FTC Future Question

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In the future there will be no money, everything will be open source. Just like Star Trek.

Until then you can “invest” in alternate currency, like any other development, artwork or antique. That is only partially relevant in enabling it’s widespread use in real life.

Investment potential comes in 2 parts.

Start up - risky
Long term - low risk but stable

One of the genius things about Satoshi’s Bitcoin protocol is that it the network startups are self financing.

It’s even better than you think. Early adopters can not keep all their coins. They need to get coins out and sell many coins cheap. To upgrade their mining rigs or pay the electric.

If all the early adopters kept the coins there would be none to buy. So, Boo Hoo to all the economist who say it won’t work. It already is…

Really, the protocol is much more considered and it’s design as a “self aligning system” that is actually allowing it to cure human interference as it happens. The open source teams developing the software have also kept to that principle.

What you really should be discussing is the extraordinary low price for a dollar?

Kevlar

[quote name=“Egnar” post=“39540” timestamp=“1386164263”]
That isn’t how investing works. FTC is similar (but not the same) as purchasing a stock. At least right now it is while crypto is in its infancy. If the exchange rate were to hit $500 there would need to be demand, which means people constantly buying. If the exchange rate were to hit 500 and everybody stopped buyin and started dumping their FTC you would start to see the price drop significantly in a small amount of time…until the point where people felt it was a good value again and buy orders started to go through. If that ever happened it would mean FTC spiked for some odd reason and was far overvalued - thus a correction would take place.
[/quote]

A commodity is a better example. It’s like purchasing gold.

With a stock, you’re purchasing ownership of a derivative of an asset. You’re entitled to certain rights, including things like dividend payments and sometimes voting rights, and the company can issue more stock at any time, devaluing your investment.

Purchasing crypto-currency is like buying a bar of gold: You’re taking ownership of the asset itself, not a derivative. You have no rights beyond sale of that asset (sending the coins to someone else), and the amount of gold available, baring some new technological breakthrough, will remain pretty constant (constant coin production rate).

Where this analogy breaks down is you can’t transfer a bar of gold over the internet for free, you can’t store it on your hard drive or a paper wallet, you can’t easily divide it up into smaller portions without specific tools, and you can’t keep it in your brain, safe from a thief who breaks into your home.

Therefore, Bitcoins, and more generally cryptocurrencies as an asset class which act like a commodity… may be the most valuable assets that have ever existed.

mnstrcck

Another thing you forgot to mention Kevlar, is that it’s much more easier to verify you have been sold legitimate crypto-currency, as opposed to Gold. Which can be even hard for professionals to distinguish from fakes sometimes:

[url=http://www.youtube.com/watch?v=rOmKCQQz2WA#]FAKE PAMP SUISSE Tungsten Filled Gold Bars found in NYC. Is your gold bullion real?[/url]

Kevlar

[quote name=“mnstrcck” post=“39614” timestamp=“1386181800”]
Another thing you forgot to mention Kevlar, is that it’s much more easier to verify you have been sold legitimate crypto-currency, as opposed to Gold. Which can be even hard for professionals to distinguish from fakes sometimes:

[url=http://www.youtube.com/watch?v=rOmKCQQz2WA#]FAKE PAMP SUISSE Tungsten Filled Gold Bars found in NYC. Is your gold bullion real?[/url]
[/quote]

It’s a great point. All of these things increase utility, which increases valuation. Crypto-currencies are currently INCREDIBLY undervalued.

mnstrcck

Totally off-topic but my feeling is:

1. Bitcoin
2. Second-tier currencies - LTC, PPC, XPM, FTC-ish, etc.
3. Third Tier
4. Shit tier - Shitcoin, Junkcoin, Infinitecoin etc.

The amount of capital that flows into crypto will spread more as it works down the tiers, resulting in grouped valuations within a specific bracket. Ie, $1000 - $100 - $10 - $1. Coins will change tiers as security, pump & dumps, lack of innovation and scandals affect them. Some will die out [although ultimate death is unlikely as long as the network survives] by going below a specific valuation, or dropping tremendously and staying there.

Finally, technological innovation and advancement is 1/3 of the pie. Community and outreach, and adoption are the other 2/3rds. The coins which can be successful at all three will dominate. But - the majority will progress on 2/3rds of the pie.

This is an extreme simplification though, as there’s so many variables that can change things.

I do agree, Crypto is undervalued. We will still see unprecedented growth. Cold storage is recommended.

kris_davison

Cold storage yes or buy while we are in this mini slump.

Egnar

[quote]A commodity is a better example. It’s like purchasing gold.

With a stock, you’re purchasing ownership of a derivative of an asset. You’re entitled to certain rights, including things like dividend payments and sometimes voting rights, and the company can issue more stock at any time, devaluing your investment.

Purchasing crypto-currency is like buying a bar of gold: You’re taking ownership of the asset itself, not a derivative. You have no rights beyond sale of that asset (sending the coins to someone else), and the amount of gold available, baring some new technological breakthrough, will remain pretty constant (constant coin production rate).

Where this analogy breaks down is you can’t transfer a bar of gold over the internet for free, you can’t store it on your hard drive or a paper wallet, you can’t easily divide it up into smaller portions without specific tools, and you can’t keep it in your brain, safe from a thief who breaks into your home.

Therefore, Bitcoins, and more generally cryptocurrencies as an asset class which act like a commodity… may be the most valuable assets that have ever existed.[/quote]
Yes and no - you’re right it probably is more of a commodity like gold on a larger scale, but there really is no difference [between the 3] when you think of it just from a trading perspective to describe how demand works, that’s just word preference.

However, stocks cannot just be “issued”. A company has a finite number of stock. In order to increase the number of actual stock a company has to split the stock, which will increase the number of shares that every single stockholder has. This will decrease the price of the stock but the value remains exactly the same. Stocks may increase/decrease after a split based upon perception [usually there is a positive growth from a stock split as it promotes buying towards newbie investors who look at price rather than p/e and a negative growth after a reverse stock split as it’s usually the sign of poor management]. A company MAY release more of its privately owned stock at any time through a secondary or new public offering but that’s all stock that has always existed - THIS could inadvertently devalue stock as their is now more publicly held stock, but no matter what because no stock can just be “created” you always own the same percentage of a company, no matter what [unless you buy or sell] - This is why many established companies have stock buy-back programs. . They buy back billions of dollars in stock each year, this stock still exists but is no longer public, which usually increases value, due to higher demand and lower supply.

Anyway, like I said - From a basic investors point of view that only knows “buy/sell” it’s all the same thing.

Tuck Fheman

[quote name=“Kevlar” post=“39607” timestamp=“1386180723”]
knowledge
[/quote]
[url=http://tuckfheman.com/post/68999517728/with-a-stock-youre-purchasing-ownership-of-a]http://tuckfheman.com/post/68999517728/with-a-stock-youre-purchasing-ownership-of-a[/url]

[i]salright[/i]?

Kevlar

[quote name=“Tuck Fheman” post=“39662” timestamp=“1386188121”]
[quote author=Kevlar link=topic=5336.msg39607#msg39607 date=1386180723]
knowledge
[/quote]
[url=http://tuckfheman.com/post/68999517728/with-a-stock-youre-purchasing-ownership-of-a]http://tuckfheman.com/post/68999517728/with-a-stock-youre-purchasing-ownership-of-a[/url]

[i]salright[/i]?
[/quote]

As is always. +1 rep for you Tuck.

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