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Billionaire Mike Novogratz says 10% of his money is in Bitcoin and Ether (cnn.com)
157 points by AroundTheBlock_ 67 days ago | hide | past | web | 148 comments | favorite



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...


"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.


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".


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 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?")


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.


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").


That's a problem for any substantial wealth in securities. Also why Wall Street stock and bond traders exist.


> owner of a substantial fraction of the blockchain

No, the blockchain is the data structure that stores historical transactions.

He could be a large owner of the circulating currency, and he would face issues trying to sell a huge chunk of value all at once. The crypto markets are not very liquid compared with mature financial markets.


He has a stake in Bitstamp (an exchange) and, from the sound of it, one or two other blockchain companies (he seems to have a close relationship with Joe Lubin, the founder of ConsenSys so they are very likely Ethereum-based startups). The rest is assumed to be invested in the currencies themselves.

I was at the panel discussion and he seems wayyyy more excited about Ethereum - I wouldn't be surprised if he held more ether at this point (which is probably why he was so enthusiastic).


Then he is going to get rekt. As the DAO debacle demonstrated, the attack surface is utterly baroque, and governance is for shite. Buterin literally said "Turing completeness is a red herring". Smartest thing I ever heard him say.


please take your shitposting back to /r/bitcoin.


Facts and logic, please.


What is riskier though, Bitcoin or a bunch of fly-by-night Bitcoin companies?


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.


> 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.


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.


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.


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.


> 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.


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.


Ripple has written a compelling implementation. It can handle massive transaction volume, is building a network internationally with established banks, is slowly releasing more currency into the wild resulting in inflation, and is pre-mined to avoid having to do proof of work.


Ripple, while interesting, isn't designed to be crypto money, it's designed to be a global settlement network, which is the first thing you'll see when you go to their webpage.

Furthermore, their transaction costs are currently at a minimum an order of magnitude more than what a Bitcoin transaction costs, running to 2-3 orders of magnitudes. It's a replacement for the SWIFT network, which is all great but not really directly competing with Bitcoin.


He also called it an angel investment. As in 1/10 or 1/20 chance at profitability, and less than that at long term sustainability. Though at this point I'd consider buying bitcoin equivalent to buying stock in a company with a promising product but some major obstacles to achieving its vision. It could go to the moon if things work out (Facebook). It could muddle along if it has a brilliant idea but major internal problems (Twitter). It could go to zero if people lose interest, lose faith, or an amazing competitor comes along (Yahoo search).


You can't go into CVS and buy things with gold either.


Pretty sure that if you ask the cashier to exchange your gold nugget with a toothbrush you will have no problem proceeding with the transaction.


I'm pretty sure that if you try to buy a two dollar tube of toothpaste with a two dollar speck of gold, they'll say no thanks.


yup, I said a nugget.


You could walk in with a brand new Playstation 4 system and do the same thing.


That is an argument completely irrelevant to this discussion.


"You can't go into CVS and buy things with gold either."

Pedantry: US Gold eagle coins are actually legal tender US currency with a $50 face value.

So while it would be exceedingly foolish to treat an ounce of gold like a $50 coin, you could.

Where this becomes slightly interesting is the $10k limit on foreign currency declarations in international travel ... since these are $50 coins of US legal tender, you should be able to travel with 199 of them (worth about $200k) without declaring anything.

YMMV. IANAL.


I would be willing to bet you wouldn't get far trying to buy things at CVS with a Gold Eagle. It's likely they've never seen one and will assume you're trying to pull some kind of scam.

Not that I'd be willing to research the point with my own money.


You are right, its an investment, because you are investing in commodity. With its limitations and the insistence of being fully de-centralized (which is in reality is not, due to the consolidation of mining power and nodes etc) and its upper ceiling of quantity, it will never be an actual daily used currency. All the hacks and heists of millions in coins in conjunction with people who have no business in building exchange sites and such doing so, will not help this cause along at all. There is a reason banking and other finance markets are regulated and backed. People just tend to focus too much on the negatives around those entities.

