
Billionaire Mike Novogratz says 10% of his money is in Bitcoin and Ether - AroundTheBlock_
http://money.cnn.com/2017/04/20/investing/mike-novogratz-bets-big-on-bitcoin-ether-blockchain/index.html
======
T-A
The actual quote is "Ten percent of my net worth is _in this space_ ", said at
the "Blockchain Disruption" forum [1]. A reasonable interpretation would be
that 10% of his money is in _blockchain companies_.

[1]
[http://www.hbscny.org/s/1738/cc/index2.aspx?sid=1738&gid=4&p...](http://www.hbscny.org/s/1738/cc/index2.aspx?sid=1738&gid=4&pgid=54757&cid=116461&ecid=116461&crid=0&calpgid=13&calcid=78389)

~~~
mrb
" _Novogratz says he bought Ether when it was trading for about $1. Today it
's worth over $48._"

He is worth ~$2B. Assuming he put 0.2% (only $4M) in Ethereum during the crowd
sale, 3 years later Ethereum appreciates 48× and represents 10% of his net
worth. Of course he says he is also invested into Bitcoin, not only into
Ethereum. Say he purchased only $2M of ETH, that's 3300 BTC as of the crowd
sale's initial phase (22 Jul - 5 Aug 2014 when 1 BTC was ~600 USD and
purchased 2000 ETH,) so he got 6.7M ETH which is 9% of the total ETH supply at
genesis.

Edit: oops. He didn't say he purchased at the crowdsale (0.0005 BTC or 0.30
USD per ETH) but when it was 1 USD per ETH. So he would have needed to plunk
0.6% / $12M of his wealth into Ethereum. Still a tiny fraction.

~~~
Pxtl
I don't know much aboute Etherium but wouldn't he be owner of a substantial
fraction of the blockchain at that point?

If so, he can't sell it without tanking the value so hard he'd never be able
to get a decent fraction of its "worth".

~~~
mrb
Selling ~7M ETH is easy without affecting the markets too much. Kraken and
Poloniex each do an average weekly volume of 3M ETH on the ETH/BTC pair:
[https://cryptowat.ch/poloniex/ethbtc/1w](https://cryptowat.ch/poloniex/ethbtc/1w)
If he spread the sale over 10 weeks he would only increase their weekly volume
by 10%.

That's not even talking about alternate ways to transfer his wealth out of ETH
(eg. approaching his billionaire friend: "how about you sell me that mansion
for 100k ETH?")

~~~
thisisit
It will affect the market. The weekly volume is irrelevant because that is
gross sum of all trades taken place. What you are proposing is that he
occupies nearly 23% of all "asks" on these exchanges which will be difficult
to achieve.

And again off exchange block/bulk sales tend to go for lower than market
price. They are rarely, if ever, executed at market price. So most probably he
will have to offer 100k ETH, 4.8mil, for a ~4 mil mansion.

~~~
mrb
Sell also on the ETH/USD pair. Sell on a 3rd exchange. Lengthen the sale to 15
weeks. And he will be at 10% of all asks. 1 in 10 ETH sold being sold by him
would hardly "tank" Ethereum as Pxtl was implying.

" _4.8mil, for a ~4 mil mansion_ " I agree and that's totally reasonable. Only
a 20% hit. Pxtl was saying something much more dramatic (" _he 'd never be
able to get a decent fraction of its worth_").

------
jeremyt
The people in this thread hating on crypto are missing the point.

Complaining that you can't go into CVS and buy something with Bitcoin right
now is like complaining that all you can do with the Internet is send
"electronic mail", which nobody reads, in 1990, or like complaining that
Facebook is nothing but a glorified campus directory in 2006.

The truth is, you can't buy things with Bitcoin at CVS because the technology
isn't there yet. Right now, Bitcoin is suitable to be digital gold, but with a
much higher possibility of return because it's a new asset.

In a couple of years, the addition of the lightning network on top of the
Bitcoin network will enable you to buy things at CVS.

Right now, buying Bitcoin is like making an angel investment.

~~~
Analemma_
> The truth is, you can't buy things with Bitcoin at CVS because the
> technology isn't there yet ... In a couple of years, the addition of the
> lightning network on top of the Bitcoin network will enable you to buy
> things at CVS.

