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Tom Dyson’s “Bit Shares” that turned every $100 into $1,400

What digital currency is Teeka Tiwari talking up?

By Travis Johnson, Stock Gumshoe, March 29, 2017

The first version of this story was published on July 28, 2016 under the headline Palm Beach: “Issuing a strong ‘buy’ recommendation for ‘the next Bitcoin.'”
Tom Dyson, Teeka Tiwari’s publisher at Palm Beach, has a new pitch out for these cryptocurrencies, which he calls “Bit Shares,” again touting Ethereum and Bitcoin but also adding a couple others to the mix. Bitcoin and Ethereum are what he calls “Bit Shares Opportunity 1 and 2”, but they have also added some of the smaller cryptocurrencies to the pitch in this latest version.

What follows is my piece digging into Teeka Tiwari’s “next bitcoin” ad that was hinting about Ethereum last Summer, and at the end I’ll check back in with a quick update, and we’ll see if we can ID those other two cryptocurrencies.

–From 7/28/16–

I can’t help it, my first reaction when folks talk to me about alternative currencies and digital currencies is, “boy, that’s stupid. What’s the point?”

But I’m trying to be open minded, and I’m willing to learn.

My base assumption when it comes to privately created currencies like Bitcoin, which is the most famous one to date, is that the technology may be valuable but there’s no particular reason to place a specific dollar amount on the value of each digital piece of the currency. The value is in the ability to transfer money from one person or entity to another safely and quickly, but I think there is very little chance that governments around the world will cede control to a blockchain and allow it to be legal tender, or that it will supplant precious metals as a permanent “store of value.”

I’d say bitcoin has been a disappointment in terms of how much real world use it has gotten (as in people actually using bitcoin, not just trading it back and forth because they’re convinced that their local currency is being debased or because they smell a speculative opportunity), and I expect that will continue …

… but perhaps we’ll get to the point (and banks are genuinely researching and testing blockchain technologies) where the ideas behind bitcoin are a key part of the financial system. It’s just that I think we’ll still convert every dollar to bitcoin before it enters that blockchain, then convert it back to dollars as it leaves, all within a few moments — bitcoin makes sense to me as a transfer technology, but not as something you use to sock away your savings in a bitcoin wallet.

Which isn’t to say I’m unwilling to test it out. I speculate on lots of dumb things (in fact, my last “Idea of the Month” piece for the irregulars was all about dumb and speculative things I’m trying with small amounts of capital), and I have a small amount of bitcoin that I bought when I was experimenting with it a couple years ago and seeing whether it would be of any help to me (or a help to my business, as an alternative to accepting credit cards).

I didn’t find it all that convenient or useful, but I’ve still got a bitcoin wallet with a small amount of bitcoin in it… and it’s a small enough amount that I don’t need the money to pay my bills, so I’m leaving it there as a reminder to keep half an eye on this digital currency stuff.

So… when Teeka Tiwari and the folks at Palm Beach Letter started teasing that they were issuing a “strong buy” on a digital currency that they call “the next bitcoin,” I thought I should check it out. The push Tiwari is making is in ads for his Mega Trends Investing newsletter… and thankfully, he does point this out as being a high-risk investment in the ad — he implies that it could reach the heights that bitcoin did a couple years ago, when the early adopters who bought bitcoin on a lark were suddenly turning their $100 bitcoin investment into enough money to buy a Porsche, but he does note that the downside potential is 100%, so we’ll give him credit for that:

“Now, of course, the key here is position size.

“Don’t bet the farm.

“That way, you only have a small loss if you’re wrong. But you get lottery-like returns if you’re right.”

There has only ever been one digital currency that reached substantial scale before, and that generated great returns for a lot of early adopters, so it’s not necessarily true that the only two possible outcomes are “zero” or “lottery-like returns”… we really have no idea.

We’re conditioned to use comparisons because that’s the best way to justify a stock’s valuation (as, today, I looked at the difference in valuation between Facebook and Google to see what I thought made more sense), because the stock market has lots of liquidity and lots of analyst brainpower being thrown at it every day and “Mr. Market” generally wants similar companies to be assessed using the same metrics. It’s logical.

But if you’re taking one new digital currency and comparing it only to the one digital currency that has been a success (and ignoring the hundreds of others that were complete flops) you’re setting yourself up for a very biased mindset. Given the compressed timelines of modern life, you could argue that this is more like looking at the first US stock offering (the Bank of North America, in the late 18th century) and saying it would certainly be a hit and spike in value because the Dutch East India Company had been a huge hit and caused a huge bubble when it was the world’s first IPO in 17th century Holland.

Maybe that’s a reasonable mindset, since it’s probably true that this new currency is the first one to have pretty widespread adoption in the years bitcoin was introduced… but maybe not. These are uncharted waters, and there should probably be a little sign in scrolly script that says “here be monsters.” That “maybe you’ll lose it all” note should be taken more seriously than the “lottery ticket” bit.

But where’s the fun in that?

So, with all that disclaimer and dissuasion up front, what is it that Teeka Tiwari is actually talking about?

Here’s a bit from the ad:

“Will ‘The Next Bitcoin’ Make You Rich?

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“BRIEF: In 2013, Bitcoin made headlines as it went from $13 to $1,147 (an extraordinary 8,526% gain). Now, a former Bitcoin developer has started a rival currency that’s gone up 1,000% this year. Already, Microsoft, IBM, and 11 banks (including Wells Fargo) have tested it. ‘A new virtual gold rush is underway,’ reports the New York Times….

“Vitalik Buterin, a Canadian programmer now living in Switzerland, has just developed a secret ‘currency alternative’ that could let early investors turn every $200 placement into a rare, once-in-a-lifetime return of $6,850.”

This is, as you can certainly find with any Google search, a reference to Ethereum, a relatively new digital currency project (that’s a simplification, Buterin wouldn’t refer to it as a “currency”). The currency enabled by the Ethereum project is commonly called Ether, and yes, you can buy “1 ether” for about $12-13 these days. [update: the price spiked starting in February, it’s more like $50 now]

Tiwari’s argument is that there are three triggers that could “ignite the next bitcoin” like he says the Cyprus crisis ignited the bitcoin explosion. Those are, as he describes them, the “war on cash” with governments trying to do away with large cash transactions and large denomination bills; the move to negative interest rates; and the movement of either of those trends to the United States, which has so far resisted negative interest rates or penalties for holding or using cash.

