# Where Do Crypto Currencies Get Funds For Dividend Payments?



## FairTrade (Apr 29, 2021)

My sister has 'invested' in crypto and says she is getting a dividend payment from it. Where can that money be coming from if there is no profit from sales? Can someone please explain how this is sustainable?


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## james4beach (Nov 15, 2012)

I personally think they are elaborate scams / frauds.


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## m3s (Apr 3, 2010)

Depends entirely on the token..

They don't pay dividends. She is probably referring to staking to validate a node or providing liquidity to a decentralized exchange, or lending collateral. Whether staking is sustainable depends if the fees generated (millions at day at this point) are enough to cover the staking rewards. If not the token is inflationary

Lending rates depend mostly on market supply/demand. There is a huge demand to borrow stablecoins so their rates are high but it depends on the supply/demand. There are also tokens specific to protocols to provide incentive. There are many inflationary tokens but in the future they could be covered by fees (likely much less)

Cardano transaction fees for example go into a treasury to pay those who process and secure the network. Whether it is sustainable depends on usage of the network. Considering how early we are (DeFi has barely been around a year) and how few people use it yet..

Wait until you learn about airdrops


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## sags (May 15, 2010)

And then one day there your money was............gone.


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## m3s (Apr 3, 2010)

sags said:


> And then one day there your money was............gone.


You mean like how a "Guaranteed Investment Contract" is not a guaranteed investment at all when its underlying value is debased by inflation that is much higher than its return


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## Fain (Oct 11, 2009)

14% return annualized on CAD stablecoins right now. Never will touch a GIC while there is easy money like this around. Give it 2-3 years and these rates will disappear with the institutional money that is coming into the space.


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## sags (May 15, 2010)

Since crypto is valued in US dollars, it is also subject to the same decline in purchasing power.

A crypto "investor" risks 100% of their capital, by handing their money over to unregulated exchanges, located in unknown countries, that have a nasty habit of disappearing overnight with all the investor funds. In 2021 the investor losses were over $20 billion dollars and there is nobody trying to get the money back.

If you think a 14% return from unknown counterparties with no trust credentials isn't a very, very high risk investment, good luck with magic internet money.

First rule of investing is.......don't lose your capital. Crypto investors will learn the hard way.


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## m3s (Apr 3, 2010)

sags said:


> Since crypto is valued in US dollars, it is also subject to the same decline in purchasing power.


Crypto is not valued in USD besides the stablecoins that are designed to track USD.

Stop posting bs when you have no clue what you are talking about



sags said:


> First rule of investing is.......don't lose your capital.


This is true. You need to learn that inflation is not good for GICs


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## m3s (Apr 3, 2010)

sags said:


> A crypto "investor" risks 100% of their capital, by handing their money over to unregulated exchanges, located in unknown countries, that have a nasty habit of disappearing overnight with all the investor funds. In 2021 the investor losses were over $20 billion dollars and there is nobody trying to get the money back.


There are scams everywhere.

If you can't see the scams you should go buy a "guaranteed investment contract" that is guaranteed to lose its purchasing power in real terms

Stop spreading mainstream media FUD


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## sags (May 15, 2010)

What crypto isn't priced in US dollars ?

Even with a 14% return, investors would have to hope for 7 years of growth without someone absconding with their money, just to break even for a 100% loss.

Or.......some may think they can collect for a period of time and will somehow know to withdraw their funds a day before the fund collapses.

Good luck with that plan.


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## sags (May 15, 2010)

Bitcoin lost 25% of it's value in USD since the ATH. Now it is worth 25% fewer US dollars that are declining in purchasing power.

Same with all crypto bought and sold in USD. The good news is the more bitcoin price falls.....the less you have to worry about debasement of US dollars.


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## m3s (Apr 3, 2010)

sags you have spent over a decade on a money forum. I can never tell if someone on the internet is trolling or a complete idiot.

I have asked you rhetorical questions about the very basics and your responses showed the latter is probably more likely. Inflation is not good for GICs

So to answer your question... if BTC is exchanged with USD and the value of USD declines... no sags the value of BTC does not decline with it


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## m3s (Apr 3, 2010)

sags said:


> Bitcoin lost 25% of it's value in USD since the ATH. Now it is worth 25% fewer US dollars that are declining in purchasing power.
> 
> Same with all crypto bought and sold in USD.


First the elementary school grammer. In this case it's its not it's

Second bitcoin declines by 25% in terms of USD. Ok? Zoom out a month. Zoom out a year. Zoom out a few years sags. This is very basic. Crypto is exchanged with USD. If USD goes down in value then you can buy less BTC with USD. This is also very basic trading

If you don't know what you're talking about then why post about it to show everyone. Inflation is not good for GICs sags


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## sags (May 15, 2010)

Bitcoin has no intrinsic value, so it is bought and sold in US dollars.

