Why This Computer Scientist Says All Cryptocurrency Should “Die in a Fire”

[virtusa]

How about if someone bought just yesterday below current price.

The chart I posted shows clearly how much money was lost. That loss has to be taken by somebody, it will not just disappear.
I also proof with that chart that all buyers between dec 2020 and today bought at a higher price than the actual price, so all of them lost money.

Nonsense. Again you are treating crypto different.

No, I don't see any difference between crypto's and stocks or any other investment. If you buy and the price goes down, you lose money, even if you don't sell. You have to recover that loss before you can make money.
But there is one huge difference between crypto's and the rest: there is nothing backing up the "value" of crypto's. The value is just what somebody wants to pay for it. If tomorrow nobody wants to buy crypto's anymore you are left with thin air.
If tomorrow nobody wants to buy stock's anymore you can liquidate the company an sell the assets of that company to recover some money.

The fact that you let a 10 times profit skip and let it disappear completely shows that you have no clue about making money.

 

[virtusa]

I haven't even finished putting on a position yet, so the last thing I'm thinking about is if I'm up, down, flat etc. When the market tanks, I don't think "should I bail out?". I think, "Should I buy more at this level or wait for the possibility of buying at an even lower price." I've literally been sitting on my hands for months contemplating the same question.

Each person has the right to do like he wish. And future will tell which strategy was the best.
There are examples of people that got rich by not giving up. But they are very rare, the majority had finally to take a loss.
There are far more examples of people who take small losses, get out and try again at a better price.
The final aim is to make money. You invested about 105K and the actual value is about 42.7K. You have to make 146% profit on the actual value of your investments just to get break even. So prices should go 2.45 times higher.
You cannot deny that you are far away from profitable investing at this moment.

I put stops, so I never have to recover big losses on a much smaller capital base (which is very difficult and sometimes even impossible). I never have a 30% drawdown, not on any single trade and also not on my total invested money. So while you are sitting for months on a big loss and can do nothing, I trade and make money to recover small losses and make profits.

This shows the problem of escalating/building up losses.

 

[virtusa]

A trade or investment. No profit or loss till trade is closed.

Same when in a paper profit. Don't count your chickens till they hatch.

Why is the concept hard to understand?

I use that concept. But only for PROFITABLE trades. I once did it for a losing trade and my account was wiped out. I was lucky as I lost no money. I did not take a loss because I never gave a sell order. (to be sure you understand I will add that I was sarcastic about that loss.)

My broker did close the position, not me.

Are you sure you understand the concept correctly? Maybe reread it where you found it; or check who wrote it... there are a lot of gurus on the internet.

 

[VicBee]

You buy and the price goes down, you lose money, even if you don't sell. You have to recover that loss before you can make money.

reminds me of the same discussion I had not so long ago with the nearly same group, and I had the same position as SunTrader. But the quote above makes me clearly see your perspective, so thanks virtusa!
The only remaining counter argument I can think of is that for an investor nothing is gained or lost until the instrument is sold, while for a trader the buy and sell frequency blurs the result until at some point in time a line is drawn to determine if all this trading amounts to a gain or a loss.
In effect, the investor's action is an ultra slow motion of the trader's.

 

[Frederick Foresight]

If you have an asset that is 90% down, try to go to a bank and use it as a collateral valued at the purchase price

That was the next point I wanted to bring up.

 

[SunTrader]

Hope you wrote that tongue-in-cheek because that line of thinking is only used by losers and scammers.
If you have an asset that is 90% down, try to go to a bank and use it as a collateral valued at the purchase price, tell me if they smirk, laugh or ridicule you.
Everything is mark-to-market.

Again lol it was an EXAMPLE. (A hypothetical example virtusa, I thought making it 10X would make it plainly obvious. Plainly not for some folks.) Geezus.

I never let a trade go against me more than 2%. Period.