That's awfully optimistic. Occasionally I drop in on Bitcoin forums/subreddits
to amuse myself, and what I've seen for the last year+ is a deadlocked
stalemate with the Segwit/BU/LN/no change people all screaming at each other
with no progress made whatsoever. Amazingly, Bitcoin has ended up in a place
where there's actually _less_ innovation velocity than the world of fiat
currency, because it's impossible to form the needed consensus on moving it
forward.

My prediction for the future of Bitcoin is that it won't die per se, but it
will continue spinning its wheels forever with arguments like this.

~~~
zanny
Considering the price its trading at, that is probably what people _want_.

Bitcoin is crypto gold. It has been valued by markets as cryptogold for 5+
years. Nobody wants to turn it into crypto money now, because that would
destroy the valuation for its scarcity and clunkiness.

The alogirthms for cryptomoney are going to be different, and the fact nobody
has written a compelling implementation yet (ie, can handle preposterous
transaction volume, huge networks, maintain consistent inflation to
incentivize maximum velocity so it can work as a money (unlike btc), and
avoids costing billions in proof of work mining to maintain) hasn't taken off
yet.

~~~
Analemma_
I actually completely agree with you. I didn't want to say it out loud, but I
do agree that the way Bitcoin is hyped to outsiders (as the future of currency
transactions, independent from governments and banks) is very different from
how Bitcoin holders actually think about it and use it (as an asset to be
pumped-and-dumped). Bitcoin defenders tend to get very upset when you point
this out though.

~~~
jeremyt
Whenever I look at anti-Bitcoin arguments, it mostly just boils down to the
fact that they don't really know Bitcoin all that well.

There's absolutely no reason why digital gold can't be extremely liquid.
There's no reason why increasing the valuation of bitcoin itself is going to
do away with the digital gold market (raise your hand if you hold gold and
would be super upset if it went up 100x).

The complaints about stagnation and the fact that the community is having
political difficulties etc is true. But I also remember some years ago when
twitter couldn't even keep its servers running and everyone was writing it off
as a technology that couldn't scale.

Even if the naysayers are right and and Bitcoin never becomes anything but
digital gold and a way to send money between different countries, then the
market cap still has like 50x to go.

Finally, I'll only accept arguments that Bitcoin can't become the next digital
currency from people who thoroughly understand the lightning network. If you
actually understand how Bitcoin is structured, there's no way it could ever
scale to the point where every transaction is written to the block chain.

That's why we are creating the lightning network, which is essentially a VISA
prepaid credit card system on top of Bitcoin. You can contribute a certain
amount to your lightning account and then make unlimited purchases, instantly
and it practically zero cost all month and then settle with one transaction to
the blockchain. All of this is secure and trustless.

The only thing standing between the lightning network and what we have now is
a fix for malleable transactions which is held up because of a political
dispute.

The nature of the dispute is unimportant, mostly due to the fact that the
rebels have tried to do a hard fork attack over the last month and have
failed, proving Bitcoin to be decentralized enough (and it will get more
decentralized as it gets larger). The opposition, at this point, can't win and
can only delay. At some point, incentives will ensure that they have to go
along with the fix, and then it's Bitcoin 10,000.

I'm invested in Bitcoin for the long-term and have no interest in pumping and
dumping. To date, I haven't sold any Bitcoin, and I have high six figures
worth.

I'm more bullish on Bitcoin than I have been on anything, and I would openly
welcome any legitimate arguments that convinced me otherwise, but I haven't
heard anything yet that can't easily be explained by a misunderstanding of the
underlying technology.

~~~
Analemma_
> The only thing standing between the lightning network and what we have now
> is a fix for malleable transactions which is held up because of a political
> dispute.

I think this part right here is the root of your problem. There was a good
quote from Neal Stephenson's most recent book:

“ ... I have to warn you that this is the word—‘politics’—that nerds use
whenever they feel impatient about the human realities of any organization.”

