Cryptocurrency |OT| Nothing from Money

#1
There was interest expressed in a few threads for an official thread to discuss all things cryptocurrency. So here it is. Nothing here is a recommendation to buy anything, and some of it could be wrong, but I hope not! Invest at your own risk. I will try to keep this OP updated and to correct any misinformation I have unintentionally provided in any of the below. As far as I'm concerned, you may discuss any form of cryptocurrency in this thread.

If you read nothing else in this OP, read this article before investing in cryptocurrency: https://blog.chain.com/a-letter-to-jamie-dimon-de89d417cb80. It provides an excellent explanation in easy to understand terms about what cryptocurrencies are, what they're good for, and what they're not good for. You also might be able to take away a few ideas on how to assign a value to crypto projects. Very highly recommended.

What is Cryptocurrency?

From Wikipedia:

A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency. Cryptocurrencies are a subset of alternative currencies, or specifically of digital currencies.
Current cryptocurrency implementations rely on some form of a technology called blockchain.

From Wikipedia again:
A blockchain is a distributed database that is used to maintain a continuously growing list of records, called blocks. Each block contains a timestamp and a link to a previous block. A blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. By design, blockchains are inherently resistant to modification of the data. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network. Functionally, a blockchain can serve as "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. The ledger itself can also be programmed to trigger transactions automatically.
A creator of a cryptocurrency effectively attempts to create a system, using blockchain, whereby creation and transfer of all units of the cryptocurrency is strictly controlled and traceable. In theory, if implemented without bugs or exploits, this prevents anyone from just printing more of the cryptocurrency themselves, or stealing any from anyone.

Some cryptocurrencies start off with a finite pool of units of the currency (or "coins"), and then allow more to be created according to a set formula over time. Some cryptocurrencies distribute new coins to participants in the blockchain called miners. Blocks for the blockchain need to be continuously created and may be "mined" by computers running the mining software for a particular blockchain. This is called proof-of-work. Anyone can do this, but the act of mining is cryptographically complex, time-consuming, and uses a lot of power. The rewards for mining also typically are reduced over time to control inflation of the cryptocurrency. For mature blockchains, the rewards may be insufficient to warrant building new dedicated mining computers anymore. For these reasons, research is being done on alternative methods to proof-of-work.

An alternative approach is called proof-of-stake. One version of proof-of-stake requires coin holders to dedicate their units of the cryptocurrency to be used for block creation and verification. This works by using a stake of coins to sign the new block. Stakes of coins can be randomly selected for signing blocks by a weighting given to coins that have the oldest stake time without having been used to sign. Holders of a stake that was used to sign a block can then be rewarded with some of the cryptocurrency.

For proof-of-work, there may also be a transaction cost, sometimes called "gas". In order for a transaction to be performed on the blockchain, a portion of the cryptocurrency transferred will be allocated to the miners who will be calculating the new block. By varying the amount of gas a sender of cryptocurrency is willing to give, miners may prioritize that transfer ahead of others that offer less gas, thus allowing the transfer to jump to the head of the line and get processed more quickly.

Examples of Cryptocurrencies

There are many different active cryptocurrencies, the most notable being Bitcoin, Ethereum, Ripple, Dash, Litecoin, Monero, and Zcash. Anything that isn't Bitcoin is sometimes referred to as an altcoin.

Another trend is the emergence of token standards. In the case of Ethereum, there is the ERC20 token standard which allows for new ERC20-based cryptocurrencies to be built on the Ethereum blockchain. Examples are BAT and Kin.

This Sounds Crazy, Why Would I Put Real Money in This?

Cryptocurrency is still new as a concept, and is quite risky. In theory, a handful of cryptocurrencies could supplement or replace existing fiat currencies in the future, due to a few advantages, namely: strict control over creation/destruction; tracking usage; anonymity for some blockchains, and no anonymity for others; easy transfers all over the world with low transaction costs and much higher speeds compared to bank wire transfers. Some blockchains also allow for additional functionality other than just use as a currency. For example, Ethereum, and others, allow for something called smart contracts which effectively means your money can become programmable. You could also create whole layers of applications on top of this to create all sorts of unexpected and advantageous benefits. In the case of Ethereum, many companies have joined the Enterprise Ethereum Alliance to explore a multitude of applications for the blockchain. In theory, entire existing financial systems could ultimately be replaced by and run on some form of blockchain. Because of all this, there is considerable active speculation in cryptocurrencies, with prices increasing for those with the highest perceived potential. That also means bubbles are likely forming everywhere. There is money to be made, but also lost.