Here’s one final bit from the ad (you can see the whole ad here if you want more):

“On March 30th, Microsoft made a huge announcement—They will soon let over 3 million of their developers work on “the next Bitcoin” through their Windows platform.

“This is massive!

“By one measure, that’s over 19 times the developers working on Bitcoin.

“As one ‘next Bitcoin’ enthusiast noted, it’s like ‘Bitcoin on steroids.’

“And as another noted, ‘I am beginning to doubt how bitcoin will manage to stay ahead.’

“So here’s what you need to do:

“I’m issuing a strong ‘buy’ recommendation for ‘the next Bitcoin.'”

Ether has not been around as long as bitcoin, but it is more flexible than bitcoin — and it has also been subject to what seems to have been a nasty split. Following some sort of theft of ether that I don’t really understand last month there is now Ether, typically abbreviated ETH, which has been adjusted with what they call a “hard fork” in the programming to prevent whatever happened in that theft from happening again, and “Classic Ether” (ETC).

The best explanation of Ether that I’ve come across is from one of the folks at Coinbase, which is the company I have an account with for my “bitcoin wallet,” and there’s also a short video from Vitalik Buterin here explaining the ethereum platform. (There’s also an article here about the ether/ether classic split, though you can find a lot more about that in some web browsing if you’re interested, it’s been a wild month in the world of alternative currencies.)

So what’s going to happen with ethereum, or with the ether currency?

Damned if I know.

The Microsoft interest and support for the the ethereum platform is real, though still quite small in the context of Microsoft, and I don’t know what it might mean in the end. This is still a work in progress, and people are just beginning to build tools on the platform.

It sounds really cool and powerful, but I’m not at all capable of assessing what it might do in the years ahead. The value of the ether currency in US$ terms depends on whether people have confidence in it, and whether they get excited about it and buy it more quickly than people want to sell it. Bubbles can form in anything, and interest in alternative investments and alternative currencies can certainly fluctuate dramatically. And hackers are inexorably drawn to alternative currencies, as we’ve seen by losses and collapsed exchanges in the past with bitcoin.

I do think it’s interesting, and I’ve decided to do what I did with bitcoin — buy a little bit of it and see what happens, and try to understand it more fully by reading more.

And I do mean a little bit, like the amount I might spend on a good dinner out. Thankfully, I don’t have to learn some new system or create a new account or get more involved just to get a basic transaction and start to understand it, because my Coinbase account supports both bitcoin and ether. So… now I’ve got a little bit of ether in my back pocket. And hopefully I’ll learn more. I am not counting on it creating a lottery win for me (in the ways that count, I’ve already won the lottery several times in my life), but I won’t object if I make some money from it.

That’s about all I can tell you — Ether is being promoted as a next-generation bitcoin, and ethereum as a platform is being examined by banks and financial folks just the way they’ve been looking at the bitcoin blockchain technology (you can’t “buy” into ethereum more broadly, from what I can tell, and there isn’t a stock or a for-profit enterprise in charge, it was crowdfunded and is collaborative). There’s been some discussion of Ether by readers here at Stock Gumshoe, both in relation to this ad and as a “what’s going on” query following the heist last month, and I’m sure plenty of readers know more about than I do — if so, I hope you’ll chime in below with a comment.

I don’t know if we’ll have a huge surge and an ether bubble, or if there will be another thousand alternative currencies and something better and cooler will come along that gets everyone excited… and if you think the dollar or the financial system will collapse, I’d feel a lot better about holding some gold and silver coins than I would about relying on a particular digital currency. But the blockchain idea seems here to stay, and more powerful than we yet understand when it comes to bringing security and speed to all kinds of computer communication, and I like what I read about ethereum more than I liked what I read about bitcoin a few years ago (even if I probably don’t really understand either)… it should be interesting.

–Back to the Present now, March 29, 2017–

It turns out that Tiwari’s recommendation of Ethereum last Summer was very well-timed — that cryptocurrency was still reeling a bit from concerns about a split into two different versions of the blockchain, and from a theft, but it has roughly quadrupled in value since. I did buy some at the time, and still own some, so I’ve made some money on that and I’ll keep holding to see what happens.

But most of that spike happened over just the past month or so, perhaps caused by concern about bitcoin. One “story” that makes some logical sense is that the most ardent speculators and traders, the folks who fuel all of these alt-currencies, started to “give up” on bitcoin and moved on to the next thing after the hoped-for spike on ETF approval was quashed, and ethereum is the only real cryptocurrency that’s “grown up” to some extent, with institutional investment and connections and a relatively large “market cap” compared to the other non-bitcoin cryptocurrencies, so much of the money fleeing bitcoin perhaps fled into ethereum. I don’t suppose there’s one certain answer, but that makes as much sense as anything else.

How about the other two “Bit Shares” cryptocurrencies they pitch? We get a few limited clues, so we can at least task the Thinkolator with doing some guessing. Here’s what we hear this time out:

“‘Bit Shares’ Opportunity #3:

“Recently, Teeka sat down with one of the wealthiest and most successful investors in the cryptocurrency space. This guy was one of the earliest investors in bitcoin and several other larger cryptos, and has generated an 8-figure fortune as a result.

“He has a great track record investing in cryptos… which is important, because he told Teeka about a move he just made into a currency that solves a couple of bitcoin’s biggest problems.”

That person being alluded to is Roger Ver, an early bitcoin enthusiast who made a boatload of money and became a bitcoin VC investor and evangelist (Tiwari referred to him as “Bitcoin Jesus” in some older articles), and because of Ver’s publicized opinions and some reading between the lines I’d guess that this is a reference to Dash, the cryptocurrency that used to be called DarkCoin and that has been going bonkers of late (it seems like all of the cryptocurrencies have been going nutty in the Trump/Brexit/WTF-is-going-to-happen-next era).

Dash is very, very small compared to Ethereum (which itself is less than a quarter the size of bitcoin), but it is the third largest cryptocurrency according to CoinCap, and it does solve some of the problems that have afflicted bitcoin lately — particularly the slow transaction speed that Ver and many others have complained about. It also offers, they say, more privacy than bitcoin. You can learn more about Dash from their website here, I’ve not ever traded in this one and my Coinbase wallet can only transact in Bitcoin and Ethereum so I’ve not bothered to get an offline or other wallet or speculate on the littler players.

