Is investing in Crypto just a get rich quick scheme?

[Leo Gura]

8 hours ago, Average Investor said:

@Leo Gura What about taking the earnings from something like this to help create the massive value?

To create massive value you must develop yourself and build the necessary knowledge, expertise, wisdom, and skills.

Just because you make some easy cash fast does not mean you have a clue as to how to use it to create massive value. In fact there will be an inverse relationship there because if you were serious about creating massive value you would not be chasing easy money in the first place.

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Do you just plainly hold cash and not invest?

I'm not saying don't invest your money. But recognize the difference between prudent investing vs gambling and hoping to get rich for nothing.

The truth is that nobody knows the real value of crypto. So you're just gambling. Just because you get lucky does not make it not gambling. Be careful not to fool yourself that you know things which you don't really know.

It's very easy to fool yourself with investing, especially when you're chasing some craze like crypto. You buy into social media hype and get so excited you stop thinking straight.

[LfcCharlie4]

@Leo Gura

Okay, I'm now much more on board with what you're saying, thanks for clearing that up. 

I defo think Investing is something everyone should learn about and do. 

But, as you said developing oneself & LP is the priority! 

[vinc3nc]

10 hours ago, GroovyGuru said:

@vinc3nc Except all the hackers who can break into your wallet and steal it away from you

They can hack you if you're stupid and you dont have a proper wallet. Private key is yours. No one can get to your BTC if you don't give it away.

Edited January 12, 2021 by vinc3nc

[Striving for more]

Crypto is a get rich slow scheme & a get poor quick scheme. 

If you try to get rich quick, you'll get broke quick. 

But don't rely on crypto, you need to increase your income so that you can put more in to it in the first place. 

Do proper research.

Do not trade or use leverage unless you have some experience & can control your emotions. 

Hold for at least a year. You can take partial profits along the way, but don't get afraid when a correction occurs. 

By the way, if you want to learn from the best, I know a very reputable guy.

 

[tsuki]

Traders provide value by prediction. By investing money in a business, you are predicting that this business will fare well in the future. Very few people can do this well and this information is valuable.

The same idea is applicable to (crypto)currencies. By buying bitcoin, you are predicting that it will be more useful than fiat money in the future.

The distinction between genuine trading, get-rich-quick schemes and gambling is based upon the quality of prediction. If you have access to good quality sources, understand cryptocurrency technology, understand financial markets, then you have a shot on predicting this well and making money consistently. If you base your knowledge on crypto digests, then you are basically speculating. If you don't read anything, go by the gut feeling and are lured in by the headlines, then you are gambling.

The problem with cryptocurrencies is adoption. As it stands right now, besides Ethereum, it has very little use outside of store of value. It will not replace fiat money anytime soon, so I think that it is not a good investment. At the very least, not during the corona bubble we're having right now.

Edited January 12, 2021 by tsuki

[LfcCharlie4]

@tsuki Good points regarding education. 

'It has little use outside of store of value.' 

Do you not see how useful this is on it's own though? 

It essentially makes it 'Digital Gold' that is far more accessible and easier to transfer & access etc. 

Also, just be aware 20%+ of all $$ were printed last year & USD isn't even backed by Gold anymore, it's literally crazy that more than 1/5 of ALL Dollars were printed last year. 

I imagine as Inflation rises more & more people will look to Bitcoin & Gold as stores of value, tie that in with FOMO, the fundamentals of Crypto & the adoption of institutional players and you have a recipe for a large Bull market. 

But, who knows, you could be right, I just don't see it. 

 

[tsuki]

@LfcCharlie4 The bubble that is happening right now is a response to corona-related panic and Trump's irresponsible governance. People don't care about printing money nearly as much as they perhaps should, so it is not likely to me that crypto will remain popular when things settle down.

I am aware of its value on its own and I acknowledge that it has the potential to replace fiat money. It is still in very early stages though. When Bitcoin transaction fees rise, it's like $50 for sending any amount of btc. The technology is not nearly as scalable as it should be for widespread adoption. Not to mention that transactions need multiple confirmations before they can be considered safe, and it takes unreasonable amount of time. Remember that most fiat transactions are probably in grocery stores.

Ethereum has some good ideas regarding scalability, and there are new algorithms for cryptographic security that decouple transactions from block creation rate, like proof of history for example. These innovative cryptos however, have no market value because they are too new and under development. I'm guessing that it will take at least 20 years before these problems will be solved. In the meantime, we have the rise of quantum computing that will make cryptography as we know it today, obsolete.