Something else on the same technology is a different story though.


I don't doubt the underlying blockchain technology will continue to scale but my question has always been the lock-in effect of Bitcoin and other existing crypto-currencies versus new entrants. As the major banks, payment processors, and clearing houses look into moving in this direction it's clear they are going to roll their own solutions.


Well, I guess that's great. It's a free market, and the best option will win, but a blockchain isn't a blockchain unless you have enough distributed hashing power behind it to ensure that no one entity or small groups of entities has control over the network.

I'm still puzzled as to how banks think they're going to do this.


> to ensure that no one entity or small groups of entities has control over the network.

Why is this necessarily a problem? I think the hard forks in both BTC and ETH have shown that there is an inherent "appeals" process no matter what. Seems like you can separate the appeals process from the underlying settlement and record keeping technology. New blockchain providers just need to represent what the ultimate appeals process is for each implementation (instead of hashing power, could easily be any of a dozen other ideas, including recourse to the existing judicial system which has what I'd call a net-neutral set of advantages and disadvantages).


I don't really understand the question, but anybody can create a fork of Bitcoin anytime they want.

The controversy is over which fork gets to be called Bitcoin.


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

You may be right, but judging from the clumsy and pretentious analogy about email that you think proves them wrong, you also are missing a lot of points.


> [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.


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.


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


He's probably used to doing what he wants since he works for himself.


Don't forget season 4 of Silicon Valley starts on Sunday :)


The lesson is to be so good they can't ignore you.


That may be true, but is not what the author seems to imply.


He was late to a private party at some billionaire's home, right? Perhaps there's some other context, but that doesn't seem particularly rude or ballsy, unless this was like a 4 person "party".


A "dinner party" suggests the latter. Regardless, Novogratz was "shocked".


...and in Office Space, where the hero's indifference gets him a promotion


I think that "paying attention to" could just mean watching for other bad behavior to justify action. Not necessarily paying attention to take notes from.


At that point in the article, it seemed clear the context was investing in digital currencies and why that might be advisable.


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?


Idealistic view: BTC is used to create peer-to-peer marketplaces (OpenBazaar [1]) and the underlying blockchain tech can be used to implement smart contracts that can automate systems and remove humans from the loop (Samsung/IBM ADEPT [2], Filament [3]).

Realistic view: BTC is used as a speculative hedge, and to evade currency controls in China.

[1] https://openbazaar.org/

[2] http://rethinkresearch.biz/articles/ibm-samsung-unveil-adept...

[3] https://filament.com/technology/


Can someone explain why it's a good idea to use blockchains for IoT? The example they give is of a smart washer checking to see whether the washer is under warranty when it detects a part is about to fail... but why on Earth would a blockchain be better than any old database maintained by the company? Why on Earth use a distributed ledger?


in theory the block chain can be trusted by both parties whereas the company could modify it or be malicious.....

in practice you're correct because acting maliciously would make the company lose customers and potentially get sued


That hasn't stopped them so far.


Bitcoin is definitely useful for dark net marketplaces; I doubt they would be 1% the volume in a world without a popular cryptocurrency.


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.


I've been asked a half dozen times in the past week to send (international) payments via Bitcoin. Not because the receivers are enthusiasts, but because it's the simplest way.

There's admittedly a high cost of learning/adoption, but once that is overcome it's not an issue. My guess is that (like most technology) bitcoin will eventually be easy enough to use that we don't have to understand or think about it, the same way I don't really understand how ACH or merchant processing works but I have a credit card.


I remember in 2013 there was a $148M bitcoin transaction. Instantaneous, 0$ in fees, no third-party involved, no currency exchanges. Granted, it was probably just moving money around the same organization's wallets, but that really opened my eyes. [1]

Someone described Bitcoin to me as the Internet of money. I'm guessing nobody at ARPA envisioned Facebook, Amazon, Netflix, or Google, but they created a platform upon which that innovation could occur. Bitcoin (or whatever) could be that platform for money.

