Converting altcoins into BTC because...?


  • Community Manager

    Quoting this article:

    The previous altcoin rally will never happen again. It was based on hype and optimism. But now the trends have changed. It is not so much about ICO projects, whitepaper, an ambitious vision. The narrative has turned towards BTC solely. No one talks about Dapps anymore. Institution products and funds manager mostly look at BTC only. The interest in alts are simply not there anymore and they will never go back to its all-time high prices.

    My belief is somewhat in between. An altcoin rally would come, but they would be very specific and streamlined. Only certain projects that make the cut makes it. The killer Dapp still hasn’t come yet. It is just like the internet bubble.

    @cybreed @Ng-Seng-He @limjimmy @geezfund @antoniomc27

    Do you agree with this author in that altcoins are not the way to go (BTC is instead)? What is the way to go then IYO?

    His conversions were pretty non-subtle...
    0_1562855527015_c7ef0502-1bde-47a2-b7ab-136f07356d63-image.png



  • No one knows whether or not there will be an altcoin rally again, so it's really ignorant to just say that there won't be one in the future.

    I think just like anything, one should diversify. For example, stock picking wouldn't be ideal for most people, but holding an index fund like the S&P500 would be suitable.

    No one should go all BTC, nor all altcoins. A mix of both would be good.

    https://my.iconomi.com/?filter=crypto-funds

    The link above shows some of the crypto index funds that are available now, you can invest directly in them or just try to build your own crypto fund (holding it in your own wallet) by emulating the coin allocations in the funds. I personally prefer the latter because you don't have to pay the high management fees.

    So no, I don't agree with the author. I prefer to diversify into a crypto index fund.


  • Emergent

    But the coins are all correlated. So there’s no diversification?



  • @jomni I still yet to think of a better way to diversify in crypto. maybe more stablecoins allocation in the portfolio? idk


  • Contributor

    It is always healthy to have opposing views. I disagree with @Ng-Seng-He on this one. In my opinion, the uber-optimistic view on "altcoins will solve every single problem in the world", from Betting and Forecasting (Augur) to Supply Chain (Walton), just to name two examples, has faded away and I do not see it coming back. Another altcoin rally? maybe, but I doubt it would be as exacerbated as the two waves we witnessed in mid-2017 and early-2018.

    One graph I like is the Bitcoin dominance % by Coinmarketcap. You can see that, after touching a low point of 38% market share in early 2018, BTC share has been going steadily up, and it is now at 65%.

    I have only rebalanced my crypto portfolio twice, once in Sep-18 and another in May-19, both switching altcoins to BTC. I currently hold 67% BTC 33% altcoins.

    0_1562947949521_86c209f2-12c2-424d-9c9f-35c06fb1717c-image.png


  • Contributor

    agree with @antoniomc27
    many altcoins are trying a solve a problem that doesn't exist with a solution which is very ill-conceived. (with may be the exception of ether)

    whereas the foundation for bitcoin is as solid as they get. read "digital gold" and bitcoin whitepaper if you are interested in understanding why satoshi nakamoto created bitcoin and the problem he tried to solve with it.

    @jomni related but not in the way you think. their value is decided by number of "bitcoins". its only a unit of measurement. imagine currencies and their ratios. we can't say holding multiple currencies is not a way to diversify as they are linked to each other.

    but the altcoin rally might pickup. we are at a stage where the price is decided by market(people) sentiment faaar more than actual value created. so anything can happen



  • @antoniomc27 Also, remember that the markets are irrational, cuz you know... everyone's in for the technology.

    I personally own only a small sum of alts, I may rebalance them to a higher % if the bitcoin rally keeps going.

    #altszn



  • How did the previous altcoin rally kick off? What drove that optimism and hype for 'lousy' whitepapers to gain traction? And what's the major difference between then and now?



  • @ng-seng-he "everyone's in for the technology"technology



  • For me, I'd like to take the perspective that whether or not the next altcoin rally is coming, dominance will slowly converge to bitcoin, so it should be a good move to accumulate BTC, all other things constant. Apart from usual reasons (why bitcoin is a good investment etc.) like a tried and proven use case, potential adoption, network effect from more mainstream adoption, stability with regard to global infrastructure which bolsters confidence of more risk-averse joiners, I think we've to also look at the hardware involved.