It doesn't matter how many USD buy a bitcoin at any given time frame. Each one of the USD loses purchasing power over time.

Unless you believe that the USD used to purchase bitcoins are magic internet fiat money that don't lose purchasing power.


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## Beaver101 (Nov 14, 2011)

m3s said:


> First the elementary school grammer. In this case it's its not it's


 ... if you understood what he was saying, I wouldn't sweat on his grammar or even the spelling(s). Heck, in fact, there're already plenty of members on this forum (still is in or was in previous financial professions) who can't (and continues to be unable) to spell correctly no matter how many posts they shoot out or even when the mistake has been pointed out. Anyhow ...



> Second bitcoin declines by 25% in terms of USD. Ok? Zoom out a month. Zoom out a year. Zoom out a few years sags. This is very basic. *Crypto is exchanged with USD.* *If USD goes down in value then you can buy less BTC with USD.* This is also very basic trading


 ... interesting, so what currency does one start out with in "acquiring" BTC? And when they want out, what currency do the investor gets back?
Or must BTC be perpetually be held to have value? Is this how "investors in BTCs" make money? There gotta to be a money-making motive for one to get into BTC, just like with any other "investments", I presuppose? 



> If you don't know what you're talking about then why post about it to show everyone. Inflation is not good for GICs sags


 ...I'm certain sags knows inflation will erode GICs (or any currency for that matter) over time. Then does this mean there is no effect of inflation with BTCs given one can just shift an extra zero behind the 1 BTC and get oneself a couple of bottles of whiskey instead of half a case of beer? I'm really curious.


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## sags (May 15, 2010)

GICs lose purchasing power because they are in fiat dollars.......same as crypto.

The key difference is the price of a GIC is static and guaranteed, while crypto is dynamic and not guaranteed.

Inflation is given as an average. If there is 5% inflation, it doesn't mean that every product and service has gone up 5% in price.

Some products go up the 5% or more........and some decline in price. There are many factors involved in pricing.

My point on GICs is that when it is spent.....some of the money may be spent on products that experienced inflation or deflation.

Does a big screen television cost more today than it did 10 years ago ? What about a leather living room suite ?

What about the price of an ocean cruise or household goods ? A lot of things are cheaper today than they were only years ago.

If I collect interest on GICs, I think it will more than cover the "actual" inflation that we have to pay when the money is actually spent.

Some people may be forced to spend their GIC money to pay daily living expenses and they have no control over those costs.

Everyone has a different exposure to inflation.


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## m3s (Apr 3, 2010)

Beaver101 said:


> ...I'm certain sags knows inflation will erode GICs (or any currency for that matter) over time. Then does this mean there is no effect of inflation with BTCs given one can just shift an extra zero behind the 1 BTC and get oneself a couple of bottles of whiskey instead of half a case of beer? I'm really curious.


It was in another thread beav. sags claimed that inflation is good for GICs. I asked him to explain and he wrote a wall of text. I wasn't convinced..

You can't shift an extra zero behind the 1 BTC. 1 BTC is 1 BTC. 1 USD is 1 USD. The difference is that the Fed can add a bunch of 0's to their balance sheet whenever they need to

When USD is debased by inflation 1 USD is worth less in terms of BTC and 1 BTC is worth more in terms of USD. The opposite of what sags claimed above


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## sags (May 15, 2010)

Not long ago, crypto promoters were citing Tesla accepting bitcoins for vehicles.

They were pointing to Cathie Wood's ARK funds as success for "disruptor" technology.

Today, Elon Musk promotes Dogecoin and says he sees no value in defi or web 3. Twitter's Jack Dorsey says decentralization doesn't exist.

As I predicted, Cathie Woods is dumping Tesla and a bunch of "tech" stocks to pay dividends and redemptions.

A month ago she was pumping Tesla and saying her fund could rise 40%.

Michael Saylor of MicroStrategy....another crypto pumper is getting his head handed to him with his company.

The exchanges and crypto are being dumped by investors and where is the money going......into US Treasuries.

I think the crypto promoters are getting antsy and angry as the bottom is dropping out of the magic internet money frenzy.


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## sags (May 15, 2010)

_When USD is debased by inflation 1 USD is worth less in terms of BTC and 1 BTC is worth more in terms of USD. The opposite of what sags claimed above _

That is what bitoin promoters like to claim. It isn't the reality or bitcoins would be going up in value in USD.........not down.

Bitcoins move in tandem with other "high risk" investments. Bitcoins are not a flight to safety.

They are a highly speculative high risk investment at best.....or a global pyramid scheme at worst.