Right now, I can see this being very useful for international remittances, like you have observed, commodity money (serving the role that gold does, as a hedge against currency devaluations, capital controls, etc), and in the informal sector esp. in the third world, where you have smartphones, but maybe not the financial institutions to bank with.

[1] https://news.ycombinator.com/item?id=6782290


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...


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?


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.


Double spends are overwhelmingly a theoretical issue. Credit card fraud, on the other hand, is pandemic.


>In my neighborhood there are bars that accept Bitcoin.

Something tells me you don't live in Nebraska.

>Quite convenient in a city where you usually can only pay with cash...

How is it more convenient than cash?


You cannot back up cash

You cannot securely send cash across the globe without depositing it into a trusted third party

You cannot program physical cash


Are you just listing a few random ways that Bitcoin is more convenient than cash? The OP was about spending money at a bar.

But okay, here's how cash is more convenient: I can walk outside my office and use this dollar bill at any store anywhere around me. It has apparent value to everyone I will talk to. I don't need the internet.

If you need to "program" or "backup" your money, I guess Bitcoin is your medium. No argument there.


Which neighborhood are you in?


He's probably in Berlin


I don't think this is accurate. The main use case for Bitcoin seems to be remittances and savings for the rich and middle-class in countries with unstable currencies, not grocery store payments. Compared to USD, it's cumbersome and expensive, but compared to gold or Western Union, it's clearly better.


Do you really believe more Bitcoin is used for this than evading the law?


Do you have any data that prove me wrong?


Do you have any data that prove you right?


I think that believing people are not criminals is the less extra ordinary case, considering how few people are criminals in the first place.

There would have be something extraordinary about bitcoin or the way it was represented to society at large that attracted criminals.


You don't understand how the law works. You are a criminal. In the u.s., for example, that shining city on a hill, it is estimated that a typical adult commits three felonies on an average day.


No, actually, I don't. I was just expressing an opinion backed up by my own evaluation of Bitcoin's strengths. User chc responded with such incredulity that I thought he might have some information I don't.


Ok. Just wondering. I actually have neither opinion nor data on the subject.


And compared to Ripple, it's still astoundingly clunky.


> 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...

That cracked me up, because it sums up much of the Bitcoin experience... but in Australia at least, there's a card (Coinjar Swipe) that you can use to pay with Bitcoin in any store that accepts EFTPOS, which is most Australian stores. (The same card terminals that accept Visa & Mastercard usually accept EFTPOS.) You can even use it to convert Bitcoin to cash as Cash Out at supermarkets.

https://support.coinjar.com/hc/en-us/articles/202202609-Intr...


That is any topic ever.

Anyone can "contribute" to discussions on anything from the budget of the DoD to health care without having the slightest clue how anything actually works. All you have to do is instead of having to deal with those cumbersome details you just talk about "money" and suddenly everybody is free to join the discussion with great enthusiasm and unhindered by constraints of missing information or subject knowledge.

That's also why a lot of "solutions" to any problem work like this:

  Problem => Money => Solution
which actually means

  Problem => Magic => Solution
That is especially prevalent when talking about great societal problems, from health care to education. Or maybe it just feels that way because that's the kind of discussions I tend to see the most.


That's because writing about price changes requires little knowledge or research into how the system works.

I write meaty articles about Bitcoin; if that's what you seek, check out: http://www.coindesk.com/author/jameson-lopp/ and https://medium.com/@lopp


I feel like we're beyond pretending Bitcoin has said uses and benefits and have accepted its status as a technical commodity/investment instrument.

It could be because of the barriers to entry, even perceived barriers to entry, or barriers to said use that it's not actually being used for its intended "purpose", admittedly.


It saddens me that bitcoin's path towards a common payment network is so slow. I've always liked the technology (or the core ideas behind it), but its adoption is hindered by popular and factual association with illegal activities, and by the recent stagnation regarding scaling.


Plus it is hard to use and distributed network trust isn't particularly advantageous compared to a legal system.


Use of the legal system is restricted to corporations and HNW individuals (who typically have multiple corporations, so....)


No, most banks will reverse illegitimate transactions for run of the mill customers.