A good intro to Ethereum is available here: https://blog.coinbase.com/a-beginners-guide-to-ethereum-46dd486ceecf

While some coins are legit and being developed by large communities, others are created to make a quick buck from early investors before vanishing. Any new cryptocurrency has the potential to be a scam, so lots of due diligence should be performed before buying in.

A cryptocurrency only has value if other people are willing to trade for it. If interest or confidence in a cryptocurrency is lost, any value in that cryptocurrency could disappear almost instantly.

How Do I Get Some?

The easiest way to get cryptocurrency is to buy it from an exchange. Many exchanges have appeared over the last few years. Here is a list of some:

Coinbase or GDAX
Kraken
Poloniex
Gemini
Bitfinex
Bitstamp
Bittrex
OKCoin
CEX.IO

In order to trade on an exchange, you typically have to verify your identity and/or your bank account. There are a few exchanges that may allow you to buy with a credit card, but most want money transfers or wires. Each exchange will provide their own instructions for this. As interest in cryptocurrency grows, the time to get verified has increased from a few minutes, to days and weeks in some cases.

For new cryptocurrencies, you can also participate in an Initial Coin Offering (ICO), which is an unregulated way that funds are raised for a new cryptocurrency. Rules for the ICO for a given coin are posted in advance on the website for that coin, together with instructions on how to participate. Typically, at least a few smaller exchanges list the new coin immediately after the ICO, and larger exchanges may add it over time if it becomes popular.

How Do I Store It?

While you can leave all of your cryptocurrency on an exchange, that is not recommended unless you want to day trade and accept the risks. It's always possible that an exchange could be hacked or cease operating for a variety of reasons. As soon as you hold cryptocurrency on an exchange, it is possible to easily transfer where that cryptocurrency is stored. You can send it to a wallet you have created on another exchange, or to a wallet you have created on a computer or mobile device that you control. The actual cryptocurrency is always stored on the blockchain itself, but the cryptographic keys used to control what happens to that cryptocurrency is what you store in your crypto wallet (or on an exchange).

MyEtherWallet is an online wallet for Ethereum.

Dedicated secure hardware wallets also exist for storing your cryptocurrency, such as:

Ledger Nano S
Trezor
 
#2
First:

DO NOT PUT ANY MONEY INTO MAGICAL FAIRY COINS THAN YOU CAN'T AFFORD TO LOSE


DO NOT PUT ANY MONEY INTO MAGICAL FAIRY COINS THAN YOU CAN'T AFFORD TO LOSE


DO NOT PUT ANY MONEY INTO MAGICAL FAIRY COINS THAN YOU CAN'T AFFORD TO LOSE
This.


Anyway -
Well, I'm way late to the party on this (of course), but I put $150 into stuff, have it spread across like half a dozen different currencies, and seeing how it goes.
 
#4
Subscribing to this...I'm following a couple of crypto threads in different forums/blogs. I'm sad I missed out on the BTC/ETH trains, but maybe I can get in on the next hot stuff...
 
#5
Subscribing to this...I'm following a couple of crypto threads in different forums/blogs. I'm sad I missed out on the BTC/ETH trains, but maybe I can get in on the next hot stuff...
If you want 40000% returns, then yeah you've missed on BTC and ETH, but if you want returns that beat a 6% annual return from a conventional investment, then each of those may still be worth considering.
 
#6
DO NOT PUT ANY MONEY INTO MAGICAL FAIRY COINS THAN YOU CAN'T AFFORD TO LOSE


DO NOT PUT ANY MONEY INTO MAGICAL FAIRY COINS THAN YOU CAN'T AFFORD TO LOSE


DO NOT PUT ANY MONEY INTO MAGICAL FAIRY COINS THAN YOU CAN'T AFFORD TO LOSE

So now that you're only using play money that you wont cry over if lost, I recommend ETH
 

Ikuu

Had his dog run over by Blizzard's CEO
#7
Still plenty of opportunities, my Siacoins are up like 92% since I bought them on the 26th, if only I had bought more.
 
#8
Can you recommend the best places to buy some of these coins for UKgaf please?

Recently signed up and have been verified for Coinfloor for BTC trading, would appreciate any recommendations for other currencies please

Thanks!
 