And the fourth one? Here are our clues:

“‘Bit Shares’ Opportunity #4:

“The 4th and final cryptocurrency in our report may have the most upside.

“Some cryptos, like this one, only exist to serve specific industries. In this case, it’s social media.

“The company behind this cryptocurrency is only a year old, but it’s already giving Facebook, Twitter and LinkedIn serious competition for social media traffic, according to Amazon’s web analytics division.

“What if you’d invested in a social media giant when it was still just a startup?

“PayPal founder Peter Thiel made 199,900% returns from his early investment in Facebook.”

This one, the Thinkolator is pretty sure, is Steem — and it is indeed pretty unique, as I understand it so far it’s essentially a social network (Steemit) where the compensation you receive for contributing your content is not in some ephemeral notion of social status, recognition, “likes” or even, for the power users, advertising dollars, but in units of the Steem currency that are allocated as rewards for the most popular posts and comments (or, as with other cryptocurrencies, for participating in the blockchain by joining the peer-to-peer network that verifies transactions). Steem’s website is here, the “social” part, Steemit, is here. And yes, it was launched just over a year ago, in January of 2016.

It looks pretty interesting as a concept, though I can’t say that the content was all that compelling at first glance (most of the popular posts seem to be self-referential commentary about what Steem is doing or the usual twaddle you’d get if you followed a bunch of people you don’t actually know or like on Facebook or Twitter), and it has been rising rapidly in value so it is now now of the top 20 cryptocurrencies, but with a total “market cap” (units of the currency that exist, multiplied by the current US$ price at which it’s being traded) of $36 million it’s still quite tiny — Dash is at just over $600 million, Ethereum approaches $5 billion, Bitcoin is almost $17 billion.

Neither the social network nor the currency are really established enough to judge at this point, so I guess the exciting thing is that you could jump in with both feet and potentially, if you can garner some fans and followers, become a big part of that little social world, and perhaps earn a decent amount of the Steem currency that might or might not be worth something in the real world in a week or a month or a year. If you’ve got a lot of time on your hands, well, it won’t cost you anything — unlike the other cryptocurrencies, this is one you can pretty easily try to earn without buying anything.

So those are the four, sez the Thinkolator: Bitcoin, Ethereum, Dash and Steem. I’ve got some of the first two, in a very tiny allocation, and don’t have enough interest to spend the time it would take to learn more about Dash and Steem and begin trading in those (or participating in the Steemit community). Maybe that will appeal to you, or maybe you’ll find appeal in one of the other hundreds of cryptocurrencies that have not captured the attention of speculators, certainly there’s a lot of excitement in the sector.

This is, indeed, still very much “Wild West” stuff when it comes to all cryptocurrencies, even bitcoin — some people buy them just because they exist, with hopes of catching the next wild run like bitcoin’s surge in the early days, and to some extent that becomes a self-fulfilling prophecy… cryptocurrencies in general offer the very purest form of momentum trading, as it plays out in the psychology of techie libertarians around the world.

There is, after all, nothing backing the value of a particular cryptocurrency except its popularity with other cryptocurrency holders and its own self-imposed scarcity. Scarcity isn’t enough to support a currency if the popularity part disappears, so it’s important to remember that all cryptocurrencies are ethereal — they do not carry even something as firm as the “full faith and credit” of a government as you’ll find with legal tender currencies, or a longstanding human tradition of value like you’ll find with silver and gold, they are just popular and scarce.

The value of the blockchain technology and its many interpretations and improvements and tweaks is real, but as I understand it that technology it is not owned by the holders of a cryptocurrency — holding bitcoin or ethereum because you’re convinced the blockchain will supplant current financial transaction technologies (or create something even better, like smart contracts that do away with the friction of so many transactions) is a bit like buying the raw materials used in making paper money in the 19th century because you thought it was clear that paper money was going to improve technologically and become the next big thing as the government cracked down on counterfeiting and consolidated the anarchy of private bank notes (let alone Confederate Dollars). Paper money did take off, and some companies did very well (like Crane up here in Massachusetts, which did develop anti-counterfeit fibers in the mid-19th century and grow to take most of the market for US currency paper), but that doesn’t necessarily mean that having exposure to linen, or cotton, or inks or printing presses, would have created windfalls for investors.

There’s a very real long-term risk to all of these altcoins that a government-approved and regulated blockchain, endorsed by big banks, would use the power of that technology in a way that makes the actual cryptocurrencies obsolete. The real value of cryptocurrencies, beyond the scarcity (which becomes irrelevant if the currency is unpopular) is in their ability to offer fast and secure transactions. If the technology can do that in US dollars or another major currency, and therefore help you get away from the currency risk of bitcoin or ethereum prices fluctuating, a lot of that hypothetical future promise of cryptocurrencies goes away.

The argument I’ve seen is that bitcoin (or ethereum, or whatever) will become dramatically more valuable because it will be in high demand as a transmission mechanism — and I still don’t find that argument compelling. There is a certain logic to that argument — that is what has supported the US$ to some degree over the past 40 years, the requirement that much of the world’s trade has to be converted into dollars before it can be used to buy oil from some of the major exporters, but that’s more important because those sellers of oil (or whatever) continue to hold the dollars rather than sell them, partly because they don’t want more buying pressure elevating their own currencies, and because dollars themselves were seen as safe and valuable and relatively stable. I don’t see that happening with an extra-governmental currency, and I think the idea of cryptocurrencies supplanting the fiat currencies of the world is a dream stoked by the libertarians who want government out of the money business, but that’s just my opinion.

And, as I noted, I do dabble a little bit in these — I wouldn’t ever hold on long enough to earn a 10,000% return on any meaningful investment, I’m too risk averse for that, but I do find the cryptocurrencies fascinating.

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maddogdne
July 28, 2016 11:30 pm

Arguably, the system evolving from the underlying principles that created Ethereum could morph into a fully-distributed, fully-encrypted, finally safe unhackable internet environment, which eliminates government control and creates enough power for big business to eventually fully trust the digital environment. Without ceding control to any oligarchy of major tech companies. So whether you actually spend any money on Ethereum right now, this will be a good time to start studying what these folks are creating, because it does indeed look like it’s a potential part of everyone’s future. And we all might end up in a better place, as a result. For the record, I don’t own any myself.

