Reasonably safe Crypto funds when traveling.

[redneckrob]

Originally Posted by Franziska

Thanks.

Interesting and yes it seems the initial statement was wrong.

Still, is that not what allmost all financial institutions (banks, life insurances....) do, use their customers money to invest into a lot of different investment possibilities?
By using a lot of different investment types and they mitigate the risk.
I would have been surprised if they just keep all the funds in one big U.S. dollar account.

It says SOME assets carry default risk, not all. Would be interesting to know the percentage.

The primary difference is that they don't generally lie to you and tell you that your deposit is backed by cash when it isn't. And they're regulated to ensure they aren't lying. Clearly that's not the case with the stable coins. Your question is a great one, what percentage and what assets? The problem is that we don't have a reliable way to know that, and even if the company told us what's to say thay aren't simply lying again?

It's a game of musical chairs. At some point the music is going to stop and it's going to collapse. If you're one of the lucky ones who can extract yourself into real money before that happens, you're fine. If not, the whole thing is going to snowball as it's a massive feedback loop with stablecoins driving crypto prices now and causing the bottom to fall out of them if a run of stablecoins ever happens. I don't think that means no-one should be playing in this space, it's just important to understand and not underestimate the risk you're incurring.

[s/v Jedi]

Originally Posted by redneckrob

You said you bought BTC and it became worth more because the Euro suffered inflation. That is simply false, it became worth more because it's highly volatile and you happened to buy it when it was low instead of buying when it was high. You know that to be an objective fact, I have no idea why you keep pretending otherwise? Again, you're better than that!

Also, still curious how you get over the Great Depression lending problem and the paradox of BTCs current high lending interest rates. Again a huge issue that you obviously grasp by your studious attempts to pretend it doesn't exist!

You are twisting my words and using your twist as evidence that I make false statements. It’s shameful and not kind at all and I expect your apologies.

I stated that any change in value is relative to whatever it is compared against. I wrote that btc may have gone up in value or fiat currency went down in value, or both. This is factual, do not try to change what I write by taking one of the three options to fit your point. With your personal attacks, discussion is meaningless and frankly, I am done with you.

[s/v Jedi]

Check this article

[Shanachie]

A cautionary tale:


Many years ago, I was a newspaper reporter assigned to write about white-collar crime and fraud. One of the biggest stories I covered was a company called International Gold Bullion Exchange.


It was the largest dealer in gold and silver investments in the U.S. at the time, with ads in the Wall Street Journal and all of the major newspapers showing the founders standing near a huge open vault filled with precious metals.


IGBE attracted as much as $140 million in investments -- this was back in the early '80s -- with the promise of a guaranteed 30 percent return on investments.


All you had to do to qualify for that return was allow them to keep your precious metals in their vault for safekeeping..


Well, it turned out the founders were taking the money and hiring their friends with huge salaries, throwing cocaine-filled parties and basically doing everything except buying precious metals.


The price of gold and silver eventually went down, and many investors tried to withdraw their money and/or collect their precious metals. But there was a problem.


It turns out that vault was filled with pieces of wood painted gold. And all of the money was gone.


One of the founders was murdered while out on bail. The other did a long stretch in prison. The investors? They were much poorer and a lot wiser.


Stuff happens.

[Lake-Effect]

Originally Posted by s/v Jedi

You are twisting my words and using your twist as evidence that I make false statements. ...

I stated that any change in value is relative to whatever it is compared against. I wrote that btc may have gone up in value or fiat currency went down in value, or both. This is factual....

In fairness, you've said the above, and also

... You don’t get it. You are talking about making money but I am not. I never made money with a BTC purchase. I preserved wealth.

Fluctuations of 40% you mention: that is called volatility and it is measured against something else, like USD. When that fluctuates, it might be due to the change in value of BTC or it might be due to the change in value of USD, or both. This is how it works.

... which certainly implies that change in the USD has been a significant factor in crypto's value... and that just ain't so. The wild swings in BTC valuation make the moves of the USD no more than noise by comparison. We all know this. BTC is wildly volatile and the USD isn't, by just about any measure. That's currently how the financial world works. I believe this was Rob's point too.

From my perspective, here are the various reasons for having anything to do with current cryptocurrencies:

• you bought a few when they were real cheap, and one way or another you hung onto them and now you're in the chips! There's a few CFers who won big like this.
• electricity is cheap in your area, so crypto mining is economically feasible
• if you have the risk tolerance and market smarts, you can make some serious money buying and selling them
• you're engaged in some, um, extra-legal dealings (eg tax evasion or worse)
• you are a staunch Libertarian who sees a stateless currency as the way to break the yoke of governments
• you're Russian (or part of some other pariah state) and crypto is still an unsanctioned or unrestricted way to make international transactions

But so far, crypto does not perform so efficiently as a currency, and their volatility makes most of them a poor and risky repository for preserving wealth. At present, they're mostly a new synthetic asset that's highly risky.