#9
Still plenty of opportunities, my Siacoins are up like 92% since I bought them on the 26th, if only I had bought more.
I first heard about Ethereum in the fall of 2015, started considering it near the end of 2016, but only finally bought some in May 2017. I could have retired already if I had been a bit more bold. I also might have panic-sold at any point between then and now, and might now really be upset with myself. As it is, I'm only up 100%. Realistically, I needed that time to get to this point, so I'm not mad at myself. Best to be happy with what piece you've been able to get, as opposed to missing the boat completely.
 
#12
What's driving Groestl coins growth. I mean there seems to be growth across the board, but I'm curious as I saw it on quite a few investors to watch lists.

Just that it's Asic resistance?

I'm having a hard time appreciating the differences between some of these alt coins.

I'd like to get in on the ground level of some of these, maybe throw a small amount in here or there, perhaps mine them while the rewards per block are solid. But I'm just not as well versed as I'd like.

I get the "benefits" of stuff like Monero and why that seperate itself. But alot of these other coins just seem to be riding the wave for no particular reason.

I've been mining almost exclusively ETH on Nice Hash so far. Likely going to switch to mine them for myself tonight.
 
#13
Can you recommend the best places to buy some of these coins for UKgaf please?

Recently signed up and have been verified for Coinfloor for BTC trading, would appreciate any recommendations for other currencies please

Thanks!
Depends what coins you want/interested in.
 
#15
Thank you so much for creating this thread!!!! Going to purchase some BTC this week and invest it in some altcoins after I have researched some. Looking at Ripple right now.
 
#17
FCT and SJCX both seem to have already popped a lot already. GNT seems to not have yet, but it's unclear if/when it might pop. Any of these that you'd recommend most near-term?

How about Stellar (STR)?
The coins I listed all have potential for 100%+ growth in the short term, and since they've already had some growth, may not be quite as risky as others. 10000% growth from penny altcoins is much harder to predict. If I could do that, I'd be retired already. :)

Ethereum is still my preferred investment right now. Getting a 1000% return on ETH over the next few years would not be a surprise. It would still be awesome though.

I don't know anything about Stellar.
 
#19
The coins I listed all have potential for 100%+ growth in the short term, and since they've already had some growth, may not be quite as risky as others. 10000% growth from penny altcoins is much harder to predict. If I could do that, I'd be retired already. :)

Ethereum is still my preferred investment right now. Getting a 1000% return on ETH over the next few years would not be a surprise. It would still be awesome though.

I don't know anything about Stellar.
Getting a good vibe from GNT ---- have my eye on STR as well
 
#21
Getting a good vibe from GNT ---- have my eye on STR as well
You also have to consider that at some point the whole altcoin market will collapse. I believe this is a near-certainty. While this won't happen tomorrow, it will become increasingly likely over the next year or two as the mainstream becomes more aware of this form of trading. Whenever that happens, only the most fundamentally-sound coins will survive. I believe Ethereum can survive a collapse like that in the market generally. I don't think too many others will be able to manage. So always keep that in mind when trading in crypto. If the fundamentals aren't there after big gains, consider getting out or reducing your position.
 
#22
You also have to consider that at some point the whole altcoin market will collapse. I believe this is a near-certainty. While this won't happen tomorrow, it will become increasingly likely over the next year or two as the mainstream becomes more aware of this form of trading. Whenever that happens, only the most fundamentally-sound coins will survive. I believe Ethereum can survive a collapse like that in the market generally. I don't think too many others will be able to manage. So always keep that in mind when trading in crypto. If the fundamentals aren't there after big gains, consider getting out or reducing your position.
Sound advice --- yes, I already got burnt on Quark coin back in 2013. Rode a an $11K gamble down to under $200. Waited 4 years for it to finally rise from the ashes and I cashed out with about 50% of my original total. I had written the whole amount off as a loss, so it's all funny munny to me now until I cash out. Hoping to make some better choices this time around, but I don't plan on sticking around too long if I catch a wave upward on these small altcoins.
 
#23
If the fundamentals aren't there after big gains, consider getting out or reducing your position.
And also convert any remaining crypto you have to a more reliable one if you can't cash out quick enough. It's important to look at how much trading volume there is at the exchange you are holding or trading the crypto.
 