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waseem77
July 29, 2016 6:58 am
Reply to  maddogdne

In order to educate myself, I went looking for eth chart, and see price go from .89USD/ETH to $20/ETH in February 2016. This made me search for “ETH Pump and Dump”. Here is an interesting read.
https://bitcointalk.org/index.php?topic=1352790.0
Please let me know your opinions as I am neither an experienced investor, nor a digital currency expert.

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Olya
Irregular
March 29, 2017 8:11 pm

Travis, where does or will rank « bitgold» in this basket of exchanged currencies under more or less encrypted digital protocols?

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Jimbo
Guest
Jimbo
March 29, 2017 9:09 pm

Travis-I agree 100% If you want to invest in gold then buy gold. But buyer beware, when you invest in an ETF like GLD you are buying paper derivatives or futures. Many say gold is money, it has been for 5000 years. But you can’t buy anything with it at the grocery store. My advise is avoid the unproven crypto newcomers many are clever ponzi schemes and many have failed. I have an account with Coinbase, based in the US. They only sale BTC, ETH and Litecoin so I dabble with these only and will be leery of anything else.

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Mike
Guest
Mike
April 25, 2017 4:04 am
Reply to  Jimbo

yes you cant buy groceries at the store with gold, but if you sell it at market value the cash of its worth can be used at the store. just like a check you get at work you cant hand your payroll check to a store clerk but you can cash it and buy things with the cash.

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surefire423
Irregular
surefire423
April 1, 2017 12:18 pm

What do you think about India with it’s retinal scan, fingerprinting, money gathering exploits?

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takeprofits
Irregular
April 4, 2017 1:33 pm

I have strong reservations about all crypto-currencies for all the reasons Travis has outlined and his caution is well founded IMHO, but there is another alternative that I am investigating. Gold & Silver have a 5000 year history of being used as money because they hold all the key metrics needed for sound money, scarcity, intrinsic value recognized on a world wide basis, can’t be created out of thin air like fiat currencies, or manipulated at will by unscrupulous bankers or politicians,
The drawback is there has not been a mechanism for their use because of being displaced by “legal tender laws” and the inconvenience of weight and making change.

That problem has now been resolved by GOLD MONEY Stock Symbol XAU which for a very reasonable fee will store coins and bullion in private vaults outside the banking system and issue you a debit card that will allow you to spend your savings by converting purchases on a daily basis on the actual daily exchange rate between gold and dollars.

The BENEFIT, your savings gain growth at the rising trend rate of gold bullion while at the same time protecting you against the LOSS of purchasing power experienced with fiat currencies through inflation which is inevitable with a fractional reserve DEBT BASED currency creation system.
PROOF: A dollar was originally defined as so many grams of gold or silver which to-day will buy the same amount of goods and services they did 10,30 or a hundred years ago while a fiat dollar in contrast to-day has at most a comparative 3c in purchasing power, so it is a travesty of language to still call it a DOLLAR!

The key point is that interest is never created, so to keep an economy expanding, what compounds and EXPANDS is DEBT. making interest an illusion, it is mathematically impossible without an ever expanding pyramid of debt, of which only the bankers and their corporate cronies are the beneficiaries,
The people who PAY the rising interest costs are the average working tax paying average people and small business owners, in effect the middle class and that is WHY we have a shrinking middle class whose take home pay has not gone up in decades while all the “phony money” (fiat currency) has not revived the economy in general, it has just made the
already rich even richer. at the expense of the average
working class under this perverse system of debt financing.

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mhardin54
Irregular
mhardin54
May 3, 2017 8:40 pm
Reply to  takeprofits

proposed income tax law changes possible that will make interest on debt not deductible. Tax interest from savings at 1/2 the rate of other income. create dis-incentive for borrowing & incentive for savings & investment.

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Michael
Member
Michael
May 13, 2017 9:21 am
Reply to  takeprofits

, but I think that you might be missing one of the key benefits of a good digital coin ( token ) set up for use in a digital wallet and by the way they do have the capability of adding debt cards and more secure features than you can count under your control.
No Corporate or Government control as it decentralized!!!
I suggest reading the white paper or Reddit for Ethereum and Bitcoin to better understand the practicality of their use.
I just started studying and investing around Mid April and I think blockchain technology is one of the most exciting, disruptive techs in a very long time.

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archives2001
archives2001
September 1, 2017 5:06 am
Reply to  takeprofits

Sounds really sound Myron.. but,,(and it’s A BIG BUT(TE)..It ALL comes down to TRUST and credibility! ..Who’s that fox u’v appointed to guard your henhouse? We know what our govt did back in 1933 when FDR called in the gold.

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Jimbo
Guest
Jimbo
March 29, 2017 8:34 pm
Reply to  waseem77

Interesting comments with your link, however it mostly talks about the various scams involving crypto currencies. And there have been many and you need to avoid flushing your money down the scam toilet. Stick with exchanges like Coinbase that only sale the BIG one’s. Bitcoin is by far the largest with a market cap of like 4-5 billion dollars, ether is second with a cap of about 2 billion. These are the future of money. Know one wants cash anymore, everything is digital. Both solve this issue. The lion’s share of purchases come from China, second to none. With talk of a bitcoin fork China has been dumping and buying ether. This is why bitcoin is down 20-30% and ether going straight up to $50. Buy these on dips and scares, if bitcoin drops to say $700-800 buy, If ether drops below $40 BUY. Both will be worth sooo much more in a year or 2. I started buying ether a year ago for $9 and now it is worth over $40,000. With governments printing unlimited funds, you just can’t convince me keeping everything in a bank is the best idea.

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Roger Humbke
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Roger Humbke
July 29, 2016 4:58 am

Great write up on ether and ethereum. Timing seems to be everything in the financial world. Somedays I just read too many articles about the coming demise of fiat currencies and the banking system, I want to take 95% of my cash out of the bank to buy gold and silver to bury in the back yard. That line of thinking also has one thinking about moving to the bush and living off the grid.

If I had the money, I too would be buying a ranch in the mountains of Argentina! But my wife likes her relatives, friends and her life, and so do I.

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hendrixnuzzles
July 29, 2016 8:05 am

Checked out Coinbase but the “purchase Ether” function did not function.

Pretty amazing that people will consider giving money to a company that has
no published address, visible jurisdiction, or phone number.

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deboruth
April 20, 2017 8:51 pm

The nasty thing about Coinbase is that they just closed my account for no reason and trapped $250 in it. The upfront cost — in time or money — to get a wallet to transfer that into, assuming Coinbase is on the up and up about saying I can get the money out — works out to about as much as the money trapped. Nice way to collect a little endowment — close people’s accounts when you like and, if they’re duffers about things cyber, like digital wallets, you’ll get to hang on to the coins because it’s too hard to get them out.

