Billionaire Mike Novogratz says 10% of his money is in Bitcoin and Ether
money.cnn.com
money.cnn.com
[1] http://www.hbscny.org/s/1738/cc/index2.aspx?sid=1738&gid=4&p...
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.
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".
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.
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?")
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.
"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").
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).
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.
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.
Not that I'd be willing to research the point with my own money.
I'm still puzzled as to how banks think they're going to do this.
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).
The controversy is over which fork gets to be called Bitcoin.
Something else on the same technology is a different story though.
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.
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.
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.
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.
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.
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.
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.
The lesson is to be impolite? I think I saw this in an episode of Silicon Valley.
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
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 securely send cash across the globe without depositing it into a trusted third party
You cannot program physical cash
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.
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.
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.
There would have be something extraordinary about bitcoin or the way it was represented to society at large that attracted criminals.
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...
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.
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?
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
Problem => Magic => Solution
Realistic view: BTC is used as a speculative hedge, and to evade currency controls in China.
[2] http://rethinkresearch.biz/articles/ibm-samsung-unveil-adept...
in practice you're correct because acting maliciously would make the company lose customers and potentially get sued
following the tendency, he may be a hobo right now.
10% of 100 bucks, probably
(I have much more trust in blockchain than in government retirement schemes).
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?
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.
Can you give an example of a modern economy collapsing and reverting to gold as a medium of exchange?
I don't know that the US federal government is as scary, but it's not unheard of.
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.
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...
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.
(And if you don't have guns and ammo, you'll be immediately robbed by those who do)
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.
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.
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.
I am not aiming for becoming very rich for that — my goal is personal security. But thank you for your concern.
His brother has a TV show too: https://www.wikiwand.com/en/Robert_and_Cortney_Novogratz
Talent runs in the family.
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.
Diversify into some non-monopoly assets too.
Really? My video?