After a decade, bitcoin still has no demonstrable use or intrinsic value. It is still a game of "greater fools".


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## m3s (Apr 3, 2010)

Eh you have to zoom out more sags and stop reading mainstream media entertainment for your financial advice. They are making bank off your ignorance.

I derisked crypto back in September and posted here when I did. Mostly because of the China real estate uncertainly and volatility it could cause. Bitcoin has massive options contracts that expire Friday with a max pain price of $48k USD. As usual it's gravitating around that

I made millions of dollars this year. I'm harvesting some crypto losses this week to lower my tax bill a bit. Yes I am a bit antsy. Antsy to buy cheap crypto in the new year and antsy to not miss out on another airdrop. So many airdrops lately. If only you knew

Anyways enjoy your GICs if you like them. Stop wasting your time in the crypto threads unless you want to learn how make millions as well.


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## Mechanic (Oct 29, 2013)

It's grammar, not grammer 🤣


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## m3s (Apr 3, 2010)

Mechanic said:


> It's grammar, not grammer 🤣


😝 Touché

I spell things wrong all the time. Tired if seeing the same misuse of it's and its from the repeat offenders

Hopefully inflation is good for grammar on this forum like GICs


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## MrMatt (Dec 21, 2011)

FairTrade said:


> My sister has 'invested' in crypto and says she is getting a dividend payment from it. Where can that money be coming from if there is no profit from sales? Can someone please explain how this is sustainable?


A variety of methods, since they're not dividends.

It could be loan interest, it could be staking rewards, it could be earnings from a crypto investment pool.

Also why do you say there is no profit from sales?


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## m3s (Apr 3, 2010)

If you consider transaction fees to be revenue like the legacy financial sector, crypto networks generate billions per quarter

I prefer to hold the ones that turn that revenue into yield for those who process and decentralize the network. Soon you will be able to lend/borrow to generate additional yield using DeFi on top. You can also provide liquidity (which is what we all do for our fractional/zero reserve banks) but the yield really depends on volume and the market supply/demand for the exchange

The biggest market caps in Canada are legacy financial services and people wonder how crypto can generate revenue


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## FairTrade (Apr 29, 2021)

m3s said:


> staking to validate a node or providing liquidity to a decentralized exchange
> 
> Lending rates depend mostly on market supply/demand. There is a huge demand to borrow stablecoins so their rates are high
> 
> Cardano transaction fees





MrMatt said:


> A variety of methods, since they're not dividends.
> 
> It could be loan interest, it could be staking rewards, it could be earnings from a crypto investment pool.
> 
> Also why do you say there is no profit from sales?


Thanks for sharing, this may start to make sense to me. Not likely, but I'm hopeful. 
I was unaware that crypto markets loaned out their coins for a percentage and that there are fees involved. I was under the impression that fiat currency was converted to crypto, it was held, identified in the blockchain until converted back into fiat currency. I had no clue that there was any revenue whatsoever. There is more to this than I thought. I'm curious to know what kinds of fees exist in these systems. What is to stop someone from not paying back their crypto loan? Is there a crypto- credit score? 
So many things to learn.




As for the inflation debate, I can see both sides to the argument. For crypto to be independent of inflation, it would have to decouple from fiat and become the reserve currency. Until then, 10 bitcoins today is 10 bitcoins tomorrow but a $10 loaf of bread today is an $11 loaf of bread tomorrow. In crypto-reserve-currency-world, that loaf of bread would still be $10. We aren't there yet.


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## sags (May 15, 2010)

Bitcoin does nothing to stop inflation.

The Federal Reserve printing money causes "inflation" in economic terms, but "price increases" (commonly referred to as inflation) is subject to many factors.

The price of a loaf of bread may rise solely because the baker needs to pay for new ovens.

The higher price for a loaf of his bread would have nothing to do with money printing and a set limit of bitcoins wouldn't change the outcome.


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## m3s (Apr 3, 2010)

FairTrade said:


> I was under the impression that fiat currency was converted to crypto, it was held, identified in the blockchain until converted back into fiat currency.


Fiat is not converted to crypto. Fiat is exchanged for crypto. You could exchange fiat for a crypto stablecoin and then lend it for 15-20% (or higher using much riskier protocols and yield optimizers) There is a demand to borrow stablecoins because many who have been long on crypto are short fiat (but they need fiat for many reasons and would rather borrow it than sell crypto triggering capital gains etc)




FairTrade said:


> I'm curious to know what kinds of fees exist in these systems. What is to stop someone from not paying back their crypto loan? Is there a crypto- credit score?