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BruMo
Member
BruMo
May 11, 2017 9:16 am
Reply to  deboruth

got to be more to that story deboruth

waseem77
July 29, 2016 9:10 pm
Reply to  hendrixnuzzles

I actually bought some today, but the transfer from bank is waiting to clear. Around what time were you trying to buy?

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jimbo16
Member
jimbo16
July 30, 2016 10:47 am
Reply to  waseem77

STGM-from the time you click on deposit funds it takes 4-5 days for Coinbase to actually deposit funds and allow you to buy. As i recall a few months after opening my account they gave me options via loading my drivers license front and back and they have raised my daily limit to $50,000. You will find prices for bitcoin and ether rather volatile, just like buying stock or ETF avoid buying at the peak, when bad news hits the wire and prices drop, buy. You must think long term as digital assets are the wave of the future. I have a friend who buys and sales these all the time, you can place limit orders, use stop loss orders. It is a little risky for my taste. I love Travis’s take and have done the same for a few years now, buy in small increments and basically accumulate for the long term. The value of my account is up between 200-300%. And i feel it has much more room to grow but again, i prefer the slow and steady approach like Travis. I would never suggest betting the farm on any of this, it has risk but what doesn’t?

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jimbo16
Member
jimbo16
July 30, 2016 10:31 am
Reply to  hendrixnuzzles

Hendrix-when you access coinbase at the bottom there is a link to the GDAX which is a global digital asset site sort of separate from their bitcoin exchange where you can buy and sale ether in various currency’s depending on what country the buyer is located in etc. Coinbase is US based, located in San Fran i believe but they are real. If you reread Travis’s article he isn’t saying invest your nestegg or bet the farm. But rather buy a little, you can buy $100 a week or month. I love the possibilities for future growth in the digital arena. There will be some bumps in the road, bitcoin was crushed by the demise of Mt Gox (the Japanese exchange) a couple years ago. Ether has recently been crushed by theft and created a fork to segregate the good from the stolen ether. My experience tells me to take advantage of these hiccups and buy when prices are depressed or cheap. I feel the long term viability of these crypto currency’s is real since they are limited in supply unlike any government currency. Imagine living in Greece or Cyprus where you know the banks are broke, financial crisis after financial crisis and so forth. When things get bad and your bank only allows you to get like $60 a day from the ATM. Can you see the need for having “something else” available to you? I sure can.

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Cush
Guest
Cush
April 2, 2017 10:44 am
Reply to  hendrixnuzzles

Creating a digital wallet on Coinbase is simple. Even kids in grade school have them. Your ignorance is what keeps people away from the space because of a bad user experience. Keep at it and buy a few bits to start. When you see the growth you’ll be chirping a different tune.

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richingv
richingv
July 29, 2016 8:31 am

Mega Trends and the Palm Beach Letter have been consolidated and as a subscriber of many letters thru the years I can say they give you far more valuable reading than any other service. Haven’t done the Bitcoin thing yet as it is over my head.

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Brian Boran
Member
Brian Boran
July 29, 2016 9:21 am

What symbol is it?

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Jon Snowgren
Member
Jon Snowgren
July 29, 2016 9:36 am

Ethereum on the Coinbase platform facilitates the year to date international expansion of YoCoin, the next Bitcoin.

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lc_fort
Irregular
lc_fort
July 30, 2016 9:33 am

For storing value and ease of use, one may prefer BitGold as it provides a convenient exchange media based on tangible asset (gold).

For more details : https://en.wikipedia.org/wiki/BitGold

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archives2001
archives2001
July 31, 2016 12:56 am

Travis et al:
As usual, an outstanding article and many sage comments as well!
A good likelyhood: The Fed/CIA, WB, BIS, EU, BRICS, etc maybe taking a wait see on this to see which one they may use as a template/protocol for the coming global currency reset/reboot.
Was the CIA involved in the birth of Bitcoin?
Maybe.
Could the global SDR be part of the Mix ? Maybe.
In early Oct this yr, China is to become part
of the ‘SDR Club’ as i understand it.

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quincy adams
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quincy adams
March 29, 2017 9:19 pm

The Yuan is likely to get a much bigger jolt than just the SDR adjustment in the coming months. With Sir Donald preoccupied by tilting at the free press, global warming and Russia probes, while promoting coal mining to the scattered applause of a few miners, China is apparently embarking on a major clean energy initiative and forging Pacific Rim partnerships that we abandoned by scuttling the TPP. Their progressive growth plans, if not matched by us and other countries, could boost their currency and relegate the dollar and several other currencies to the dustbin.

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quincy adams
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quincy adams
March 30, 2017 11:30 am

True, but the big boys, i.e. Goldman Sachs are turning bullish on China again. If there is a new rush of dollar investors, it’s going to be difficult to keep a lid on the Yuan, I’d think.

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jimbo16
Member
jimbo16
July 30, 2016 1:51 pm
Reply to  Jon Snowgren

WTF? Jon “facilitates the year to date…what” Maybe I am not as sophisticated enough to understand your meaning with this. it is new to me and i read the yocoin facebook page…..seems odd there are entities selling stuff and yocoin dubs them as do not buy, scam etc. buyer beware of junk like this, try explaining more for us here and avoid pump and hype language like this, just sayin.

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Donald Hoffman
Member
Donald Hoffman
July 29, 2016 10:05 am

A federal judge in Miami recently declared Bitcoin to be property and not money in a federal case. The defended was acquitted. If this case is not appealed it could keep the government out of this whole issue. Bitcoin becomes a tool for bartering?

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RampageKy
Member
July 31, 2016 5:50 pm
Reply to  Donald Hoffman

The the IRS determination too. I wouldn’t worry about interpreting that too literally, aside from when it comes to correctly paying one’s taxes. It still carries all the basic characteristics of being a currency and it is used as such every day. Consider the US Government has other reasons for not wanting to recognize cryptocurrencies as legal currencies.

