Ask HN: I'm late to the crypto currencies boom, what are my options? | Hacker News Reader

Ask HN: I'm late to the crypto currencies boom, what are my options?

43 pointskodisha76 comments

Hi,

5+ years ago I started working for a Life sciences company, and I was pretty stuck in that landscape, doing basically nothing but that.

In retrospect, it was foolish of me not to get some BTC since they were $1 per coin (!!) last time I checked.

I read about new stuff that happened, ETH, and now Filecoin, and i was wondering: what are my options comming this late into the game??

As I understand, small scale mining is dead for years now, so, what is the best investment I could do now?

Thanks for your answers!!

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How people lose their shirts in any market:

- Trying to time the market

- Trying to get rich quick

- Believing that past results indicate future performance

- Making decisions based on emotions (regret, fear of missing out, greed, wishful thinking, etc)

Your comments make it seem as though you're doing at least half of the above, so be very careful.

Also...

> In retrospect, it was foolish of me not to get some BTC since they were $1 per coin (!!) last time I checked.

Everything is obvious in retrospect. Were you also foolish to not buy TSLA in 2011 when it was $30? No, because you didn't know then what you know now: That TSLA reached $350 and BTC reached $3,000. In the same vein, you are not not foolish (uuh..) for not (uuuh...) buying any other cheap investments that did not (oh lord...) grow insanely fast. In other words, you should judge past decisions by the information you had at the time, not by the information you have now.

Totally unrelated - I noticed you use a mailto: as your contact on your website. Do you find that a mailto: works better than a contact form? I personally find links that open applications on my computer to be overly invasive. Does that funnel actually perform better?

I agree it's not optimal but it beats dealing with spam form submissions or creating a form that prevents spam submissions in the first place. I know there are solutions out there, but it hasn't been a priority for me.

My advice would be to stay away from ICOs entirely.

BTC and ETH are the "safest" bets right now. LTC has been really steady and is probably the most sensible investment, but will probably not take off like BTC did.

BCH (Bitcoin cash) is the newest fork of BTC and has been volatile but has a lot of people backing it. I would look it to it at least.

I've been keeping an eye on EOS and DASH but not really sold on them yet.

Biggest advice I can give is - don't let FOMO guide your decisions. Diversify your portfolio and don't micromanage it or keep an eye on the charts all day. You'll drive your self mad.

Also - don't expect to make ANY money of crypto. It's a gamble, like a scratch ticket. Only invest what you can absolutely afford to lose, because chances are you will.

What about GPU mining ETH and others via something like nicehash? Is this a reasonably safe bet (relative to just buying the coins outright)? I'm mostly looking at it as a means of building a new workstation and have it pay for itself over the course of a year or so while I'm not using it.

Unless you are situated next to a hydro electric power station that provides very cheap electricity stay away from this. you will build a rig then as the difficulty goes up you'll watch all your profit eaten away by electricity costs.

Yeah, I was sort of concerned about what 20xx Nvidia cards could end up doing to the difficulty. I'm really only considering it because I'd also use those cards for other things.

A year? the ROI for that would be like 5 years - you over-estimate the profits currently. It was profitable back in March far more than it is now - the gold rush with mining is over.

Based on my electricity costs it looked like it should be a little over 8 cents an hour for a ~$500 GPU, but I could've had something wrong there.

Sure, but how much crypto currency are you going to get out of it from a pool? if you get 8.1 cents per hour, well that's not exactly that exciting.

I've been a miner for years, and I'd recommend you take a look at your expectation of profit, it is profitable still, but get ready to be disappointed.

If you're going to use the video card anyways, mining will easily cover the electricity cost of mining in most areas, and can be a decent way to cover part of the cost of the card.

That said, I wouldn't buy video cards specifically for mining unless you have access to very cheap (or free) electricity.

What is "cheap" though exactly? In my area, costs vary a lot, between 3.5 and 10.5 cents per KWh

It's profitable at most electricity rates:

https://whattomine.com

I'm not sure about bcash!