Trying to handwave away your opponent's position as "a political dispute" will
never get you anywhere. They're all saying the same thing about _your_
position! "If everyone just agreed with me, there'd be no dispute" That's why
Bitcoin is in a stalemate, with everybody accusing everybody else of having
ulterior motives while _they alone_ are the only noble people whose opinions
are purely apolitical.

Thinking that you can create a system where decisions are made purely on their
technical merits, and "politics" can be kept out, is the hopeless nerd fantasy
that we really have to get over.

~~~
jeremyt
You mischaracterize my point completely. I, at no point, make the claim that
politics isn't part of Bitcoin. In fact, that's part of its design. The whole
system is designed to be very difficult to change.

The fact that we are at a stalemate right now because of politics is entirely
true, and also entirely uninteresting to me. It doesn't matter which side is
technically right or wrong, the underlying dispute is ephemeral and eventually
something will have to be done, and will. Right now, the incentives are not
such to force something to be done, but eventually the incentives will align.

Furthermore, even if I'm incorrect and Bitcoin grinds to a development halt
completely, then it's still perfectly suitable to be digital gold and I'll be
happy to make my 20-50x return on it based on that.

I don't know who these people you're referring to are who are claiming that
Bitcoin is some autonomous system that always makes decisions based on
technical merits, but it's not me.

Of course, I have an opinion on the current controversy, and I do think my
side is technically right, but that's irrelevant. I also think my side is
being political.

------
xapata
> [Novogratz] recalls that Buterin, ... showed up late, which struck him as
> shocking -- and a bit ballsy. He figured it was worth paying attention to
> Buterin.

The lesson is to be impolite? I think I saw this in an episode of Silicon
Valley.

~~~
nugget
You can tell Buterin is really smart (and focused) within a few minutes of
talking to him about Ethereum. He showed up a few minutes late to an event I
helped coordinate. Given his personality, I just assumed he had been off
somewhere lost in his thoughts or finishing some critical task; it would never
cross my mind that he took the event less seriously or meant to be impolite.

~~~
xapata
That's how I'd take it, but the author reports that Novogratz saw it
differently.

------
kolbe
Has anyone noticed the disparity between how many articles get written about
btc's price, and how little gets written about its real-life uses and
benefits?

~~~
Mahn
That's because Bitcoin is still today too cumbersome to be used for anything
other than speculation and drugs. No one goes to the grocery store thinking
"gosh, I sure wish I could transfer some money to an exchange, buy some BTC,
set up a wallet, transfer the BTC, wait for confirmations, scan a QR code to
pay, and wait for confirmations again to pay for my groceries". The only
people that want this are early early adopters with a large stash that cannot
be made liquid easily, but otherwise adoption doesn't seem to be going
anywhere besides the existing use cases.

~~~
bergie
In my neighborhood there are bars that accept Bitcoin. I've paid several
dinners with my Android BTC wallet. Quite convenient in a city where you
usually can only pay with cash...

~~~
robbiep
Quick question - from someone who hasn't looked at bitcion since it was
between 10c and $5 - since your transaction doesn't clear until the block
propagates how they handle double spends?

~~~
akvadrako
The same way that restaurants make sure you pay instead of just leaving the
building. It's mostly just not worth the hassle to save a few bucks.

------
magma17
"Novogratz ranked #407 in the March 2007 Forbes list of world billionaires
with a net worth of $2.3 billion [...] By 2012, after the decline of Fortress'
stock price, his net worth had shrunk to $500 million."

following the tendency, he may be a hobo right now.

10% of 100 bucks, probably

~~~
jonnathanson
He needs to rebillionize, pronto. He'll be a laughingstock at Davos without
that third comma in his net worth. Next thing you know, he'll have to buy a
car with doors that open side to side, like a non-billionaire.

~~~
droidist2
As I was reading this I got the taste of tequila in my mouth.

------
atemerev
Not a billionaire, but also trying to keep some percentage of my net worth in
cryptocurrencies. Worked great so far. 10% seems to be about right.

(I have much more trust in blockchain than in government retirement schemes).

~~~
pedrocr
>Not a billionaire, but also trying to keep some percentage of my net worth in
cryptocurrencies. Worked great so far. 10% seems to be about right.