The fees depend on the demand for the finite space in each block. Fees can be low on newer blockchains or newer layers that are optimized for low fees (lower security as a trade off) Fees are very high on ethereum for the past year because the demand for that network is very high. Transaction fees are expected to come down as more scaling solutions come online but "revenue" is expected to increase with demand as well

Unlike the fractional reserve banking system (zero reserve now in the USA) crypto loans are over collateralized. To borrow a stablecoin to pay your bills or taxes you would also need to deposit crypto as collateral into a smart contract. The rates are lower for example if you borrow 10% of your collateral and the limit is often 40 or 50% depending on the asset and the protocol. If the asset deceases in value you can be liquidated just like using margin



FairTrade said:


> As for the inflation debate, I can see both sides to the argument. For crypto to be independent of inflation, it would have to decouple from fiat and become the reserve currency. Until then, 10 bitcoins today is 10 bitcoins tomorrow but a $10 loaf of bread today is an $11 loaf of bread tomorrow. In crypto-reserve-currency-world, that loaf of bread would still be $10. We aren't there yet.


This is just wrong. Houses and assets are increasing in value because fiat is decreasing in value. Stocks are also increasing in value because fiat is decreasing in value. This is very simple. If you want to exchange fiat for crypto and that fiat buys less chicken, real estate or equity it also buys you less digital asset as well. Fiat money supply is increasing because governments need far more money than they have to pay for the pandemic. There are inflationary and deflationary crypto tokens (chose wisely!)


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## james4beach (Nov 15, 2012)

I say that I suspect these are elaborate scams because of the overly complex schemes presented, along with a ton of techno babble. The techno babble can be a way to conceal the con happening under the hood. Because we live in a society of techno-fetishism, many people automatically assume that "advanced technical things" are really good and let their guard down.

Somebody will say, "well it sounds really advanced and neat, even though I don't fully understand it, I guess this is the future".

^ when someone says this, they're basically falling for the con job. Others will *think* they understand it when they really don't. That's possibly even more dangerous.

IMO these are elaborate scams, concealed using techno babble and seemingly advanced technical schemes, but really they are orchestrated by "whales" who have large interests in these, and which heavily promote them to gather money from the public.

They're concealing something.


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## m3s (Apr 3, 2010)

sags said:


> Bitcoin does nothing to stop inflation.
> 
> The Federal Reserve printing money causes "inflation" in economic terms, but "price increases" (commonly referred to as inflation) is subject to many factors.
> 
> ...


You have no idea what you are taking about

Printing money is inflation of the money supply. Fiat is inflationary by design sags. Inflation is not good for GICs. The price of bread rises because of inflation. If you want to exchange fiat for bitcoin and that fiat buys you less bread it also buys you less bitcoin. It's not that complicated

Please go back to your COVID threads


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## m3s (Apr 3, 2010)

sags said:


> GICs lose purchasing power because they are in fiat dollars.......same as crypto.


No. Just no.

Crypto is not the same as a GIC sags. You need to learn this for your own good please. I don't even want to embarrass you but you won't stop the nonsense

A house is not devalued because a GIC is devalued.



sags said:


> Inflation is given as an average. If there is 5% inflation, it doesn't mean that every product and service has gone up 5% in price.
> 
> Some products go up the 5% or more........and some decline in price. There are many factors involved in pricing.


No ****



sags said:


> My point on GICs is that when it is spent.....some of the money may be spent on products that experienced inflation or deflation.
> 
> Does a big screen television cost more today than it did 10 years ago ? What about a leather living room suite ?
> 
> ...


Your exposure to inflation has nothing to do with inflation of the USD or CAD. You said yourself inflation is an average. Inflation is a vector. Inflation is a direction. Inflation spreads from one market to another. Just because a TV is subsidized by harvesting your data and chinese slave labour does not mean we don't have inflation

Inflation is not good for GICs regardless what "your personal inflation" is. When a central bank adds supply to the money its value is diluted. Now the baker wants more fiat for the bread to pay for the real estate and bills that went up because that's exactly what happens when you increase the money supply

If your CAD denominated GIC buys you less bread guess what it also buys your less crypto and less real estate,


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## m3s (Apr 3, 2010)

james4beach said:


> IMO these are elaborate scams, concealed using techno babble and seemingly advanced technical schemes, but really they are orchestrated by "whales" who have large interests in these, and which heavily promote them to gather money from the public.


Of course there are scams and whales that can take advantage of markets. No different than any other market. Of course idiots are trading stuff they don't have a clue about. No different than any other market!

I come from years of investing and trading in traditional markets as you know I've been on here over a decade now. I find a lot of refreshing changes in the crypto markets. I don't have to pay for the privilege real time data or deal with 15 minute delayed prices. I don't have to pay for a bloomberg terminal to have access to the same information as the "whales". I don't have to wait for quarterly reports that have been polished behind closed doors. I don't have to wait for the market to open on monday

Not all crypto is created the same but the good ones are open source code with a public ledger and a fair distribution. All the data is there for you at no cost to analyze as much as you desire.