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Jimbo
Guest
Jimbo
July 29, 2016 10:39 am

Great article, I also have small amounts of both in a Coinbase wallet. These are volatile indeed so I am buying ether at $10 or less and bitcoin for $400 or less. The dozen bitcoins i have were bought around $190-290 so I am up quite a bit. Coinbase even offers a VISA debit card so you can spend bitcoin anywhere that accepts VISA. I am not spending it yet but rather holding for the long term as I am sure both will test new highs in the future. I feel certain crypto currency’s are the wave of the future. Canada is starting a blockchain currency later this year too, doesn’t do us much good in the US since everything we have is based on US dollars but the WH is holding meetings and looking into the same. Blockchain technology is the key here. When you go to the store and buy a pack of gum with a $20 bill, you get $18 in change right. The store or bank has no idea what happens with the cash, it is untraceable, not with the blockchain as everything is digitized. It can be tracked from start to finish, permanently. Imagine the future, welfare, food stamps, any gov’t benefit being tracked from creation to final destination. Banks love the idea too, odds are within 10-20 years the corner brick and mortar bank branch is no longer needed. Why pay tellers to handle cash and checks, everything is moving in the direction of a cash-less society. You see this and know this, companies like Brinks that drive around in armored trucks picking up cash from merchants are becoming extinct. I see a bright future for bitcoin (number one) and ether (number two) but as the article states, don’t bet the farm as the transition may take some time to catch on and there will be volatility so treat it like anything else, buy on the dips but look to the long term for real gains.

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Princess Dejah
Princess Dejah
March 29, 2017 5:37 pm

Excuse me, Gentlemen, but my understanding was that the blockchain allows for anonymity, not traceability. ..to the internet!

Eureka! For Clarity, See this: https://www.quora.com/How-is-blockchain-verifiable-by-public-and-yet-anonymous and this:https://ihb.io/2014-11-17/news/anonymity-block-chain-13570

Awesome, right?

I am bullish on Ethereum. It’s the future.

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Jimbo
Guest
Jimbo
July 29, 2016 12:00 pm

too many questions here from people that really don’t understand or get crypto currency. Do your due diligence here, please don’t jump in with both feet, Coinbase is a US based company based i believed in San Fran. Read articles daily at http://www.coinbase.com and see companies like Microsoft and IBM investing millions in the blockchain technology. It tells me there is in fact a future in all this. It solves many problems, yet does create other issues with freedom of information etc. My VISA debit card from coinbase can be used anywhere VISA is accepted, Canada, Europe and is instantly converted in whatever local currency needed….what a concept. It isn’t US dollars unless i spend it here so how can regulators call it US dollars, it ain’t cash necessarily. I recently bought a stock or ETF in my 401K tracking bitcoin, see GBTC. It is an instrument that supposedly tracks the value of bitcoin but I am learning the hard way it may not be a true indicator, kind of like buying gold ETF’s like GLD that supposedly track the value of gold and a certain percentage of gold is held in storage in warehouses, but i am pretty sure this is a pure manipulation game, the big banks rape and pillage these ETF’s and I do not trust them. It is the difference between owning paper, versus physical assets. ETF investments are subject to massive shorting and prices can be manipulated with a click of the mouse. I am growing wary of recent declines in GBTC down 5% today while the Bitcoin price is actually up a dollar? How did this happen? For an investor using a 401k i can withdraw funds (and pay tax or penalty’s) or try to buy something like GBTC and take my chances. I would much prefer to own it in my own Coinbase account etc. But again do your own research and due diligence, please. Travis and others print some great info and it seems the more i learn the less i really know. It is new technology and it is evolving. Don’t gamble the farm on any of it, your better off going to Vegas and spin the wheel etc, either double up or lose it all….not a good choice. But i highly recommend you accumulate over a period of time, buying the dips and use a buy and hold strategy and plan for a future what is rapidly changing.

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aaiken
aaiken
July 30, 2016 5:35 am
Reply to  Jimbo

GBTC is not a good ETF to hold, in my view. At Friday close, it traded at a 44% premium over underlying value (1 share of GBTC = 0.1 BTC).

The reason for the premium is the ease of trading it. There are several exchanges where BTC, ETH, and other cryptocurrencies are actively traded, but it can be a challenge to even open an account at them. Also, as in the case of Mt. Gox and Cryptsy, through either mismanagement or malfeasance, exchanges have abruptly ceased operations, jilting account holders.

GBTC avoids these issues.

However, the better option is to buy BTC or ETH at a wallet service like Coinbase or Circle. It you want to own other cryptocurrencies, Shapeshift (shapeshift.io) can be used to make easy and fast transfers from BTC/ETH to the target currency.

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jimbo16
Member
jimbo16
July 30, 2016 2:16 pm
Reply to  aaiken

I agree 100%….but if you have a IRA or 401K plan your choices are limited. If you withdraw the cash, you owe tax and sometimes penalties. To then take what is left, transfer funds to Coinbase and buy or lock away in the wallet/vault normally is not cost effective. There are a number of ETF’s coming and are getting proper registration with the SEC etc to sale bitcoin and other crypto currencies via your stock broker. Both long and inverse and probably some leveraged ones too (see ZSL which is a leveraged 200% inverse for silver) Some of these investment choices are scary, it brings manipulation into the game and just like silver and gold, these ETF’s are purely paper transactions, not physical assets. I am playing the ETF game with extreme caution. I agree GBTC may not be a good etf with the premiums and potential of manipulation but in a IRA or 401K there are not many other options, yet.

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Jimbo
Guest
Jimbo
July 29, 2016 12:04 pm

My bad….the news site is http://www.coindesk.com with daily articles with developments in the industry.

RampageKy
Member
July 29, 2016 12:04 pm

Good article here. I used to Coinbase to nibble on bitcoin last fall, then sold some off some of it as the dollar price shot up. But I kept most of it for similar reasons… it is a neat technology that stands to change a lot of things in daily life that are currently very inefficient. I figure it’s likely be a great hedge against inflation too. Coinbase is definitely a fully legal operation in the U.S. If there is any reason to hesitate from using them, it’s only because you are trusting Coinbase to hold the actual bitcoin as opposed to holding your own bitcoin on a disk or thumb drive. They are very easy to use and never had an issue.

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Jimbo
Guest
Jimbo
July 29, 2016 12:29 pm

excellent point Rampageky, Coinbase is much better than other site i signed up for but choose not do use. They only opened the GDAX exchange a couple months ago for buying ether. They respond right away to customer service inquires. My bitcoin wallet has a vault option where my bitcoins are locked away and cannot be hacked or spent. To spend it I have to first transfer it to my wallet from the vault. Their customer support just responded to my question regarding transferring my ether from the wallet to a secure vault. Today ether is not available in a vault, but it is coming soon and they are rapidly working on that feature. I would much prefer to segregate my ether in a locked and secured vault that I alone control.