I don't see how people can look at cryptocurrencies as investments over the
long term. It's like saying you have all your money in Swiss Francs in a
checking account that returns no interest because you think the Swiss are
doing a stellar job at setting up an economy/banking system.

In the short term you're basically betting on cryptocurrencies gaining
adoption and thus more of the economy needing them. In the long term it's just
a currency not an investment.

>(I have much more trust in blockchain than in government retirement schemes).

That's not the alternative, some kind of diversified portfolio of stocks (a
simple index fund is usually the easiest) is the right benchmark. Personally I
will always feel safer with owning a (very small) percentage of the total
productive companies in the world than a currency that's only worth something
as long as someone is willing to keep trading in that specific one and not
change to some other one. I look at the value of my stock holdings in euros
only because it's also my day to day currency but the underlying value can be
repriced in any currency over the next 50 years (my investment horizon).

What I would really like to do is price my stock holdings as percentage of
total world stock market capitalization (with plenty of decimal points).
Anyone have a good source for that number?

~~~
Hermel
Bitcoin should be seen as digital gold. It has no value in itself, but its
likely that you will be able to use it for payment even if all else fails.

~~~
bigtimeidiot
> _but its likely that you will be able to use it for payment even if all else
> fails._

Can you give an example of a modern economy collapsing and reverting to gold
as a medium of exchange?

~~~
MichaelBurge
I hear Bitcoin is popular in Venezuela, where the people hunt pigeons for food
after the communists took over. It's also popular in China, where - again -
people are scared of their government.

I don't know that the US federal government is as scary, but it's not unheard
of.

~~~
chc
So we're back to "Bitcoin is mainly good for evading the law."

~~~
atemerev
The law is not always universally good.

------
dmix
I was reading his Wikipedia and apparently it was his sister who started
Acumen, the non-profit VC firm:
[https://www.wikiwand.com/en/Acumen_(organization)](https://www.wikiwand.com/en/Acumen_\(organization\))

His brother has a TV show too:
[https://www.wikiwand.com/en/Robert_and_Cortney_Novogratz](https://www.wikiwand.com/en/Robert_and_Cortney_Novogratz)

Talent runs in the family.

~~~
angersock
_Talent_ , or _money_?

------
martinrue
I'm surprised there's no mention of Dash in the comments yet. Having spent
some time researching different crypto currency technologies with regards to
becoming a better, decentralised payment network, Dash is (in my opinion) a
far better Bitcoin.

It's also the first example of a functioning DAO. The organisation is funded
entirely by the blockchain (new blocks reward the miner, the master nodes, and
fund a treasury). It has a second network of 'master nodes', which are
collateralised and incentivised to provide security and additional features to
the network, including Instant Send (really fast confirmations).

The most impressive thing is that it's already positioned to make decisions
about future changes by way of master node voting, so it doesn't suffer from
the same issues Bitcoin does currently, where proposed changes have no means
to be agreed and actioned quickly.

I'm really impressed with Dash and I hope it gets more attention.

------
no1name
What are the first 2 innings in the digital asset revolution? He says Bitcoin
is the 3rd.

~~~
klhutchins
I'm speculating, but it could be moving from paper to databases or using EFT
to move assets?

------
catenthusiast
Something tells me he won’t be a billionaire for long.

~~~
1001101
I beg to differ. He had a 48 bagger on Ether, and I know he and Fortress were
in early on Bitcoin, so I bet his cost basis on BTC is sub 100, so a solid 10
bagger. I think he's right about this being the third inning. I hold some BTC,
and am looking to diversify into ZCash.

~~~
coldtea
> _I hold some BTC, and am looking to diversify into ZCash._

Diversify into some non-monopoly assets too.

------
Chaebixi
Too bad for him the future is in Dogecoin.

~~~
jat850
I'm sitting on a million dogecoin in a wallet. My time is coming.

~~~
penagwin
I've got 2,000 in dogecoin, one day....

~~~
1001101
Coinye West. You'll thank me. One day...

------
mnw21cam
"Your video will play in ..."

Really? My video?

~~~
isk517
Yeah, your video. When I loaded the page it said "mnv21cam's video will play
in ...". Congratulations on the video I guess.