I didn't even mention the possibility of national centralization of proof-of-work cryptos, such as Bitcoin for example. As far as I know, big mining operations are held in China, and I can see the potential that their government would confiscate the farms, making the currency Chinese property if it became too popular. Proof-of-stake algorithms seem more robust in this area, but the transition is just starting to happen with Ethereum 2.0 switching over.

[Striving for more]

1 hour ago, tsuki said:

The distinction between genuine trading, get-rich-quick schemes and gambling is based upon the quality of prediction. If you have access to good quality sources, understand cryptocurrency technology, understand financial markets, then you have a shot on predicting this well and making money consistently.

If you base your knowledge on crypto digests, then you are basically speculating. If you don't read anything, go by the gut feeling and are lured in by the headlines, then you are gambling.

so I think that it is not a good investment. At the very least, not during the corona bubble we're having right now.

Fully agree with the first 2 points. Kind of disagree with the last point. 

If you are learning & getting your predictions from the right sources, not just some clickbait youtuber, then you will succeed. 

But it is always a good time to invest in crypto, because in the long run it's gonna go up

@tsuki Have you not studied the bull cycle & "the halving" ? Because we're beginning a bull cycle right now, the coins are going up & up & up ... 

The halving occured May last year > therefore bitcoin became more scarce as miners have less BTC to sell out. So the price increasing. 

Multiply the cycle with the fact that everyone's terrified of the economy, jobless & wants a way to get some good ROI, the exchanges are getting better, on ramps are so much better than last cycle, so much easier to buy. 

Way more use cases for ETH & DEFI movement. It is the future of money. 

I'm lucky because I get all my information from 1 guy who I know & trust & who is a total expert at all of this stuff. I copy his portfolio & bought his course. The investment has already earnt me back far more than I've spent, & if it weren't for his investing strategy, i'd be in a much worse place right now as all my savings would've been eaten up.

Just keep an open mind but make sure you listen to the right people. I have left out all the youtube hype, I have my guy, I trust him because he is always been right on his predictions year after year, that's what expertise does. 

Edited January 12, 2021 by Striving for more

[Striving for more]

& still I do agree with Leo that crypto should not be an excuse to avoid developing yourself or working hard to build true wealth!

I do not think my investments will make me rich or build sustainable wealth ... But they are helping me have more hope in paying off my debts & moving out & hopefully doing some travelling this year. 

 

[integral]

@GroovyGuru Learn how to scalp, all you needs is a trend line and a oscillator, the bitcoin market volatility is free money. 

[LfcCharlie4]

@tsuki Yeah I agree with most your points. 
 

But I wasn’t talking about BTC becoming a global currency, I was talking about it being a store of value, like Gold, we don’t trade in Gold these days. 
 

when you say “when things settle down” I’m not quite sure what you mean, things in regards to printing money haven’t even started to create the chaos expected. For example, in the UK we have furlough which is the Gov paying people who aren’t working like 80% of their salary, come April (if it ends when it’s supposed to) there will be HUGE a amounts of redundancies & high levels of unemployment, then there is the paying back of all of this money we’ve printed. 
 

If anything, we have a loooooooong way to go before any of this settles down. 
 

So, even in terms of being a digital Gold & reaching similar market caps to gold, you’re looking at 500k all being well, that’s not including if it becomes a globally backed currency, that’s simply as a store of value. 

and like you said regarding ETH, we are still very early days, ETH 2.0 isn’t out yet & that’s not to even mention projects like Cardano & Polkadot. 
 

Imo, this is still the VERY early days of Crypto & things like Covid are simply accelerating this bull run, but not the cause of it. Institutional buying is what differs this to 2017, it’s not simply retail buyers causing the hype. 
 

For example we had a 25% correction yesterday & its back up to $34kish today. 
 

This seems more like the healthy correction that was needed to stabilise, allow “Alt season” to start before another few big runs. 
 

But, yeah I wouldn’t solely depend on crypto as an investor, most important thing is developing your own income first & foremost imo. 

[Average Investor]

6 hours ago, Leo Gura said:

To create massive value you must develop yourself and build the necessary knowledge, expertise, wisdom, and skills.

It's getting there. I spend most of my time working on that now. 

6 hours ago, Leo Gura said:

Just because you make some easy cash fast does not mean you have a clue as to how to use it to create massive value. In fact there will be an inverse relationship there because if you were serious about creating massive value you would not be chasing easy money in the first place

Yeah, I can totally see that. I am going to keep working to align myself with that more. 

6 hours ago, Leo Gura said:

I'm not saying don't invest your money. But recognize the difference between prudent investing vs gambling and hoping to get rich for nothing.

The truth is that nobody knows the real value of crypto. So you're just gambling. Just because you get lucky does not make it not gambling. Be careful not to fool yourself that you know things which you don't really know.