    China is cracking down on local crypto exchanges, and freezing payment channels, which has been affecting the demand of bitcoin. But what ultimately controls the supply (and progress wrt hashrates etc.) of bitcoin is the bitcoin mining hardware market, which has been reported to be unaffected by such crackdowns. Massive mining farms are located there to take advantage of dirt cheap (and definitely dirty coal power) electricity prices. Presence of bitcoin mining pools exacerbates this too;

    (Mining pools are) collaborations between individual miners and, frequently, major mining companies. Their hashrate is combined so that the pool has a better chance of finding a block. The block reward is then shared among all contributing members, according to their proportional hashrate.

    As we speak, these forces continue to increasingly propel bitcoin's network hashrate up. Bitcoin network hashrate sees fastest growth in history

    Actually, mildly combining what @Ng-Seng-He and @antoniomc27 said, lumping all altcoins into one would probably not be wise to judge if there'd be a next altcoin rally given the maturity the market has accumulated, (greater cynicism towards promising world visions, 'cutting-edge' tech, shift in focus to altcoins which can hedge against bitcoin drops, real utility, now that the industry watchers should have gotten better assessing each coin's intrinsic potential) before welcoming the next.

    We shall stay tuned



  • @antoniomc27 @Ng-Seng-He which altcoins do you own/believe in?

    @Ng-Seng-He curious to know how your diy crypto index fund is doing :)





  • @arigatomon
    0_1563094632643_dfe22262-54e2-414e-9912-e1d2855180dc-image.png
    I guess many altcoins are like this, just that they aren't that transparent ;)




  • Contributor

    @motan I think believing in a project does not necessarily mean you need to own the altcoin. I only own what I believe has capital appreciation.

    That said, in my case:

    • Owning: Bitcoin, Monero, Binance Coin, Ethereum, a bit of Litecoin, Ripple, and Dash
    • Liking the idea behind it: the above, plus Basic Attention Token, IOTA, Augur, Iconomi.


  • @antoniomc27 I'm with you on that. But that being said, do you like the idea behind the coins you own?



  • @arigatomon Useful in intention!


  • Contributor

    @motan yes. Especially Monero. My top choice. Truly private.


  • Contributor

    I like ethereum. but it hasn't been picking up since a long time. sigh


  • Community Manager

    @jonhan it appears that Satoshi might be revealing himself soon.

    Real? Staged?


  • Community Manager



  • @kaeley-wn Are you Satoshi Nakamoto? 😄


  • Contributor

    @kaeley-wn said in Converting altcoins into BTC because...?:

    Real? Staged?

    Would love for it to be real. but the other exciting question is, what will this do to bitcoin prices.
    I bet based on the nationality / profile of the real satoshi, it can go up / down. if he is from a generally unfavourable region, it will tank the price. people will be like "oh this guy is trying to hack us and get information" and other random crap like that lol



  • To break the market down into "Altcoin" and "BTC" is in my view an outdated perspective of the market.

    What the market should be looking for are projects that have real world value and purpose .v. those that don't. The are several projects in the market that are backed by very strong teams which have built very strong partnerships. In certain cases the digital assets associated with those projects are already demonstrating live use cases.

    So will "alt season" return in the way it did historically? Sincerely and truthfully, hopefully not! The hope and focus should be on a decoupling of quality projects .v. the rest regardless of whether they are "alts" or "BTC".

    As for BTC itself, I personally hope to see more mature discussions around it within the crypto space.

    • It is not cost effective to transfer

    • Hash power is centralised geographically. Wallets are centralised in terms of holdings with little to none being reinvested into the ecosystem.

    • Lightening Network A) doesn't do what its supposed to do and B) is technically unrealistic for non-techies to engage with

    BTC was first and we should celebrate it just as we celebrate Napster for introducing the world to streaming music. However there are very few if any instances in human history where the 1st iteration of a technology was proven to be the best overtime.



  • @ecent Hmmmmm. Which strong teams are you talking about?


  • Community Manager

    @limjimmy 😄😄😄


  • Community Manager

    @ecent Very valid points! Altcoin vs BTC is but a language distinction/superficial categorisation/tip of the iceberg.

    Would be great if you could share with everyone any resources / useful articles in better understanding these projects you speak of! Interested to find out more myself too!