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## sags (May 15, 2010)

It sounds like money laundering to me.


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## m3s (Apr 3, 2010)

sags said:


> It sounds like money laundering to me.


Have you heard of the Panama Paper @sags? I'd like to know what does the Panama Papers sound like to you then?

Why we have heard nothing about those Panama Papers and yet the media, politicians and elite constantly tell us how criminal crypto "sounds like" while ignoring what those Panama Papers show us. So why is my tax bill so high if I use crypto to launder money? The government knows all my crypto addresses by the way and all the transactions are public. Why are the Panama papers ok to you if you are concerned about money laundering? Why do you think the elite have a problem with a public ledger sags?

Do you have a bloomberg terminal sags? Do you have an off shore bank account? Do you like inflation?


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## sags (May 15, 2010)

A guy robs a bank and says to the judge......but your honor, what about the Great train robbery and the Hope diamond heist.


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## m3s (Apr 3, 2010)

sags said:


> A guy robs a bank and says to the judge......but your honor, what about the Great train robbery and the Hope diamond heist.


Ok so where is the evidence?

Why do you not care about the panama papers that does show evidence of crime?

Do we ban all cars if cars are used for crime?


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## sags (May 15, 2010)

And the judge looked at the defendant and said.......the jury found you not guilty, but I am going to give you 6 months in jail just to be on the safe side.

We need to elect leaders who will be like the judge ignoring the consensus coming from the jury of corporations and the wealthy and do what is right.


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## MrMatt (Dec 21, 2011)

james4beach said:


> Somebody will say, "well it sounds really advanced and neat, even though I don't fully understand it, I guess this is the future".
> 
> ^ when someone says this, they're basically falling for the con job. Others will *think* they understand it when they really don't. That's possibly even more dangerous.


Yes to both.

But there are legitimate things being done with crypto. I am not investing in crypto because I don't see the valuation yet.
It's a really cool space, but I don't think it's clear who the winners will be yet, or even what winning means.
Ethereum is doing a lot of amazing things, but it's being held back by high fees. There are other low/no fee networks out there.

Imagine talking to someone pre-stock market about the stock market, or even online brokerages.
They'd thing you're nuts.
The idea of "emailing money" seemed laughable, but now 80% of my "classified ads" (ie kijiji/facebook marketplace) are done with Interac EFT.


We laughed at retinal scan security, my bank account is "secured" with my thumbprint.


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## m3s (Apr 3, 2010)

MrMatt said:


> Imagine talking to someone pre-stock market about the stock market, or even online brokerages.
> They'd thing you're nuts.


A lot of it does feel like venture capitalism and pre-IPO. The product is still in development. It's like the internet in the 90s before it went mainstream

Some have pointed out that retail is usually shut out of these things until the IPO. Some of the new tokens like Solana were basically pre-sold to billionaires like pre-IPOs. Crypto community sees this more like a legacy scam and yet traditional investors were fine with billionaires getting the pre-IPO. I prefer a fair launch

There really aren't many good networks. Almost all tokens are running on the ethereum network. I only see a few networks that could actually challenge it. Beta was better than VHS so I can't tell who will win yet because ethereum can also upgrade unlike VHS

Lending UST or USDC seems like a no-brainer for people on this forum though. 8% yield is very safe and easy and if you're willing to setup a wallet I know how to get 19% very easy on USD. GICs are negative in real terms so why not dabble in some stablecoins instead

These yields and airdrops won't last. The bond markets used to yield better when people were scared of the "new" money market. Now they blindly accept negative real returns like headless chickens


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## Beaver101 (Nov 14, 2011)

m3s said:


> Eh you have to zoom out more sags and stop reading mainstream media entertainment for your financial advice. They are making bank off your ignorance.
> 
> I derisked crypto back in September and posted here when I did. Mostly because of the China real estate uncertainly and volatility it could cause. Bitcoin has massive options contracts that expire Friday with a max pain price of $48k USD. As usual it's gravitating around that
> 
> ...


 ...WOW.


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## sags (May 15, 2010)




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## sags (May 15, 2010)

And the crypto liquidations keep coming as the price of crypto continues to fall....106,000 traders and $400 million in the last 24 hours.

The crypto gang are learning the downside risk of leverage.