Edit: agreed on the token sales, currently. Difficult to get a feel for the price.

Is there a "reputable cryptocurrency" index fund one could buy into?

not that I'm aware of, and they would probably charge high fees.

Personally I target a 60%/30%/10% spread of ETH/BTC/MISC. I use Gemini for ETH/BTC and Kraken for the smaller coins.

My total crypto monthly spending is between 15-25% of my monthly savings budget, FWIW. The rest gets split between a traditional index fund and a regular savings account.

If the whole crypto market burns down tomorrow I'll only be out 15-25% of my total invested savings since I started putting money into crypto, and if it takes off I'll get nice returns but I'm not banking on it.

I invest in crypto because I believe in the tech, not in getting rich off of it. Me putting money into is my vote of confidence and nothing else.

Not directly to the point, but look at this:

"Hedge Funds Investing in Cryptocurrencies ‘Exploding’ – 62 in Pipeline"

https://news.bitcoin.com/hedge-funds-investing-in-cryptocurr...

https://www.iconomi.net/dashboard/#/INDEX Might be what you are looking for

I've been in the crypto space since 2011 and I've seen these bubbles come and go. When people like yourself come into the game though (and this is not an insult) I'm pretty sure the speculative game is just about to end. I don't know when - could bitcoin go to $4, $5, $6, $7k+ sure could happen in even a matter of days, but we're close to the end here IMO.

You can do small scale mining with GPUs and maintain a profit right now - zcash for example is profitable (but very small) so if that is interesting you could experiment there. 1 GPU maybe $400 or something minimal damage if the bubble pops, maybe worst case resell the card for $100 or something - that's a reasonable plan maybe I'd recommend. There are of course other more risky options.

As others have mentioned - please understand that ICOs are EXTREMELY risky and speculative. Even bitcoin and ethereum which many say are the safest - and I agree - the level of speculation in them is extreme and if you told me that ethereum will drop in value by 80% in the next 2 months, I would not bat an eye.

The level of speculation is extreme - you should realize it because even now you yourself are interested in investing - tons of people like you are doing the same irrespective of any actual intrinsic value. It is the hallmark of a bubble - and we're in the middle of it, but we can't describe with certainty until it is over.

Just don't mortgage the house man, and stay safe.

I actually think staying away was the smartest thing you've done!

I can't think of a worse reason to invest in an asset and market one doesn't understand than fear of missing out.

Do some research on how sketchy some of the big players in the exchange scene are. Look at the "hack" that happened at Bitfinex. Can anyone cash out USD from there? Try and find out who owns Poloniex or where they operate out of. Check out how Bittrex only lists a storefront in a half abandoned strip mall in Las Vegas as their location, and how much the coins traded on that platform have increased in price recently.

How much do you trust a business that won't list a phone number or physical address? And there's no information on who owns or operates the business? And there's no information on how they are licensed to operate? And there's no details on if or how customer funds are held segregated from operating funds?

Don't let greed overcome your better judgement.

I'm not sure you're late. There is still at least one, maybe two orders of magnitude growth possible/likely for BTC/Cryptos in my opinion. It is really easy to make mistakes if you're trading. Buy and hold probably still works, but this whole area is high risk. The most likely scenario, for most, is to buy, at the top of a hype cycle, then get depressed and sell when it falls 60%, only to see it eventually triple again in 3 years. Don't put in more than you can afford to lose. Cryptos are a rollercoaster, and they eat shaky-hands alive.

Personally, I only hold stores of value or smart contract platforms. My reasoning is that successful platform(s) needs to be of a certain size as part of that success and their market cap would need to encompass value. That dictates growth ahead.

For tokens like filecoin, it is far less clear to me how to extrapolate their eventual end-state size, and therefore whether they will be worth anything in a few years. Instead of comparing coin market caps, a better comparison might be per-unit AWS storage costs vs. their storage rates * some risk-adjusted probability of network success. I feel like that's not the comparison people are looking at.

