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    Default Bitcoin & Ethereum Continued Climb

    Bitcoin is now just short of $1,500 USD today (May 3, 2017) and Ethereum is closing in on the $100USD (approx. $62+).

    Both digital currencies continue to take off with Ethereum at a much great rate. At the beginning of the year Bitcoin was valued at $985USD. Ethereum at the same time was valued at only around $10.

    Only two weeks ago when Ethereum was trading at $49 the prediction was that it would hit $100 by the end of the year. Two weeks later it is almost there. There are also predictions that Bitcoin will be valued at $500,00 in just over 12 years, 2030!

    These digital currencies continue to amaze me. Certain industries and in particular online gambling are embracing this new currency. What concerns me is government regulations that will make it difficult accessing funds or eventually banning the currency.

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    Nobody can ban a cryptocurrency. You can not ban bad weather too. Ok,you can,but you can not expect that the ban will be effective. It would have been banned many years ago. I think you still do not understand what is the blockchain.

    Predictions are just something pulled out of ass. It is just fun, like horoscopes, nothing that can be taken seriously. Yes bitcoin can be 500K or 0, or anything in between. Or over that. Ethereum can go to 300 and then to 30 or 3 or 0 if they make another mistake in code or the main preson of ETH is killed. Same for bitcoin. Price of ETH now goes up, because a lot was built on ETH and lot is expected. But yes, blockchain is the technology of future, just we do not know even roughly where it will have sense.

    All cryptocurrencies are on fire. The smaller made even bigger progress than ETH. But I think you are doing another mistake. Cryptocurrency is not currency as money. Some, maybe just the one, yes. The other cryptocurrencies are more like a tokens. It can represent kind of a new class of share. Or something that we can not imagine. But not money. Cryptocurrencies are many assets, very much different put together. They have only thing in common - the blockchain.

    Imagine that someone would talk about electric devices in 19th century. And that they are on fire. He can imagine electric car (right) or locomotive (right). He would talk about electric plane (wrong). Power plant (right). About getting electricity from flashes and storms (wrong) and from ocean waves (right but it will take one century). About electricity in medicine (directly just partially right). About artificial cities deep undergrund (wrong), electric toothbrush (right but not big business). But that is not everything! He would miss radio, tv, computers, electric dildos, online gambling and many other things with highest ROI completely, because it was beyond imagination and also some of those things were invented one after another.

    So this is where we are. Blockchain is the gamechanger, the new multitrillion industry, that has valuation only 40 billion (was 5 billion 2 years ago, and 20 billion 2 months ago). And nobody knows what will be useful and when. Like one could feel it in 1990 with internet, 1970 with computers, 1960 with LSD, 1900 with radioactivity and so on. It will not only change economy. It will change whole society (for both better and worse). It is the direct connection of people without middlemen. But not everywhere. Only where it will have sense. Like technically we can built big intercotinental electric powered airplanes, but they do not make sense (yet). It will be the market, that has to prove, where the sense is.

    So far market verified only one blockchain use and that is blockchain as almost-money. The other blochchains aspire for other uses, but we will yet see if it makes sense.

    One example that will be crystal clear for everyone here: provably fair games. With blockchain and cryptography the casino players can see that the computer game is not rigged. Nice right? We all know the stories how players bitch that the games are rigged, so from now they will not. It is a big change... Oh wait. What if we just think it is a big change? What if casino players are just losers that actually like to have the excuse for their gambling habits. What if they dislike the fact they will lose the excuse and the game will lose the spirit with "provable fair" gaming. Or what if 99.9% of them do not give a ****, so it is better to run the casino game on stupid cheap RNG generator and one database? Only time and market will tell, but many cryptoinvestors think it is a good bet.

    And that is not everything. Market also has to decide what is the optimal security (=costs) of the particular blockchains. Like bitcoin is very secure, some say too much over the necessity. ETH is not so much secure and soon they will make another change, that will make it prbably even less secure (but less costly).

    Decades of trial and error and coming. So yes, predictions are nothing serious. In 1900 many people could predict man on Moon in 1945, 1968, 2017 or never. Looking backwards - probably any estimation could have been right.