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RampageKy
Member
July 31, 2016 5:38 pm
Reply to  Jimbo

Good to hear. For what it’s worth, the only way you are totally in control is to have the private keys stored in a secure, offline location. Of course, this also leaves you with the risk of loss should you lose track of the keys somehow. With services like Coinbase, you are trusting the service to keep those keys (and their insurance carrier to back you up if something goes wrong). But you could definitely do a lot worse, and it’s a dead simple solution where you don’t have to worry about user error!

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SoGiAm
July 29, 2016 1:51 pm

Here is discussion which includes a Forbes article and links describing ETC, ETH, the hard fork and Kraken. http://www.stockgumshoe.com/2016/07/microblog-ethereum-the-battle-of-the-chains-kraken-etc-eth-more/ Best2ALL-Ben

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jimbo16
Member
jimbo16
July 30, 2016 2:54 pm
Reply to  SoGiAm

Great links with considerable information here Sogiam, you must be part of stockgumshoe and work with Travis and the gang. This is why i try to read what this site offers or thinks of the various investments and newsletters. You guys never let me down. Knowledge and information is what you get here, not hyperbole or get rich quick scams. Thanks to you and Travis for keeping us informed. I do like Kraken (never seen them before now) as they are US based and offer a wide variety of products. I have confidence in Coinbase and that is where i set things up and will continue doing business. I haven’t seen or read anything but positives and the ease of trading is what i like most, again thanks for some good information with links….

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SoGiAm
July 30, 2016 5:53 pm
Reply to  jimbo16

Thank you Jimbo16. 🙂 You made my day!
I am a very fortunate Irregular member of the #Gummune, led by #ZKSS and the Gummunity at large, led by Travis. Becoming an Irregular member is the very best investment I have ever made. Best2You4All ~ BenJammin’ http://www.stockgumshoe.com/author/sogiam/ @H0U3

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hbharoocha
July 29, 2016 3:43 pm

You can see how to buy ethereum here:
http://ethereum.stackexchange.com/questions/1915/how-do-i-buy-ethereum-with-usd

1.Create an account on bitfinex or Kraken or Gemini.

2.Verify that account. You will need to upload a wide variety of documents proving you are who you say you are and stuff. It’s all regulatory stuff. Once you upload this stuff, verification takes about a day or two, much fast than it used to be.

3.Follow the instructions on the exchange to deposit USD into that exchange. This, depending on your bank and the wire transfer, will typically take 3-5 business days.

4.Now you have USD in your exchange account and can buy ETH with it.

5.Once you have all the ETH you want, withdraw that ETH into a wallet that you control. Exchanges are notorious for being hacked and you want your funds in a place that you have the private key to. So…

6….While you are waiting for your verification and transfer, download and install Mist / Ethereum Wallet. Run it so it can sync the blockchain.

7.When you run it, it’ll prompt you to make a new account. Create a password that you will never ever forget and create the account. Then, it’ll give you an address that starts with 0x.. This what you will enter on Kraken or Bitfinex to move your ETH from their account to your own.

8.To safely keep your account you have 3 pieces of information: Your address (0x….), your password, and the private key. The private key is like a password, but way more intense. Plus, it’s a password that is protected by another password. In Ethereum Wallet, this private key is stored in the keystore file. You need to make a backup of this in case anything happens to your computer. In Ethereum Wallet, go to the top bar and find ACCOUNTS -> BACKUP -> ACCCOUNTS. It’ll open up a folder and inside you will see a file. This file is your private key. Copy this to a USB drive and safely store the USB drive in a different physical location than your computer (in case your house explodes).

Alternative steps 1-5:

Use Circle or Coinbase which allow you to purchase $300 USD worth of BTC instantly with your debit card. Then create a Ethereum Wallet account and back it up. Then use http://shapeshift.io/ to turn that BTC into ETH. On ShapeShift, simply enter the address to your new Ether Address. It’ll tell you where to send your BTC. In Circle or Coinbase, send all the BTC to that address. The ETH will appear in your ETH wallet in ~20 minutes.

Alternative steps 6-8:

Ethereum Wallet is highly recommended but some people have issues installing it if you have firewalls or older computers. If for some reason you cannot get it to run, here is a list of easily accessible wallets. Follow the instructions provided by each of these wallets to back up your information. In Jaxx, that is a mnemonic. In EthAddress and MyEtherWallet, you can save the text version of the private key, print out a version, or save a JSON version (like the keystore file in Ethereum Wallet). Just, MAKE SURE YOU BACK IT UP.

•MyEtherWallet.com / GUI / Website / can be downloaded or Chrome Extension

•Kyptokit’s JAXX wallets / GUI / Unofficial / Multi-Platform

•Icebox / Primarily for Cold Storage / can be downloaded / by christianlundkvist @ ConsenSys

•EthAddress.org by ryepdx / GUI / Website / can be downloaded

•Kryptokit’s ethereumwallet.com / GUI / Website

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jimbo16
Member
jimbo16
July 30, 2016 11:36 am

I opened 2 other accounts similar to this a few months ago to try and buy ether since Coinbase at the time did not have a platform to buy ether. But both were a pain and required me to jump thru so many hoops I never completed all the steps to link a bank account to make deposits etc, so i was never able to use either. Maybe Coinbase was easier since i already had a bitcoin wallet. But a couple of months ago Coinbase added the GDAX exchange and purchases of ether is simple and hassle free. I started a couple years ago buying one bitcoin at a time between $190-290. With bitcoin jumping to $750 earlier this year i shifted to ether buying in the $9-14 dollar range. Both are limited in units available, unlike any gov’t currency that can be printed at will. This is where value comes in to play.

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riseup
riseup
August 2, 2016 8:13 am
Reply to  hbharoocha

Thanks HBHAROOCHA. I have recently opened an account with Kraken and have been verified. I sent some deposits yesterday and hopefully it will be received soon. I will follow this process to buy and store my Ether. Cheers!

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armadilla
Member
armadilla
September 2, 2016 5:31 pm
Reply to  hbharoocha

Of course the People’s Republic of New York has to license everything in existence so Coinbase will not let you trade Ether if you live in NY.

