Quote from: americanpegasus on August 15, 2015, 02:14:42 AM

Quote from: TPTB_need_war on August 09, 2015, 04:43:43 PM

shizzle

You are a good writer and convincing; I give you that.

I can honestly see it going down like that, as that would be the unthinkable ($100 bitcoin and a collapsed market) only to soar back up again in 2016.

Here's my plan: I'm gonna buy my favorite alt-coin. Then I'm gonna buy some more. And if the price goes down, I will buy even more. And no matter what, I won't sell an asset I believe in just because the price drops.

As a long term trader who doesn't want to play the swings: once your money goes into an economy, it stays there. If you aren't willing to buy an alt-coin for 3 years, don't buy it at all.

Right; seconded. Unless you're a skilled trader - a really skilled trader, and not someone who imagines he is (sigh) - that's the only way to play the speculative-asset game.

I know I'm turning into somewhat of a bore by coming back to this anecdote, but the largest dollar profit I ever made on a gold-exploration penny stock was a company whose stock went nowhere for more than a year after I first bought it. As I said earlier, I could have gone down to visit their project, quizzed each geologist extensively, and examined every rock sample they pulled out of the ground there - and when I went back after that lengthy "sabbatical," I could have bought more at the same price that prevailed when I first got in.

In actual fact, the company was reclaiming an abandoned mine and was proceeding to re-open it. All of this work was going on while the stock price flatlined. I kept my eye on the work, so I was undeterred by the disappointing performance of the stock. In fact, I did buy more at the same price as the work progressed. That's how I landed a big dollar profit when the stock finally "woke up."

That wake-up happened when the company published a Feasibility Study which showed an Internal Rate of Return of >25%. Since gold was rising, and the regs governing Feasibility Studies "recommended" using the average of gold's price over the previous three years, the punters saw the Internal Rate of Return as conservative: lowbally. So, once it was clear that the company's IRR meant it had a good shot to acquire the capital to see the project through, the stock took off.

This analogy, I stipulate, has only limited applicability to cryptocurrencies. In the mining-exploration game, there's a guiding star: turn this here exploration project into a paying mine. That's quite specific. In contrast, the end-game for a cryptocurrency is quite vague. "Using it as real money"...by how many people? For what? As a fiat-alias or as part of a real & growing crypto-economy, in which people make a living without touching fiat? "When it enters the mainstream"...to what extent? Apple-level, Linux-level or Windoze-level? Would entering the mainstream of a stable but non-normal niche (like the Darknet or the underground economy in general) be "mainstream" enough?

The reason for this question-salad is to show that aforementioned vagueness relative to mining exploration. The downside to this vagueness is that waiting for your end-game is going to involve a lot of wandering around in the dark without any "objective" guiding star to guide your path.

But the upside is: there's no way to even forecast the eventual value of a cryptocurrency that succeeds! The specificity of exploration's guiding star - a paying mine - actually limits its upside value. The best you can hope for from an exploration stock is for the underlying company to have a paying mine and generate revenues, profits and a dividend from that mine - and, of course, for the stock market to value its stock accordingly. The very specificity of the guiding star means that the exploration company will never be an Apple and it will never be valued as such. But cryptocurrency's very end-game vagueness means that there's no such value-cap.

Consequently, we have absolutely no idea what Bitcoin, NXT, Monero, HZ, etc. will be worth in ten years. We have no idea of what the upside will turn out to be. All we know is that the downside for any cryptocurrency is zero (i.e., worthless.)

From this perspective, it makes a lot of sense to put together a "Ten Year Buy & Forget" portfolio of at least five but no more than ten quality "old-reliable" cryptocurrencies. Buy those 5-10; put the wallet files and/or the passwords (for brainwallet alts) in a safe or safe-deposit box, and forget about them until 2025. Even if all but one fall to zero, there's a very good chance that the one which doesn't will yield a huge enough profit to make the entire "Buy & Forget Portfolio" yield a huge gain.

I wish I had the $$$ to implement this strategy atm...