You're right about mining--in almost all cases, unless you have free power, or are an ASIC manufacturer, it is a losing game. If you're a believer, the better play is to buy the coin.

In a gold rush, don't buy gold, sell shovels. Be a developer or buy stock in GPU companies. Don't buy cryptocurrencies.

Except it's not a gold rush. We know exactly how many bitcoins will ever be available. It's a scarce resource. Therefore, it's not unreasonable to buy and hold bitcoin in any amount.

Also, buying stock in GPU companies (putting aside risk of whatever their other business segments are doing, bad management, bad accounting, market risk, etc) implies that you think crypto market caps will expand (if mining is more profitable that imolies price has gone up). If that's true, why not just buy the bitcoin?

Was gold not a scarce resource?

Yes it turned out to be, but did we know it at the time? If you bought gold during the CA gold rush, how did you know there wasn't 50 million tons of it waiting to be dug up? Turns out you would have done just fine buying gold in 1850. Bitcoin's supply is definitely limited.

Is bitcoin a scarce resource? Wasn't it just forked and the money supply doubled?

If all you want to do is earn money, they stay away and put your money in an index fund. Way safer, much better chances of making money. Crypto currencies are not a safe investment, you are not foolish by staying away, many people have lost a lot of money already.

If you are just curious and want to see what it's all about, then bob's your uncle!

Start at the beginning. Read about how Bitcoin works. Learn about the security model and how it differs from traditional banking. Try buying a small amount of coin, putting it into cold storage (paper wallet), then selling it back for USD.

Then when you're comfortable with that basic knowledge, start following the history of Bitcoin and current events. Get a basic understanding of the events of this year. Learn about other cryptos, too. You might not have an opinion about any of it, or you might.

Earlier this year I was trying to explain Bitcoin to a friend of mine and he expressed the common sentiment, "I wish I had gotten in sooner." That was when Bitcoin was $1,200. Now it's trading at over $3,400. In the 1930s, people were saying the same thing about Coca-Cola stocks: I should have bought them in 1918. Nobody can predict the future. Investing is nothing but learning and applying what you learn. If you understand and like something, invest what you can afford. If not, don't.

There will be a lot of people who will lose a lot of money in that space soon. I would advice staying away.

> investment

Invest your time into learning to have common sense.

Cryptocurrencies are highly volatile, unsafe speculation objects.

If crypto-currencies really succeed, they're going to be worth a lot more than they are currently. They're still a really tiny market. For comparison, Bitcoin is ~60 billion USD and all the gold ever mined would be worth trillions.

Don't look at it like a get rich quick scheme. Think of it as an asset class you invest in. Set aside what you can each month and buy a basket of currencies.

Become educated about coins and get a sense of what real market innovation and real teams look like. There's a lot of scams out there. Most ICOs are scams in my opinion.

If you're looking for a coin to get into that's relatively new but has a lot of potential, my bet is Filecoin.

First, fill up your portfolio for lower risk categories.

Don't make high risk investments until you have met your quota for investments that will pay predictable returns for any event short of the end of civilization, those that will pay predictable returns whenever the market hasn't just unexpectedly crashed within the last few months, those with a solid business model and a relatively secure customer base, and those that look promising and might just get lucky one day in the future.

If you have a dollar that you could burn to ashes just for fun, you can spend that one on cryptocurrency speculation.

That's gambling money. If you feel lucky, you can try to pick winners, but if you want to win in the long run, you'll need to just buy some of each one. Just weight your purchases by the estimated market cap of each individual currency. You'll end up with mostly Bitcoin, Ethereum, and Litecoin, and a little bit of everything else. Rebalance occasionally.

For purposes of your future planning, just pretend that the value in your crypto portfolio is $0. Anything you put into it can drop to zero overnight, if a hacking/looting scandal breaks on the news right after you go to sleep. You're only allowed to count gains when you actually take them out of the crypto ecosystem and put them into some other asset class.