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Princess Dejah
Princess Dejah
March 29, 2017 5:42 pm
Reply to  armadilla

That is a drag! Maybe you can get past that by using a VPN to access the coinbase site! Try downloading a VPN app to your phone and then getting on line from another location than New York. Hope that helps! (Let me know, please)

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DBMD
Irregular
DBMD
July 30, 2016 1:26 am

I use coinbase and have used it for transactions. I use it for international transactions and also for Overstock. It has done quite well in the time I bought, and I’m up over 100% in terms of my initial value. I saw their add in my email for Ether. There are advantages over gold, but I still have more Au and Ag by far. I will get around to looking at Ether.

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hendrixnuzzles
July 30, 2016 1:54 pm
Reply to  DBMD

Thanks DBMD. Good to hear someone has actually used Coinbase…I assume you used Bitcoin ?

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DBMD
Irregular
DBMD
July 31, 2016 10:10 pm
Reply to  hendrixnuzzles

Yes Bitcoin.

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crusadercliff
crusadercliff
March 30, 2017 2:13 pm
Reply to  hendrixnuzzles

I use coin base. Bought bitcoin at $650 and ether at $12. Cashed out half my holdings when they doubled. It was fast and simple. Check out the YouTube channel ‘Let’s invest’. He has a lot of videos on cryptocurrencies. He is big on DASH and NEM. I have not invested in these newer ones yet though.

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Jimbo
Guest
Jimbo
July 30, 2016 8:52 am

Good for you DBMD, and yes look into ether as well. Both are positioned well as the number of units is finite. Once created they cannot just increase the number of coins or units. If and when the US creates some type of crypto currency you know they will add more by the billions or even trillions. Just like they do with money. But in my mind, it doesn’t become a store of value unless it is limited in supply. Just like gold, there is only so much available at any price.

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hendrixnuzzles
July 30, 2016 1:52 pm

Sounds right on all counts. Shells and cigarettes and salt have also been used as currency, it is a matter of acceptance and trust.

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jimbo16
Member
jimbo16
July 30, 2016 4:15 pm

You are absolutely correct Travis, gold and silver (and i own both-much more than any crypto currency) have been a store of real value for 5000 years. But i must point out, i cannot spend either at the grocery store. Those folks in Greece and Cyprus had to find someone with CASH to trade or barter for precious metals during times of emergencies. Not always an easy task. The psychology is changing, rapidly. I prefer to hedge my bets somewhat. I am not a gloom and doom preper claiming the world is doomed etc. there is lots of stuff out there trying to scare the hell out of everyone. But when i was a child i went thru the Boy Scouts and learned many things about how to survive in the woods etc, many things i still hold on to today. The motto is “be prepared” and these are ideas that are still valid in this day and age.

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Phil
Phil
July 30, 2016 4:35 pm

I read the Palm Beach Letter, and always enjoy the Gumshoe report. But I think you missed a very important driving force that is going to be good for some blockchain supplier. — SPEED ! Banks to this day handle a tremendous amount of currency with old slow systems. As we approach a cash less world, banks have to be able to handle the transactions safely at over 500,000 transactions a second. That is a must. (I think I got the decimal point right. Blockchain is the only technology on the horizon that I know of that can provide integrity. Ether is currently (I believe) that can provide the needed speed. That gives it potentially a very big value if it becomes the currrenc of choice. I was hoping that you would delve into PBL’s value analysis. But I think inherrentlyif the banks have to use ETHER to get the integrity and speed, Then there is some substantial value in the technology.

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jimbo16
Member
jimbo16
July 30, 2016 7:01 pm

Travis and Fill, you are both partially right here. Maybe this is why the courts don’t consider crypto currency as money. But rather as property. I think i was mistaken in ways when i first threaded these waters a few years ago, it isn’t necessarily currency. It can be, but i don’t think it technically is. Is it the technology? Is it a true store of value? All good questions which comes back to my and Travis’s original concerns. Do you jump in with both feet and bet the farm? I rather take a try and see approach, buy some, trade it. See what happens next. None of us have a crystal ball. Someone selling a newsletter talkin about calling every turn in the markets for the last 40 years making 1271% on XYZ and 1896% there etc. You know the pump, they are selling you advise for a cost, thats how they pump sales and some make a lot of money selling it. Thats why I love to check out what this site has to say first, don’t jump into any of this without getting some basic understanding first. This is new and will continue to evolve, it is technology for the future. I recently read a article with Tim Cook at Apple (I love my iphone by the way) he made some fascinating points i want to share. He says they are working on apps we don’t yet know we need…..he has my curiosity for sure, whats next…?

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Johan
Member
Johan
July 31, 2016 8:06 pm
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jimbo16
Member
jimbo16
July 31, 2016 11:17 pm
Reply to  Johan

You are absolutely correct Johan , you/we should be careful with ANY new purchases of crypto currencies. This is exactly why I prefer bitcoin, they are the largest and , bitcoin seems to set the standards for everything else that follows. Many new types have come and gone, dozens….and a few crashed and burned. Coinbase does not yet offer a vault for storage of ether, a true concern indeed but they are rapidly working on solution’s. Will there be new thefts or hacks? Yes, indeed, the criminals are clever, this will continue to evolve and hopefully they learn from their mistakes .

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jimbo16
Member
jimbo16
July 31, 2016 8:07 pm

I wanted to share some information with you all. There is a website http://www.fiatleak.com you can watch bitcoins move around the globe, live. Turn off the noise feature as it goes ding ding during peak hours etc. The other useful tidbit regarding ether on the Coinbase GDAX is when placing limit buys, price points seem to bottom between 4-5am EST for some reason. I picked up another 15 ether this morning for $11.89. It appears the price dropped around 4:14 this morning to 11.70 so my limit order filled. By 9-10am when our markets open the price tends to jump considerably. My only point or advise here is, use limit orders and set your entry points low as sometimes you get lucky and gets fills at a much cheaper price for some reason around 3-5 am EST. The GDAX exchange has only been open a couple months thru Coinbase but i have seen a pattern for what it is worth.

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DBMD
Irregular
DBMD
July 31, 2016 10:14 pm

I like Bitcoin for international transactions. Over night with the Brixit scare it surged a 100 points like 620 to 720, and my gold did well too. I see the advantage, compared to gold, is no transaction costs. The negative could be huge price drops compared to dollar value. I have lost my Amazon account and shop Overstock, so whether up or down relative to the dollar it has buying power. I use Linux too!

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