    My advice: buy the cryptos. Buy that much you can lose or you want to risk. It even does not have to be a lot. But it changes a lot for your perspective and that perspective will be maybe more important than the valuable bag of bitcoins. After you are hooked, you will be able to do other more informed decisions. It is like with SEO for example. You can read about it a lot, but doing it changes things and only then one truly learns.
    We are all bloodsucking ticks, hungry, devious
    each one latched on to the ass of the previous
    when the last and the first latch on it can be shown
    ass-blood sucked by the first from the last is his own

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    Thanks Sherlock for your explanation. For everything I have read, and I am sure I am not the only one, cryptocurrencies can be very confusing. There is so much information out there often written without a clear explanation. You have done an excellent job explaining cryptocurrencies in the most simple terms.

    You do mention an interesting fact that I was confusing and thinking that the cryptocurrencies is a currency like money. Putting it in perspective as you mention you are trading tokens in exchange for something outside the typical arena of currencies. I started thinking, let’s assume my Bitcoins were worth $1million by 2030, what would I do with that much in this kind of currency, I could never use it all, can’t buy a house or car! Actually, who knows where this will go and what you can do with this currency. This area is so new anything can happen.

    Indeed put as much in as you are willing to lose as you would with any other market based investment. Nothing is guaranteed.

    Thanks again, things are gradually getting clearer.

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    Yes that is a very good way of thinking. One of endless possibilities. 1btc might be 1 M usd, but it could be very hard to exchange it, because there will be a detailed KYC for any dollar and some transactions lie from cryptos might have 99% tax or whatever. (This is just an example.)

    Even today the "value" of bitcoin is 1260 in China, because you can not withdraw bitcoins, 1400 in Russia (btc-e.com), because both fiat and bitcoin banking is slow and has fees, 1600+ on bitfinex, because fiat banking is frozen and finally 1500 on "free market".

    Or another example how cryptocurrencies can be deceiving and the smaller the more they are: the order books are thin. In other words there is not enough liquidity. Even ETH has much less liquidity than BTC. [Side note: only ETH apart of BTC is traded for decent amounts of fiat money (in South Korea). All other altcoins are traded defacto only agaist bitcoins.] So the altcoin richer people are rich only on paper. If they try to sell the altcoins, they would completely crash the market. So the 24 M valuation of bitcoin stands on much stronger legs than 7 M of ETH and that stands on stronger legs than other altcoins. To be fair, this is not just cryptoworld problem. But when we see doubling of cc valuation, we have to consider the thinning of books. Since movements like this (maybe fake) exist: https://www.pumpmycoin.com/ the bubble is near or here. But there is no other way than going through bubbles.

    I have talked now a bit with Ethereum fans. They overlap with fans of another kryptotoken I am buying massively that I did not mention here to avoid responsibility for your potencial loss. The core of Ethereum are smart contracts. It is something that in theory should have a lot of potencial use. The problem is the theory vs reality. There are no smart contracts implemented yet into something that makes money. Unlike bitcoin, which is making money, or creating deals like quasi-money, for years. Ethereum fans I think think that every contract on planet will be replaced by smart contract. In a way it is analogical to hardcore bitcoiners who think that bitcoin will be the only currency and that state fiat currencies will be gone. I think that this is crazy, even if in the end it will happen. Not even smallest part was proven and they are sure it will happen!

    There are other problems, because even if smart contracts will be cost effective and let's imagine land registries in 3rd world countries are real overpriced mess, who can say smart contracts still will be implemented? The chaos, nonflexibility and nepotism (the registries are often private businesses that are being inherited as I painfully learned) are maybe part of the society. The business owners always sponsor/bribe politicians. How should this move on? We all see how hard is it for new pre-blockchain businesses like Uber or Airbnb, that share the decentralisation with blockchains. They are being stopped. Maybe not forever, but maybe for a long time. I can imagine the same thing can happen with smart contracts, because the smart contracts always overcome some powerful institution in the middle. And that institution will fight for any inch of power.

    So I was talking to ETH fans and they are not aware of those problems. What does it mean (if my observation is right)? That only optimism is priced in, the pesimism is not.

    Also: I hope I am not wrong if I think that it is very hard to naked short ETH. Result is: we have the bubble here. But it can grow much further. Until the bad news come and then be prepared for another extreme - bloodbath in pessimism! After that correcion (which still might end higher than current prices) will be more clear what ind of blockchain business is vital and what is just the bullshit.
    We are all bloodsucking ticks, hungry, devious
    each one latched on to the ass of the previous
    when the last and the first latch on it can be shown
    ass-blood sucked by the first from the last is his own

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