It's still early. Had you bought at $1 or even $0.01, would you have really held until $3500? At $40 you would have had decided whether to sell or not, then again at $200, and at $600, and at $400, and then at $1000, etc. I think people like to gloss over all those difficult compounding decisions about whether sell or hodl.

On another note, seeing these as assets that merely store value for speculation may be a shallow view. However, it may be the case today. Long-term, the industry is betting that there are far deeper drivers of utility that will be unearthed in the next couple of years. This is where the real value can be captured and where fortunes may be made. Thinking about "what currency should I make a quick buck off of" misses a lot of the potential.

Here's a reading list: https://medium.com/@dwr/digital-currency-reading-list-6219f1...

The crypto coin phenomenon feels a lot like the dotcom bubble of the 90s. You have to look back at that and say there was a lot of hype and a lot of bad predictions/investments, but there was also a leap forward in tech.

The blockchain is going to change how things happen in peoples daily lives in the same way that TCP/IP does now (Everybody uses it, next to nobody knows/cares about it).

The million dollar question is really which company do you back? Which is the next Google?

Blockchain technology is still in its infancy, I'd recommend researching the top coins/companies. Look at what they are offering, what problems are they solving, are they making the world a better place, do they have the team to make that happen?

95% of the coins out there, to my research, are garbage and little more than a scam. But I like those that are actually backed by a team and institutional investment (i.e. Ripple).

I too am late to the boom but I also don't see cryptocurrencies as investment vehicles per se. I wouldn't go out and buy any BTC, ETH or LTC just to hold and hope it increases in value. What I am doing, though, is starting to do some automated trading around cryptocurrencies. By taking advantage of the fact there is high volatility and the ability to buy partial coins, I look to make money on the movement of ETH/BTC/LTC.

Now I'm not an idiot. I know it is risky which is why I'm only putting in a small amount I know I'm comfortable losing. I also look at this as a technical challenge as well since I'm building the entire platform in Elixir. It's a win-win. If I make money then I'm happy. If I lose the little I put in I get bummed but then will have a large production Elixir application in my name that I could talk about in the future.

When I got in at ~$150/BTC I thought I was late because the last time I looked was < $0.10, & even so I was able to profit enough to perma-grin for weeks. However after having a better look at the landscape I'm not what could be called 'bullish' by any means. I've since decided BTC-type tokens are inately inferior to 'smart contract'-types. I've also developed a personal opinion that distributed computing-types will come to outshine the rest. I've been lurking & watching MaidSafe from before they rewrote everything in rust, & to me at least it's what seems most promising long-term. In the meantime I don't spend my money on speculation, since I already got lucky when BTC hit $1k that first time & I don't want to press my luck.

I second the buy a fixed USD per two weeks / month. I kick myself for a lot of btc miscalculation (love my 20ish btc t-shirt) but that one has at least left me with a sizable (but less than 10x) return on average if I liquidated right now, rather than nothing if I just stayed away. I also figured the price would improve after the halving day last year since the supply of new bitcoin would go down, it did, so since I think bitcoin can last at least until 2020 (next halving) as the biggest cryptocurrency I figure buying more now is fine too. What other easy-to-buy asset offers the same chance at 2x+ over 3 years? I still put most spare income into an index fund with the conservative 5%/yr target that lets you retire when 4% meets cost of living, but if bitcoin keeps growing I'll soon have more in that...

Small scale mining is not so much dead as on the edge of profitability.

I have two graphics cards, I started mining ether about two weeks ago. I have about 0.2Eth now. This is not a huge amount, but over a few more weeks I intend to get a few more cards and build up to holding a few ETH and a few ZEC. I may mine other currencies if they become profitable, but will likely sell any gains for ETH immediately.

It's not exactly a time of bonanza AFAICT, but if you just want to get and hold a few things you can still do it.