If the OP's desire is to preserve the USD value of some capital, as well as to have global access... crypto is a poor medium compared to other more common options.

[valhalla360]

Originally Posted by s/v Jedi

Hold on, I never said smuggling cash is legal! I reacted to statements that online banking is illegal outside your own country and owning bitcoin while traveling abroad is illegal.

Who said it was illegal? I didn't.

The illegal activity is when you try to avoid reporting it as it passes across the border. Lots of folks push crypto claim they can avoid reporting it when it goes across the border.

If you are reporting it anyway, takes away much of the supposed advantage.

[valhalla360]

Originally Posted by Franziska

The majority is trying do invest into in the same legal manner as they do with other investments.

So you admit, it's not really a currency but an investment...what exactly are you investing in, if its' not effective as a currency?

[valhalla360]

Originally Posted by s/v Jedi

I don’t believe anyone said anything about wrapping cash in plastic and smuggling it in the bilge.

I’m sure you didn’t say online banking or doing crypto payments while abroad is illegal, but I’m pretty sure someone did

Using crypto to bypass reporting as money is transferred out of the country is an electronic equivalent of smuggling it in the bilge.

[valhalla360]

Originally Posted by s/v Jedi

Remember that experts recommend to only keep 5% of your wealth in crypto with another 5% in precious metals. Compare that to 20% in real estate, 40% in stock, 20% in bonds and another 10% in commodities (BTC and precious metals are in the 20% commodities chunk of assets).

Who are these "experts"?

I've yet to see a reputable source recommend any such distribution.

[valhalla360]

Originally Posted by Shanachie

One concept that people have difficulty understanding is that crypto is not a currency. It's more like a share of stock.

More like a ponzi scheme.

A stock rises in value because the underlying company makes money and gains assets that have value...or at least is expected to.

Crypto does none of that and because (at least the popular ones) are set up to go into heavy and perpetual deflation, they rely entirely on the next person buying it at a higher price. Even Amazon, eventually started turning a profit. There is no such future designed into crypto.

[valhalla360]

Originally Posted by El Pinguino

You would appear to be considering fried chicken which is a commodity with a limited 'shelf life'.

I was considering a live chicken - or better still a hen - which is an asset that if you can also find yourself a rooster will be an appreciating asset.

In that case, the guy with a live chicken (or dead) sitting in the corner of the room is the thief...doesn't matter if he's wearing gloves.

Of course, you are just trying to side track the point.

[valhalla360]

Originally Posted by Chotu

Further... If you don’t know what mining is, it’s the process of verifying and creating those records on the blockchain that say you have X amount of crypto.

Actually, verification is incidental to mining.

In laymen's terms:

Mining (in particular bitcoin) is a way to electronically find new coins by solving complex mathematical problems. The problems take hours, days, months for a computer to process their way thru.

There are a limited number of bitcoins (22million I believe) that can ever be mined. Every time a coin is found, the complexity of the calculations increases making it take longer to mine future coins.

As part of this calculation process, transactions are verified.

Of course, with the ever increasing difficulty in mining new coins and people losing the access records to existing coins, bitcoin is doomed to deflation. As a get rich quick ponzi scheme, that's great (at least until it collapses). As a useful currency, it makes it all but useless.

If you were one of the early adopters who could mine a few dozen coins a day on an old 386 computer from the 1980's that you pulled out of the closet, you won the lottery because they were selling for a fraction of a penny early on. Now, it take expensive energy intensive computer systems that need to run for a very long time to get a coin. The lottery days are over.

[poiu]

Originally Posted by s/v Jedi

No this is not true. Nothing backs the value of fiat currency and we are forced to have it because they force us to pay taxes with it.

Crypto is currency and it does not need backing because, like gold,it has intrinsic value.

Read below from economists:

Most central banks do not provide guarantees on their currency to the public. In fact it can be argued that historically they were never fully guaranteed as most central banks issued more receipts for gold (or other assets) than they had, so the receipts were never fully redeemable in the aggregate.

The American Fed was stressed during the great depression and had to go off the gold standard for the public in 1933. The international gold standard was retained and dollars were redeemable for gold for a while. This too was "overbooked" and when the rightly suspicious French started to mass redeem dollars for gold, the Americans had to get off the international gold standard as well in 1971.

Today the dollar is not redeemable for anything. You can exchange paper dollars for coins or electronic dollars, but that is just changing the form of the same thing (the monetary base).

This is rather misleading, because it misses the essential point, that currency represents the value of an economy and the net wealth of that economy. In the case of the US and ignoring foreign deposits, the dollar is in effect backed by 140tn of net US assets and 24bn in value of the annual labour of its residents (the GDP). So long as the dollar is the only or main representation of that wealth, the dollar is backed by it.