 

[MrMuppet]

ES is backed by S&P 500 components, is it not? Ultimately it converts to something real, at least on some level. With cryptos, the only backing is that the other guy also believes it has value, not so different from fiat but crypto bros typically also believe it will be worth tens of trillions any day now, I don't know many who hold USD or EUR and believe it's going to skyrocket and triple in value.

Oh come on, dude, you are better than that and you know it.

Those "but it is backed by" - arguments didn't help anybody to make money ever.
How many companies go up in flames because they are just shit? Yes, they are backed by something, but they could not make it and you've lost all your money.

How many people bought RIBT because "food crisis" hoping that it would go from 20cts to 1$? How is that different to buying a shitcoin hoping for a 5x?
Gold is down YoY although we are in the highest inflation environment of the decade? Backed by what? Gold? Sure, still the bugs are down money and they believed in something that just isn't true: Gold as inflation hedge.

The ES is a derivative and the only thing that keeps it's prices in line with spot is the fact that it is arbed against spot, yet millions of people believe they can make a living daytrading that fking thing if they become "good enough", read orderflow or do TA. It's the biggest religion out there with legions of suckers buying snake oil from educators and service providers.

FX is the exact same, with the only difference being that even lower levels of retail is involved buying courses and trying to turn their 5000$ account into something meaningful.

Crypto has value, because it has utility and people use it. And this is a fact that everyone can verify on chain by just looking at a blockchain explorer. If you don't believe in it, that's completely fine, but facts are facts.

Perhaps it trades above fair value due to speculation but that can be said about any asset. And please don't argue with "but it was supposed to replace fiat and it didn't" or "it's useless for everyday usage", because you know just like everybody else in that space that this narrative is bullshit and only low level gamblers fall for that trap.
ETH is a base layer for almost 8000 smart contracts and protocolls which is like buying a piece of C++ to gamble on more people using it in the future than they are now.
And BTC is the biggest permissionless cross boarder transfer medium which in itself is already huge. If you don't use it or think it has much usability, that's fine. But stop with that "but it's not backed by anything" BS because it has never determined the value of anything

 

[MrMuppet]

A trade or investment. No profit or loss till trade is closed.

Same when in a paper profit. Don't count your chickens till they hatch.

Why is the concept hard to understand?

And deep down, you know that this is crap. There is one thing to withstand volatility in your equity curve, but when you 10x your money and lost it again, you lost money, period.

But by the way guys, the money is not lost, it has been transfered to somebody else. Believe it or not, people are in fact trading this stuff and you can also short it or hedge your exposure with derivatives.

 

[d08]

Crypto has value, because it has utility and people use it. And this is a fact that everyone can verify on chain by just looking at a blockchain explorer. If you don't believe in it, that's completely fine, but facts are facts.

It has some value but the current valuation is a complete joke. I don't know a single person actually using it for transactions. All the interest I've heard is about speculation, that is it.
Of course the truth is most of the transactions are drug dealers and other illegal activities. That's great, it's awesome there's a venue for that but they only use it because they can't use fiat, not because they prefer crypto.

You used some arbitrary company to prove that companies aren't backed by anything. I can also pick thousands which have actual physical land, warehouses, equipment and whatever else to back the shares - physical things that you can touch, use and transfer to others.

It's awesome if cryptos can replace fiat eventually, I'd love to use my funds as I see fit instead of the now status quo of "please sir, can I some of my money" of government oversight.

 

[SunTrader]

For those with comprehension problems here is the original post in question.

"LOL likely $2 trillion of mostly paper losses.

Buy something at 10, it goes to 100, comes back down to 10 and you sell breaking even. You didn't lose $90 of profit. Profit, if any, is only determined ......... once a trade is closed out."

"Buy something ...." Not I bought something. Difference ya know.

+ + +

And in regards to $2 trillion in losses claim. People bought and sold all along the path to cryptos reaching $2 trillion in valuation. Valuation, not profits. If everyone "knew" the top was in, could they all sell and grab that $2 trillion dollars before it vanished? Every single one of them and every single dollar of the $2 trillion? Obviously not.

Minds are fogged over in crypto bashing hysteria. I understand.