I too regret not sinking £50 into BTC when it last plummeted into the $0.5 USD range, just to speculate, which I was considering... But them's the breaks.

--edit-- I'm not claiming this is a profitable way to operate! It's just what I'm doing to get my hands on some smallish quantities of the currencies.

The best thing about Cryptocurrencies is you still can buy $50 worth. Sure 1/700 of a bitcoin isn't much, but it's far more approachable compared to some other investment vehicles like a share of Amazon. Wasn't it Mcaffe saying that Bitcoin would break $500k[1]? So like $50 now is a stake in seeing Mcaffe "eat his dick" or you have a 142x return on your investment.

[1]https://cointelegraph.com/news/mcafee-stakes-his-name-10-mln...

I'm not sure that's the best thing...

The best strategy for small investors would be to purchase bitcoin monthly for a fixed amount of fiat (say 100 USD) and hold it. It'll come in handy when USD goes bust (come april 2018)

Actually, that sounds reasonable. Thanks.

Any prediction on what "new" currency could emerge, or will it be only ETH and bTC?

Most coins are now BTC imitators with some slight variation. ETH is tiring complete and is aimed at smart contracts, however the supply of ETH is relatively unlimited, unlike BTC which has a fixed amount.

Alt coins vary things like total number of coins or block rate and others look to improve aspects of BTC such as anonymity (Zcash and Monero) it's worth looking at the tech behind them to see whether you think it is worth investing in.

Many early coins such as PPC and NVC are essentially scams but something like NMC was trying to do something genuinely new, although the last I heard a serious security flaw existed in NMC which if it was widely understood should mean the death of the coin because it is no longer being developed as it is mainly a speculative vehicle it has stayed alive.

I think you mean mean ETH is turing complete :) Awesome typo.

XRP I think is another one to keep an eye on. It's the only other one I hold besides BTC/ETH. It's the 3rd largest behind the two and is targeted to FinTech, which is a nice industry to be involved in (if successful). The risk is whether or not they can overcome barriers to entry (which is pretty high in finance).

Why will the USD go bust in April 2018?

There are so many news theories for that every year that it's hard to keep track of. I'd also be interested in what's the newest one.

AKA Dollar cost averaging (https://en.wikipedia.org/wiki/Dollar_cost_averaging), which is the superior strategy if you don't know what you're doing.

Personally, I am a fan of Buffett's "Circle of Competence" theory. Until I have a firm grasp of concepts I am not buying anything because someone says so.

So when my relatives kept bugging me about this crypto-thing, I have been reading up and writing small layman blog entries for them. Something in the vein of ELIF.

Once I have a firm grasp of concepts then I might decide whether to buy or not.

Just get funds you can comfortably afford into Ethereum and Bitcoin, rather than sitting on the sidelines effectively trying to time the market. You might not get 1000x returns but you will kick yourself if Eth goes to even just 1k, which it very well could in the short term (it could also retrace to $90, who knows)

This is what Goldman is telling its clients -

https://www.bloomberg.com/news/articles/2017-08-09/here-s-wh...

IOTA might be interesting to look at

How tested is the tech? It uses tangles instead of a blockchain, right?

Well, the funny thing is, there are no transaction fees, each time you want to send a transaction, you have to validate 2 other transactions. More transactions on the blockchain in bitcoin results in higher fees/slower transactions, with IOTA it's the complete opposite because more transactions automatically get validated. I still have a lot of reading to do however.

1: Buy Bitcoin, 2: Figure out the next alt-coin (I like ZCash but presently own none of it.), 3: Learn to program Blockchain stuff and become a consultant... 4: Become an alt-coin day trader 5) Mine some alt-coins 6) Be creative the space is still young

Instead of ZCash look into Monero. It's 100% about privacy and that's what a free society needs to grow.