  • @kaeley-wn @arigatomon

    In terms of which teams, I am comfortable to list my existing portfolio which is a heavy majority towards XRP and a smaller position in NEXO. I think there are outstanding teams involved with the VeChain and Propy projects as well to name a couple but as mentioned for the time being my crypto portfolio is composed of two assets.

    These are all teams engaging with regulators, who have backgrounds in their fields, are maintaining transparency with respect to their strategy and are adhering to a long-term view of the market.

    I suppose the question of "what makes a good crypto team" correlates to your view of what crypto is or can be. If you think that crypto will help replace and / or eliminate banks, governments and regulators then the "best" team is probably the one screaming from the roof top the loudest. In my view crypto is a mechanism that will allow for efficiency optimisation in countless industries with finance being the most obvious.

    I appreciate teams engaged in a long term view of the market, professional in their approach and working with those regulators, governments and general industry incumbents to move the needle forward. We do not need to destroy the old world in order to build a new one and, amongst other factors, I tend to gravitate towards crypto teams with that mentality.

    Happy to share further reading material on projects I am invested in with anyone who wants. Feel free to DM me.


  • Emergent

    @ecent said in Converting altcoins into BTC because...?:

    @kaeley-wn @arigatomon

    In terms of which teams, I am comfortable to list my existing portfolio which is a heavy majority towards XRP and a smaller position in NEXO. I think there are outstanding teams involved with the VeChain and Propy projects as well to name a couple but as mentioned for the time being my crypto portfolio is composed of two assets.

    These are all teams engaging with regulators, who have backgrounds in their fields, are maintaining transparency with respect to their strategy and are adhering to a long-term view of the market.

    I suppose the question of "what makes a good crypto team" correlates to your view of what crypto is or can be. If you think that crypto will help replace and / or eliminate banks, governments and regulators then the "best" team is probably the one screaming from the roof top the loudest. In my view crypto is a mechanism that will allow for efficiency optimisation in countless industries with finance being the most obvious.

    I appreciate teams engaged in a long term view of the market, professional in their approach and working with those regulators, governments and general industry incumbents to move the needle forward. We do not need to destroy the old world in order to build a new one and, amongst other factors, I tend to gravitate towards crypto teams with that mentality.

    Happy to share further reading material on projects I am invested in with anyone who wants. Feel free to DM me.

    Crypto purists would oppose your view. As they are anti-establishment, anti-regulator. Crypto was built as to not depend on trust (government, industry, counterparties).



  • @jomni Crypto purists absolutely would and I would argue that crypto purists should pay attention to whats going on in reality before getting too upset over my views.

    Fact is governments have come out against BTC and, to a much greater extent, privacy tokens. While most governments have come around to the fact that digital assets are out of the box and not going back in ... they are all talking about regulations, anti money laundering (AML) legislation and know your customer (KYC) protocols. This notion that the authorities of the world were simply going to roll over and allow society to govern itself was outlandish from the start.

    What blockchain and crypto will absolutely give us is more insight, more oversight, more verification of authenticity and faster financial processing that benefits everyone. An elimination of government and banks though? In my humble view, absolutely absurd.

    Regardless of what crypto was originally envisioned to me, reality caught up with it. Crypto isnt going away but neither are governments. An overall improvement in efficiency and inclusion is what we will end up with.



  • As a follow on to why I have concerns re: BTC ...

    Here is my biggest struggle with BTC. I’ll accept the hedge, digital gold, etc arguments for the purpose of focusing on my main point. However, why does the market disconnect concerns over the China government and the concentration of PoW mining within its borders?

    We bash their actions re: Hong Kong and worry about the damage they can cause by being the largest holder of US debt but we don’t accept the idea that their access to the majority of mining can be deemed a potential economic weapon. Why?

    If the counter point is “they can attack it but it will go on elsewhere” then I would argue we are discounting the financial power of a State actor to “permanently” attack the network and the absolute damage such an attack would do to the BTC “brand”. What am I / we missing?

    These aspects prevent me from seeing BTC as a long term viable economic component and definitely prevent me from seeing BTC as something that large scale corporates will be "allowed" to build on top of.



  • @ecent Really interesting views you've shared. How in your view would China be able to "permanently" attack the network, and how catastrophic could it get? Restricting supply?