Bitcoin Liquidations-Bitcoin Liquidations Chart-Bitcoin liquidations live-bitmex rekt-Coinglass


The Liquidations counts the real-time Liquidations of all exchanges and currencies. The liquidation history of all exchanges can be viewed through the historical Liquidations. The liquidation list shows each exchange's Liquidations.




www.coinglass.com


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## m3s (Apr 3, 2010)

sags said:


> And the crypto liquidations keep coming as the price of crypto continues to fall....106,000 traders and $400 million in the last 24 hours.


I posted up thread the options contracts expire this week. This is pretty much standard.

@sags thinks Guaranteed Investment Contracts are guaranteed investments and inflation is good because inflation is really deflation because TVs are cheaper. According to sags if you shop at goodwill there isn't any inflation because you can spend less money. According to sags everything is luck because he found his job at a party. Ok boomers

You can go back to my ethereum thread I don't remember ever using the term investment for crypto. Too bad CRA taxes crypto like capital gains instead of a night at the casino


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## sags (May 15, 2010)

No sales tax at Goodwill either and they sometimes have "sale" days.


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## robfordlives (Sep 18, 2014)

I have heard of the yield on stablecoins and I still don't get it. OK so you own some crypto and loan it out for these very high "risk free" rates. To whom exactly are you loaning these coins to? What are the counter parties doing with said coins? What happens if there is a prolonged downturn - does the whole thing unravel? Who ends up holding the bag if it goes kaboom? Can someone walk me through this in terms of what the borrower and lender gets out of this?


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## m3s (Apr 3, 2010)

sags if you don't have anything useful to contribute why not try to learn something. Why are you even here? All you do is deflect and moan about how society hasn't handed you enough for nothing. Go back to your socialism threads or contribute something constructive to the topic for a change.

Now for a useful comment-



robfordlives said:


> I have heard of the yield on stablecoins and I still don't get it. OK so you own some crypto and loan it out for these very high "risk free" rates. To whom exactly are you loaning these coins to? What are the counter parties doing with said coins? What happens if there is a prolonged downturn - does the whole thing unravel? Who ends up holding the bag if it goes kaboom? Can someone walk me through this in terms of what the borrower and lender gets out of this?


Crypto can be deposited into a smart contract to provide collateral or liquidity to a DeFi protocol. Think of this like depositing money in a traditional bank or brokerage. Except instead of getting measly 0.5% from a fractional reserve banking system run by wealthy suits, a decentralized program executes code to employ your capital more efficiently

You provide liquidity to a decentralized application or a centralized intermediary. The DeFi users are exchanging assets or borrowing to go short/long or to pay bills without triggering taxable events. These protocols have varying levels of risk but there are some great risk adjusted returns especially on stablecoins due to demand

Unlike our fractional reserve banking system that lends out money that doesn't actually exist, these are over-collateralized loans. If someone borrows to the limit and their collateral loses value then the smart contract will trigger liquidation automatically. Either the code works or it doesn't.

The more mature a protocol is and the more value locked in the safer it is considered to be. Some protocols have been hacked and everything is pretty much beta testing. Most hacks have been returned because it is a public ledger. The mature protocols are well established but nothing is ready for the average joe.

Staking is a much safer way to earn yield. Some have a lock up period. Many of the centralized exchanges offer staking services and DeFi yields now for a small fee. Much higher yields available by getting off the exchange but again it's not ready for mainstream. I need to check a lot of codes and audits but it comes natural if you like tech and finance.


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## KaeJS (Sep 28, 2010)

Beaver101 said:


> ...WOW.


Not sure why this is so surprising.

If boomers actually opened some wallets and started learning some things, you'd see how possible this is.

Obviously, I cannot attest to the success of m3s, but I would never bet against it or not take his word for it.

I don't believe in crypto and I have made that known. I still own some, I have mined some, I have staked some, I even ran a node for a while. Hell, I even transact in crypto with friends a few times a month. I haven't made millions, but I have definitely made thousands. More importantly, I took the time to understand it and try my hand at it before taking shots at it.

It really is quite astounding... But there is a whole world out there if you leave your bubble. (Insert coronavirus jab here) [double pun on the jab].


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## m3s (Apr 3, 2010)

Does Canada have Gemini yet?

I can deposit USD to Gemini from my legacy bank for free. I can exchange to GUSD (Gemini USD) for free (I believe, I don't use GUSD myself) and earn 8.05% on USD. I can also withdraw crypto to/from Gemini for free. Seems like a no-brainer when everyone in here is debating 1-2% GICs and transitory inflation that isn't so transitory is not actually deflation either.

Gemini isn't good for trading but the even the basic crypto exchanges have better user experience than legacy brokerages. Interactive Brokers is now trying to integrate Trading View because everyone wants it and most of the crypto exchanges already use it. Security is light years ahead of any Canadian bank or brokerage (Authy is also great.. banks should use it)

Not to mention no bs data subscriptions or minimum balance/inactivity/admin transfer fees etc etc etc I even get BAT rewards deposited to Gemini every month instead of seeing ads on this forum.