I agree, and I think once monero gets some better wallet solutions, it will be a catalyst.

stay away from 'Cryptos' until after the 4th Turning has commenced by then you won't need it anyway as societies & generations fluctuate forwards/backwards or up and down depending on your perspective. No matter where humans have congregated there is no evidence that they ever sustain any exponential direction as a continuous process. As Professor E.O Wilson has clearly indicated it is unlikely that humans will survive their own phases of infrequent enlightenment and decline into apocryphal ignorance whilst the cosmos continues.

I agree with xsynonym - stay away from ICOs.

If wishes were horses... I wish I'd been born 10 years earlier and bought shares in Microsoft and Apple!

There's no way of telling what will work and what won't (and also no way of telling what will continue to work - hence the gamble in any sort of investment).

Any investment should be done with as much emotional-detachment as possible - you have to see the investment money as something that won't impact your personal life in the slightest, whether it rises or sinks.

In this case, Bitcoin is a relatively safe buy, with Ethereum as slightly less so. Monero i bleeding edge, but has great potential.

I would read up on as many of the services being offered by the cryptocurrencies (or services) you're interested in as you can, and base your investment on what you perceive to have the biggest impact to their relative industries in the future.

It's the same approach to buying penny stocks, effectively...

UPDATE:

Just to clarify, I do not have access to anything that you might call substantial money, nor do i plan to spend even 1/30 of my monthly income.

I just wonder what could I do if I spend my monthly budget that I dedicated to buying fun steam games and silly hardware (e.g. buying camera lenses even tho I shoot as total amateur 5 times per year)

I was just wandering what can i do if I redirect that small amount of money + utilizing some of my spare time and computers/programming knowledge.

But, as I was saying, I totally missed on the whole field, so I don't even know where to start.

I want to approac this as a developer, maybe write some software, maybe host some trading bots (is that even viable strategy?)

I will NOT spent any money or savings, rest assured, and I really do appreciate your concern! I can tell it was honest!

Being a developer you might enjoy https://cryptotrader.org

Years ago I used an EMA bot & got a feel for what kind of volatility patterns it was good with. Haven't kept up with any of that for years now though.

Does anyone else care about the environmental waste of churning banks of GPUs to "mine" an imaginary asset or is that just me

My advice: popcorn on the sidelines...

For cryptocurrencies the appropriate forum for this is http://reddit.com/r/Buttcoin

(frequented by spectators and speculators)

Any comment on Tezos?

What they're doing is really interesting and solves some of the major problems in crypto (governance and smart contract safety). Now it comes down to shipping, and we all know how hard that can be at times.

Wait for a dip. Market has been way up since Aug 1. Some controversy about Segwit2x could cause some dips in October/November.

just stay away from stuff you do not understand and you'll do just great...

r/Monero. See for yourself.

NEO is a new coin to keep your eye on.

care to explain?

It's a Chinese Ethereum, as best I can tell.

Its a smart contract platform, written in C#, that is based in China. It claims some features that Ethereum doesn't have such as parallel contract execution, smart contract authoring in C#, and instead of general mining, they have an Accountant node which is elected by participants of the network and validates all transactions (similar-ish to DPOS).

Their documentation says that one feature of the Account node is that you can pay them off chain to get your contracts mined for free.

I plan on building and testing NEO this weekend, but it does concern me that the blockchain is developed in China and 'elects' nodes that have full control over the network. It strongly implies that China will make them elect govt. controlled nodes to be accountants, but that could just be me being paranoid.

Their github is here (and not very active): https://github.com/neo-project

I chose not to invest after looking at their code, especially at the quality of their compiler, which is very messy code without any test cases, but I can't help but play around with it in a private network.

just consider the name/handle 'crypto' that should tell you were its heading 5 milliamps of hexadecimal bullshit that is wrapped in numerical magic called algorithms try exchanging it for real food/water or anything among 6 billion humans who have no idea what you are talking about so as long as you live in your internet substitue vacuum reality enjoy your dellusions but don't ask for help/food/water etc when the power goes out! dumb people do dumb things believing in their own ignorance ..

Don't touch this with a 10 foot poll. Read the code yourself and cry.

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