#24
My best investment over the last few weeks has been STRATIS by far. I think they still have some potential in the long run. I just wish i had bought them a few days earlier. But thats always the story with cryptocurrency...
 
#25
What's driving Groestl coins growth. I mean there seems to be growth across the board, but I'm curious as I saw it on quite a few investors to watch lists.

Just that it's Asic resistance?

I'm having a hard time appreciating the differences between some of these alt coins.

I'd like to get in on the ground level of some of these, maybe throw a small amount in here or there, perhaps mine them while the rewards per block are solid. But I'm just not as well versed as I'd like.

I get the "benefits" of stuff like Monero and why that seperate itself. But alot of these other coins just seem to be riding the wave for no particular reason.

I've been mining almost exclusively ETH on Nice Hash so far. Likely going to switch to mine them for myself tonight.
Thoughts. Can anyone help me to understand what features to look for, what has interest right now in good ways? What about mining these lower level coins like XBY while the block returns are high?

Or am I just better off mining ETH and buying coins?
 
#26
I keep seeing a lot of inconsistency with regards to selling fast, or holding for a long time. I plan on purchasing a lot of cheap altcoins and sitting on them until they hopefully rise, while investing in ETH and Ripple. If I lose on any of the Altcoins, it's chump change that I would have spent on a few cups of coffee somewhere. I'll research heavily, but I'm more focused on taking risks with smaller coins across the board than pumping and dumping so easily (Unless a substantial profit is there). Am I wrong for looking at it this way?
 
#27
I keep seeing a lot of inconsistency with regards to selling fast, or holding for a long time. I plan on purchasing a lot of cheap altcoins and sitting on them until they hopefully rise, while investing in ETH and Ripple. If I lose on any of the Altcoins, it's chump change that I would have spent on a few cups of coffee somewhere. I'll research heavily, but I'm more focused on taking risks with smaller coins across the board than pumping and dumping so easily (Unless a substantial profit is there). Am I wrong for looking at it this way?
Trading vs Holding basically.

I'm of the opinion that you have to be insane to try and daytrade this market. It's highly susceptible to manipulation and nobody has a clue what moves coin prices besides news. Your strategy is as good and legit as anyone else's. I personally think ETHER is the way to go for long term though. A lot of people are saying it's Bitcoin circa 2013 when it just hit the low triple digits before it really exploded.

My general opinion is that you try and find one golden goose and then off that golden goose when it hits it big, you can sacrifice some of your holdings on random speculative penny coins. For me it's Ethereum. I got in when it was $~20 and I have enough that I can throw around 0.5 ether here, 1 ether there on some coins between $0.05 cents and $2.

I liquidated about 4 ether today to exchange it for FCT which I like a lot and has similar levels of corporate backing as ETH (Bill Gates is into FCT).
 
#35
Trading vs Holding basically.

I'm of the opinion that you have to be insane to try and daytrade this market. It's highly susceptible to manipulation and nobody has a clue what moves coin prices besides news. Your strategy is as good and legit as anyone else's. I personally think ETHER is the way to go for long term though. A lot of people are saying it's Bitcoin circa 2013 when it just hit the low triple digits before it really exploded.

My general opinion is that you try and find one golden goose and then off that golden goose when it hits it big, you can sacrifice some of your holdings on random speculative penny coins. For me it's Ethereum. I got in when it was $~20 and I have enough that I can throw around 0.5 ether here, 1 ether there on some coins between $0.05 cents and $2.

I liquidated about 4 ether today to exchange it for FCT which I like a lot and has similar levels of corporate backing as ETH (Bill Gates is into FCT).
That's a good route to take. I plan on taking some of the funds I earn from penny coins to invest in LTC or ETH.
 
#40
Seems like the current market is so volatile and with new coins coming around all the time that are at a penny or less, you could just toss a small amount into a handful as a gamble, and make a larger safer investment into Eth for less risky money.

I'm really annoyed at myself though because I had been eyeing eth a year ago and getting into the market back then, but I had so much other stuff going on that I forgot about it.
 
#49
Appreciate the OP. Question. I'm just getting started into this whole cryptocurrency and I don't have a whole lot of money to work with. Is it better to slowly invest into something like Bitcoin even if the price is where it's at (ex. Depositing $500-1k at a time) enough got a coin or twos worth and then invest a couple hundred into others (Eth, siacoin, LTC, Stratis)?

I don't have much money to invest as I should but I figure it's now or never ya know