The other misleading thing about this debate is that the risk of government action is understated. It is the biggest risk by far. Once government control of the currency and its management of the economy becomes challenged they will restrict or ban crypto. When criminality and tax evasion becomes significant ditto. When people are substantially hurt by corruption or fraud in the crypto space, ditto. When government tends towards more general control and authoritarian politics dominates, ditto.

Restrictions or bans are already happening in some countries. It is only a question of time before it happens in the US. Now BTC is worth about 0.7tn. Half a percent of the US net asset value. Big enough and in my view it will not get much more, maybe there will be a boom up by several multiples, then the final bust will come.

Once government controls are widespread the collapse in value will be enormous. They will ban its use, criminalising every user. They will ban all businesses and banks redeeming it making major transactions or conversions impossible. They will criminalise foreign bankers and businesses from doing so, and yes the US can and has done similar things.

You can make a shed load from speculation, fill your boots, but to think BTC is a long term store of value is utterly wrong.

[PaulCrawhorn]

I am not taking a position pro vs con on BTC, but again:

There is no geographic nor jurisdiction "location" of the coins, they reside at an address (just a long number) in a database (blockchain) that is replicated, distributed all around the world at the same time, wherever the internet is available.

Carrying the seed of your account-wallet or node privkeys with you, does not "move" the assets, any more than carrying the login info of your Fidelity account.

Of course, exchanging BTC for fiat currency in either direction via regulated financial systems CAN be taxed, or otherwise controlled.

But not holding it, transferring it to and from others, earning it etc independent of fiat systems, that blockchain system itself cannot be shut down or interfered with, it is outside the control of any agency or authority including the most powerful state actors.

And these days 90+% of BTC activity doesn't even touch the blockchain anyway. It literally is just math, how can a government regulate the use of math?

[valhalla360]

Originally Posted by PaulCrawhorn

I am not taking a position pro vs con on BTC, but again:

There is no geographic nor jurisdiction "location" of the coins, they reside at an address (just a long number) in a database (blockchain) that is replicated, distributed all around the world at the same time, wherever the internet is available.

Carrying the seed of your account-wallet or node privkeys with you, does not "move" the assets, any more than carrying the login info of your Fidelity account.

Of course, exchanging BTC for fiat currency in either direction via regulated financial systems CAN be taxed, or otherwise controlled.

But not holding it, transferring it to and from others, earning it etc independent of fiat systems, that blockchain system itself cannot be shut down or interfered with, it is outside the control of any agency or authority including the most powerful state actors.

And these days 90+% of BTC activity doesn't even touch the blockchain anyway. It literally is just math, how can a government regulate the use of math?

People are trying to overcomplicate it. I'm guessing to sound knowledgeable or maybe to baffle and bamboozle people into the scheme to keep it going.

It works just like using the regular banking system.
- Until you do something with it, it's just in the account and hasn't been moved anywhere. Having the codes with you, doesn't mean it's moved any more than having your ATM card or checkbook with you moves money out of your bank account.
- Once you transfer money to someone overseas or convert it to cash overseas, you have now moved it overseas. Same as if you pulled money out of your bank account via ATM or wire transferred $100k to an overseas broker to buy a boat.

There are some catches:
- The banking system takes care of the reporting process for you. With bitcoin you are on your own (and from talking to proponents, they all seem to believe they can get away with it).
- If you fail to report it, you will be in violation of most countries money laundering laws. They might use different terminology but same effect...you have effectively smuggled money across the border and they may confiscate it without any cause. It's actually not difficult for govt to track these transactions.
- If you get caught up with fraud or are otherwise taken advantage of, there are no consumer protections like with the formal banking system. While people like to claim that it's easy to implement their own security and they are smart enough, some of those protections are very useful.

Example: Last month, we booked an apartment thru what we believed to be a reputable website (fairly big name in asia). When we arrived, the desk staff had no idea we were coming and the apartment was already occupied with long term tenants. They didn't recognize the owner listed on the website. The wonderful website told us we were beyond the refund period, so we would have to get the non-existent owner to approve a late refund...we disputed it thru our credit card (ie: the banking system) and got our money back that day. A week later, we got a note from the website that we could still use the remainder of the stay as we had paid up front. We actually wound up getting an apartment in the same building (for less) and had met the people living in the original apartment. Same transaction with bitcoin and we would still be arguing with the website that the apartment wasn't available.


I've yet to have someone explain an advantage of crypto that doesn't involve illegal activity. In the modern world, it's cheap and fast to transfer money just about anywhere in the world. If you are worried about a country collapsing, you can store your money in another country without mucking around with crypto (heck, Ukraine wasn't exactly a surprise...Russia was telegraphing that things were bad for quite a while before the invasion)