I see, so the banks are the new judiciary?


No, they are required by laws to do certain things and courts only have to come into it when they don't do them.

I didn't say "go to court", I said "a legal system".

Users of bitcoin can also use the legal system to do things. But then you are messing with bitcoin for what reason?


Because I want my grandchildren to be free humans, to live out their lives in productive, peaceful harmony (and yours). Debt-based currency and monitored, controlled transaction systems are fundamentally incompatible with this goal.


It'd be interesting to construct a model of bitcoin as debt, the debt being the future energy costs needed to run the network (which is necessary for bitcoin to have any value today).


If you are using Bitcoin as a store of value then price is a major part of its real-life use and benefit.


I strongly suspect (but haven't done the research to prove) that bitcoin is only viable as a currency because of the $ infusions from ransomware.


"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


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.


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


Might as well throw away that three comma painting and those comma pillows, eh? (Looking forward to season 4!!)


Following the tendency he's $1.3 billion in debt!


CryptoDebt.


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).


>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?


> I look at the value of my stock holdings in euros only because it's also my day to day currency

Until it isn't and it's replaced by a new one. Less than 20 years ago Euros didn't exist. It's entirely possible that in 20 years time they won't exist either...

You've played your hand by saying you look at your stock holdings in fiat. What happens if fiat fails you? i.e. if hyperinflation kicks in or the powers that be decide to restrict access to your fiat? I realise it sounds tinfoil hat-esque but if investing to safeguard your future, these are possible doomsday scenarios... (just ask people of Venezuela)

> 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.

A deflationary currency with a fixed supply... so it's an investment in the sense that (a) it's scarcity will naturally drive up the price if demand increases (b) it will hold value better than fiat, given that the supply of fiat is, well, unlimited.


>You've played your hand by saying you look at your stock holdings in fiat.

Are we having a discussion or playing poker? What hand did I play?

> What happens if fiat fails you? i.e. if hyperinflation kicks in or the powers that be decide to restrict access to your fiat? I realise it sounds tinfoil hat-esque but if investing to safeguard your future, these are possible doomsday scenarios... (just ask people of Venezuela)

I'll just sell my stocks for another fiat currency or even bitcoin if/when I want to. You're missing the point completely. My stock holdings are shares of companies not fiat currency. I can look at them in whatever currency I want. I can also see the value of my holdings in dollars or yen or bitcoin and it's just as valid. I'm not storing value in euros, only using them as the unit when doing valuation of my holding of companies. The same applies to cryptocurrencies, they're not valuable in themselves, only as a means of exchange.


But a diversified stock portfolio wouldn't allow me to write smug Medium articles when speculation drives the price up and remain conspicuously silent when the price craters shortly thereafter.


You are doing it wrong. Sell the rips and buy the dips.


Diversification only on the stock market isn't a good idea. It doesn't protect against the insurers going bust, for instance. In this case, keeping some % of net worth in a cryptocurrency makes sense, just like keeping a few gold bars/coins or an emergency stack of bills makes sense for that day when the internet is broken.


>It doesn't protect against the insurers going bust

Can you clarify? I mean, I agree that your diversification should extend beyond the stock market (bonds, some metals, real estate). But I'm not sure what you mean by the above.


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.


In the event of a societal collapse so great that no money is usable, it's pretty hard to imagine people caring about Bitcoin. There might not even be power in this weird Mad Max scenario. They'd probably want to barter for goods.


Societal collapse doesn't have to mean going back to the stone age, it could mean e.g. the Iranian revolution. Or for a contemporary example: the Syrian civil war.

Even Spain was a dictatorship until 1975. Everybody should consider the possibility that their society will collapse, even if they choose to do nothing about it.


My point is that there are a lot of things that seem like they'd be better to have in case of societal collapse than an Internet currency with no intrinsic value that you'd have to educate most of your (possibly former) compatriots about just to have a chance of them letting you use it.


>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?


I can't give any such example. However, EVERY economic collapse has been followed by rebuilding. Maybe the nation has a new name or new boundaries, but something is always rebuilt. And once it is, gold has value again.