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## james4beach (Nov 15, 2012)

m3s said:


> I made millions of dollars this year. I'm harvesting some crypto losses this week to lower my tax bill a bit.
> . . .
> Anyways enjoy your GICs if you like them.


Seriously man, *please*, if you really did make millions in this stuff...

Cash out. Pay the tax bill (it's just a cost of doing business). Then put 20% in XAW and the other 80% in GICs, or if you really hate GICs, then maybe XSH for short term corporate bonds. Or just move the money into XBAL.

These are genuine suggestions, and I believe you when you say you made millions.


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## james4beach (Nov 15, 2012)

robfordlives said:


> OK so you own some crypto and loan it out for these very high "risk free" rates. To whom exactly are you loaning these coins to? What are the counter parties doing with said coins?


Other crypto speculators, possibly unregulated hedge funds, borrow crypto from you. And in return they pay you interest in units of crypto.

Guess what collateral backs the loan? Crypto.

And it's all unregulated, international lending to unknown parties. Most of the players are highly leveraged.


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## m3s (Apr 3, 2010)

james4beach said:


> Cash out. Pay the tax bill (it's just a cost of doing business). Then put 20% in XAW and the other 80% in GICs, or if you really hate GICs, then maybe XSH for short term corporate bonds. Or just move the money into XBAL.


I already rebalanced a lot in September. I'm rebalancing a lot this week for tax purposes

During the pandemic I had more time to follow what is going on. Governments are printing magic banker money and basic economics is you don't want bonds now. You think crypto is a scam when the banks have fractional reserves and still pay nothing on GICs. All it takes is a TikTok toilet paper panic on the banks they would have to create more magic banker money out of nothing.

Gold is fine but the gold bugs are dying from old age or COVID now and their heirs are selling it for magic internet money. The gold price is manipulated anyways when people just buy magic internet gold IOUs. I know you bought crypto at the top in 2017 so now you probably just refuse to look at it again. That's a shame because you seem to like tech and finance

Let's come back in a few years and see how broken bonds and magic banker money is doing against BTC, ETH, ADA (not DOGE etc)


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## JM1983 (Dec 30, 2020)

FairTrade said:


> My sister has 'invested' in crypto and says she is getting a dividend payment from it. Where can that money be coming from if there is no profit from sales? Can someone please explain how this is sustainable?


I myself am into Crypto. I stake my crypto. In a nutshell, I am receiving between 5 to 10% annual returns on my staking. Where does this 5 to 10% come from? Well, as an example, I stake a token called Algorand. Algorand is a smart contract blockchain protocol.

I stake my tokens, I am allocating my tokens to a validator. This can be a person with a computer running a validator program. A validator will verify/validate transactions on the Algorand blockchain. So if Party A sends Party B algorand tokens, someone needs to verify this on the Algorand blockchain. I am helping to verify this through staking and I get rewarded for this action.

In the traditional banking system, this is done by the bank and the bank takes a fee for this. In the blockchain world, token holder who stake take that fee. We are the bank, we own the token as well, and we have a stake in ensuring the blockchain is secure and verified correctly.

Any transactions on a blockchain need to be verified, these transactions can be transferring tokens from one wallet to another, buying NFTs and anything that blockchains will be capable of doing in the future.

Token holders are rewarded for helping validate and verify these transactions through staked rewards.

I dont lend my Crypto as I am a bit weary of not getting it back but staking on a well known blockchain is quite safe.

Another cool aspect of Algorand (or many other blockchains) is governance. You can allocate tokens towards voting for decisions that help improve the protocol, in return, you recieve token rewards for voting. Instead of a central authority making the decision on this project, the token holders vote on the decision.

If any of you are wondering what the hell does Algorand do? Check out this link for real use cases:





__





Home - Algorand Ecosystem







www.algorand.com


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## m3s (Apr 3, 2010)

JM1983 said:


> I dont lend my Crypto as I am a bit weary of not getting it back but staking on a well known blockchain is quite safe.


I agree staking is quite a bit safer. If you do it right the biggest risk is yourself losing your keys.

How are you managing the taxes for Algorand? For those who don't know Algorand has ties to MIT

The Space Force is studying blockchain tech at MIT, and most new tech for that matter.


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## JM1983 (Dec 30, 2020)

m3s said:


> I agree staking is quite a bit safer. If you do it right the biggest risk is yourself losing your keys.
> 
> How are you managing the taxes for Algorand? For those who don't know Algorand has ties to MIT
> 
> The Space Force is studying blockchain tech at MIT, and most new tech for that matter.


