such as Ledger (www.ledger.com). They transfer their crypto from the exchange to the Ledger device and keep it in a secure location of their choice.

These devices have a passphrase comprising a number of words that enable you to access your crypto should you lose or damage it.
However, anyone obtaining access to the passphrase can also gain access, hence the importance of keeping it secure.

YouTube is a hive of information for understanding crypto but beware of the many "influencers" promoting the next 10X, 50X, 100X wonder coin.
Just like the many forums of individuals promoting a small cap company that's going to be the next Apple, Amazon etc. they also exist in crypto.

The best channel for informative, balanced and educated content is the Coin Bureau (https://www.youtube.com/c/CoinBureau/videos)
His introductions as to how he is not a financial advisor have become legendary.

No one should invest in crypto without understanding the risks and volatility.

[Guy]

When there is no Internet at Tescos and my nfc and credit cards don't work I get out my warm leather wallet and hand over metal and plastic money. If my wallet is empty I write on a piece of paper that my bank will pay them later.

Generally if the network goes down at a supermarket, the tills close and all sales stop, regardless of your payment method. It's quite frustrating!