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.


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


The law is not always universally good.


Especially when your and their opinions on taxable assets differ.


Oppressive governments are essentially the only good reason to use bitcoin, since the usual financial system is far more efficient at storing and transmitting money. He's either evading taxes or speculating.


My bank charges $40 + 2% forex spread for a wire transfer to Thailand. With Bitcoin I actually come out at a small profit. Bitcoin is way better at consumer level international transfers than banks.


Even generally non-oppressive governments make errors, and it happens more often that you'd think (and suing might be prohibitively expensive, untimely, or not an option at all).


The usual financial system is far more efficient at converting your wealth for the use of the oligarchs. USD for example has lost almost 100% of its value since the institution of the Federal Reserve system. The wealth did not go away. It was merely transferred from the populace to the rentiers.


Mostly collapsing countries revert to .. dollars.


So you think when society around you is failing you'll still have enough infrastructure to be able to do transactions in bitcoin? Seems like a narrow scenario. Bad enough that there are no reasonably stable fiat currencies to be able to trade (whatever they may be because my value is in companies not currency so I can use whichever) and yet good enough there is still a working internet and enough miners for the blockchain to work.


Because it's not an investment but a safety net like gold and silver. Crypto-currencies fans are the younger version of goldbugs.


>because it's not an investment but a safety net like gold and silver

Only if you're a resident of an unstable country.

Can you name a crisis where having a stash of gold and silver mattered? Do you think people are going to trade valuable goods (food? water? ammo?) for your metal bars? I can't imagine the circumstances.

When SHTF the government (or someone else) will confiscate that wealth. They have in the past. Personally, I think metals will matter less in any apocalypse, because they have no practical use.


As a Russian, I have survived the USSR economic collapse. Having a stash of gold would be handy (dangerous, as it would have put a mark on your back, but still preferable to holding any amount of Soviet money, which became worthless in mere months.) Gold was traded for great value in the harshest of times there.


Cypress is a stable and prosperous country, but they had banks crisis and their bank savings were confiscated to prop up the banks.


Cyprus is a country with a wall running across one corner of it which operated its financial industry as a tax haven, overbalancing the economy. Savings in excess of the insured level (€100k) took a cut (8% I believe).


I think the most valuable thing you can possibly own in a full blown collapse situation is a well stocked seed bank.


You don't need anything except potatoes and fast-growing greens to survive. Grain and rice are too labor-intensive and generally require a functioning economy.

(And if you don't have guns and ammo, you'll be immediately robbed by those who do)


>Anyone have a good source for that number?

You can get close with a few ETFs: US market and bonds, Ex-US global market and bonds:

http://www.pragcap.com/a-simple-four-fund-global-financial-a...


Those are ways to invest in that total number. I already do that. I mean an information source for the total valuation of the world's stock markets on a monthly basis at least.


I am betting on Bitcoin market cap (roughly, adoption rate, for any reason) to grow faster than the total number of Bitcoins in circulation (which is growing logarithmically and capped by 21 million)


> government retirement schemes

This is your weekly public service announcement.

Social Security is not an investment, it is an insurance. The goal of Social Security is not to make everyone rich but to keep anyone from being destitute.

This has been your weekly public service announcement.


My goal is not to make myself rich, but to put some funds somewhere they can't be seized, being accessible only by me. I am using a scrypt brainwallet for that (all precautions taken, with paranoid scrypt settings).

I am not aiming for becoming very rich for that — my goal is personal security. But thank you for your concern.


This depends on your government and its pension schemes - the UK operates both a minimum pension and a state-run contributory scheme.


Is this for the speculation of the value increasing, or tied to another reason? You're of course aware of the potential value increase and how that benefits you?


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)

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

Talent runs in the family.


Talent, or money?


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.


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


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


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


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.


>I hold some BTC, and am looking to diversify into ZCash.

Diversify into some non-monopoly assets too.


Too bad for him the future is in Dogecoin.


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


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


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


"Your video will play in ..."

Really? My video?


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




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