It's very easy to fool yourself with investing, especially when you're chasing some craze like crypto. You buy into social media hype and get so excited you stop thinking straight.

I appreciate your clarification. I have seen you post on the topic a bit and this resonates with me. 

I'll take what you said and reflect on it more. I can see how a lot of this stuff still clogs my mind even while trying to take a more prudent approach. 

[NikoleJennes]

I still can`t trust bitcon for full.. I don`t even know why. 
I think that I will invest in something my own 

[Average Investor]

@LfcCharlie4

Those are some good points. 

Mostly where I am coming from is just how much of my time and energy is it taking. Stocks and all that really don't help me be mindful as much. As it can be fun it is a lot for my mind at least. 

I am not saying that I am not thinking long term the crypto market as whole would do well. I was recommending bitcoin at $3-$6k to people for years, shit even when it was under $1,000. I am very reserved and not really that big on promoting the hype. I also think these levels produce much more risk for those who don't really have much idea of how these markets work. A newbie is not going to be able to watch 20% of their holdings disappear in a couple hours. I have watched most of the large bitcoin crashes at this point lol. I just can't recommend it to someone at these levels. I just think the risk and reward is not very favorable and will cause many to lose their money. 

Edited January 12, 2021 by Average Investor

[LfcCharlie4]

@Average Investor

Fair enough mate. Although, I would say situations we find challenging are the perfect opportunity to truly practice mindfulness, if we can only do it on the cushion it isn't worth much right? In fact, the day when the first few 'Enlightened Traders' happens will be quite funny, having that much emtional maturity would be a great help in the markets

Yeah, I understand. To me, this & ETH are still incredibly cheap if you HODL long term, like seeing it go down 25% yesterday just made me want to buy more

 

[Average Investor]

@LfcCharlie4 I have a hard time watching something like Jim Cramer and keeping my mind intact lmao. I watch some market stuff. I like deep analysis of stuff. Everything money on youtube is probably my favorite right now. I usually find small time people who are covering a lot of the thing that I am wanting to invest in. I had one guy I was watching with 100 subs break down SPG a lot and that has done amazing in my IRA. I would define that as a wonderful company.  

I love getting a laugh from crypto daily as well if we are talking crypto. I get some market insight every now and then too. 

I can still see it growing as well. Just the rapid appreciation is what would deter me from wanting to buy any. I actually just hold at this point. I haven't bought anything crypto in years. 

If there is a continued large printing of money, then this possibly will become another asset that companies want to acquire just to stay more hedged against usd. 

Edited January 12, 2021 by Average Investor

[Leo Gura]

13 hours ago, tsuki said:

Traders provide value by prediction.

Lol, keep telling yourself that, parasite.

[tsuki]

2 hours ago, Leo Gura said:

Lol, keep telling yourself that, parasite.

If you're trying to woo me, then it isn't working.

I don't have this figured out, so why don't you share your understanding of what value is?

I think that value is how the mind communicates that something is beneficial for some purpose, mostly survival. Traders back their beliefs about assets with money and create markets with prices. Prices reflect the demand for these assets and quantify current beliefs about them. The more something is believed to be beneficial, the more people want their share of it. 

I'm not entirely clear on the goal of this game to be honest. It is definitely about being ahead of the curve with respect to prediction of prices. Their job is to sell just before everyone else does, so they are incentivised to reveal their information at the correct moment, not too early and not too late.

It's even more complicated with currency exchanges because there is no underlying currency in which value is expressed. It's an exchange of money for money and my brain does not work this way very well. I'm not a trader.

Obviously, money flows from traders that predict badly to ones that predict well. Is this why you are calling it parasitic? Because bad traders are people that have no idea how this works? Or is it because exchanges don't interact with the outside world other than providing rates?

[Leo Gura]

1 hour ago, tsuki said:

Is this why you are calling it parasitic?

It's parasitic because traders don't do any actual creative work, they leech off the labor of others in order to make easy money that would otherwise be impossible to make through creative labor.

See, when you take $1000 and turn it into $1,000,000 via BitCoin, you've just figured out how to turn a few teachers, farmers, and retail clerks into your wages slaves. That is literally what you are doing, but you've masked it as something else so you can sleep well at night.

That's the evil genius of Wall Street as a system. It gives legitimacy to professional thieves and parasites and allows them to sleep well at night as they pat each other on the back.

Thievery in the 21st century has gotten so advanced and sophisticated that even the thieves who spend their entire lives doing it have no awareness that they are in fact thieves -- giving them perfect plausible deniability.

[Yali]

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in order to make easy money

@Leo Gura

Making money in the stock market is not "easy"

?

Edited January 13, 2021 by Yali