  • @motan Thanks.

    Anyone is able to attack the network. In the case of PoW its simply a case of whether the attacker has the resources (IE: financial) to sustain a meaningful attack. I dont think its controversial to state that a State actor the size of China absolutely has the resources to do so. Some of the costs can even be mitigated by shorting the asset via financial instruments now created within the crypto ecosystem.

    In terms of depth of damage, in my opinion, irreversible. The entire brand of BTC is that its the most immutable, the most secure and the most flawless piece of economic technology we have. Any display of a dent in that armour whether "permanent" or "temporary" would irrevocable tarnish that brand in my view. Reversing transactions, changing supply, etc are all byproducts of any ability to attack / take control fo the network.

    The real question isn't "can they" as they certainly can but rather "would they". Who knows? My counter question is, why do we want to find out and why do we want to give them the ability to? If the goal is to decouple our economy from the threat of a single State actor, why are we replicating the same problems we're supposedly trying to solve?

    If we dont trust China with US debt then I dont see why we would trust them with the influence over the majority of Proof of Work mining power. It cant be that "China is bad" but "they are fine for Bitcoin".



  • Its a classic case of "The king has no clothes!".

    It doesnt matter if the king then actually puts on clothing. The fact is that the king has been shown to be naked and that changes everything.

    Any meaningful attack on BTC, which the supposedly questionable government of China is in a position to do, would tarnish the supposedly flawless image / brand of the king.



  • @ecent If China's capability to attack the network is so immense, doesn't it mean that wherever the mining takes place, the risk still exists?



  • @geezfund In theory, sure. While we can debate the merits of any government, the threat is acutely higher when mining is concentrated within the borders of a totalitarian government who can effectively impose any ruling they wish upon their citizens / companies / etc.



  • @ecent You mentioned that we "don't accept the idea that their access to the majority of mining can be deemed a potential economic weapon" and "that "the market disconnect(s) concerns over the China government and the concentration of PoW mining within its borders".

    Was this inferred from the ambivalence of the market towards China's bans & crackdowns? Or was there an outright brush-off of such concerns?



  • @motan That was a reflection of my discussions with enterprises and retail investors active in the space.

    In fact I would suggest that market reactions to China "bans" of crypto have been exaggerated.

    I am more so referring to the increasingly large group of individuals, some of whom with deep financial / banking background, who simultaneously point to China as a threat for their USD debt position while ignoring or discounting the threat of geographic mining concentration.

    I remain unclear as to how China can simultaneously be both a threat and a non-threat when the items being discussed (IE: mining & USD debt) are both viewed as part of the global economic system.



  • @ecent What can the world to mitigate that danger?



  • @christinex Which danger? You mean the one of Proof of Work mining centralisation?

    Easy.

    Don't depend on Proof of Work mining.

    If PoW is to succeed as the standard in crypto it will be the first case in human history where the 1st iteration of a technology proved to be the best.



  • @ecent To proof of stake mining instead?



  • @christinex In my view, what is the difference?

    The same geopolitical issues remain and its simply another form of the "rich get richer" (IE: those with the largest holdings have the largest say in the network).

    There is no such thing as 100% decentralisation but we have to be mindful of the systems that are more prone to centralised influence and 51% attacks.



  • @ecent @Christinex with POW, power is concentrated amongst the majority miners. With POS, power is concentrated amongst the majority coin owners. I'd like to think that POS is even worse, in line with your "rich get richer" statement.



  • @geezfund It could be argued that both are a case of the "rich get richer".

    Whoever can afford the most mining equipment and the most electricity can corner the majority of the market and collect the majority of the fees.

    Both PoW and PoS are toxic in my view :) In fact I would go so far as to say that if the goal is to achieve decentralisation less exposed to tampering then any kind of direct monetary incentive to participate in validating / verifying the network is probably a basis for trouble.



  • @ecent there's no perfect model here, both models provide a different set of pros and cons, and it's up to the users which model they prefer better.

    With that said, it's better to have more alternatives than just these 2, but as I can see right now these are the only 2 major types.



  • @ng-seng-he The XRP Ledger uses an energy efficient consensus protocol that requires an 80% majority to veto / force anything through the protocol.

    No mining, no energy waste, high level attack resistance and no monetary incentives to cloud reasons for participation.


 

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