Im still trying to figure out the whole tax thing. Ive recently signed up with Cointracker.io and inputted all of my wallet addresses and it spits out a transaction list and supposed to give you a CRA completed capital gains/losses summary.


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## sags (May 15, 2010)

james4beach said:


> Other crypto speculators, possibly unregulated hedge funds, borrow crypto from you. And in return they pay you interest in units of crypto.
> 
> Guess what collateral backs the loan? Crypto.
> 
> And it's all unregulated, international lending to unknown parties. Most of the players are highly leveraged.


When you strip away the techno babble, anti-bank, anti-Fed, anti-economics rhetoric, what is left sure looks like a multilayered money laundering scheme.

How many of the transactions on these "blockchains" that require verification are actually a record of retail or business transactions ?

I don't know any retailers who accept crypto as payment. I think the vast majority of these transactions are people trading and moving crypto around.


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## sags (May 15, 2010)

Comparisons to the early days of the internet are laughable.

There is one public internet used by everyone. There are how many thousands of tokens and blockchains ?


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## JM1983 (Dec 30, 2020)

sags said:


> When you strip away the techno babble, anti-bank, anti-Fed, anti-economics rhetoric, what is left sure looks like a multilayered money laundering scheme.
> 
> How many of the transactions on these "blockchains" is actually for retail or business purposes ? The transactions are people moving crypto around.


You are correct, most transactions are people moving Crypto between hands. This would be fine if most retailers and markets accepted Crypto as a currency, then transactions between Crypto users makes sense. 

There are some use cases for blockchain but most are overshadowed by the toxicity and greed of Crypto as a whole. However, there are some real use case gems that will survive and provide some real uses, its just about doing some extensive research to find them.


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## m3s (Apr 3, 2010)

JM1983 said:


> Im still trying to figure out the whole tax thing. Ive recently signed up with Cointracker.io and inputted all of my wallet addresses and it spits out a transaction list and supposed to give you a CRA completed capital gains/losses summary.


I use CoinTracking and it can be setup to Canada. I've calculated some of them manually and it worked

Problem with ethereum staking is I "receive" rewards every few minutes. I'm using a daily transaction instead of hundreds per day. Some people are waiting until they actually withdraw the rewards but that would be a larger tax hit in that year.

Cardano is every 5 days but you can also stake to a ISPO to receive a different token from a devloping protocol



sags said:


> When you strip away the techno babble, anti-bank, anti-Fed, anti-economics rhetoric, what is left sure looks like a multilayered money laundering scheme.
> 
> How many of the transactions on these "blockchains" that require verification are actually a record of retail or business transactions ?
> 
> I don't know any retailers who accept crypto as payment. I think the vast majority of these transactions are people trading and moving crypto around.


You mean like the panama papers sags? Does nothing ever sink in?

You can actually use crypto almost everywhere in the USA now. I can buy coffee at Dunkin Donuts with crypto. I don't think many people do because the regulators aren't providing any clarity on taxes.

Do I need to calculate my capital gains when I buy a donut in USD based on its fair market value in CAD on that day? Of course not


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## JM1983 (Dec 30, 2020)

sags said:


> Comparisons to the early days of the internet are laughable.
> 
> There is one public internet used by everyone. There are how many thousands of tokens and blockchains ?


Yes, too early in the game to know the true winners in the blockchain game, every protocol is trying to gain a stronghold. Whats interesting about blockchain is interoperability between the chains. So technically, you could connect all of these tokens and interact/trade between them.


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## m3s (Apr 3, 2010)

__
https://www.reddit.com/r/ethereum/comments/ox7tel


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## m3s (Apr 3, 2010)

sags said:


> Comparisons to the early days of the internet are laughable.
> 
> There is one public internet used by everyone. There are how many thousands of tokens and blockchains ?


They all use the same TCP/IP protocol. How many websites and forums are there are on the internet? Notice how I can share a reddit/youtube/twitter post on this website?

There are not really thousands of useful blockchains. You are confusing tokens for blockchains even though I have explained this to you many times

Does anything ever sink in?


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## Beaver101 (Nov 14, 2011)

KaeJS said:


> Not sure why this is so surprising.


 ... ask yourself this question, if you made millions (and by that I mean "real spendable monies", would you be revealing your "secrets" on this DIY forum?



> If boomers actually opened some wallets and started learning some things, you'd see how possible this is.


 ... do you have something against boomers or just an inherent streak against ageism? I believe James4Beach is in your GEN category and read his earlier post about "crytocurrency" - summary: "it's a scam". 



> Obviously, I cannot attest to the success of m3s, but I would never bet against it or not take his word for it.


 .. no need to, he can make any claim he wants - free speech here. It's a matter of whether "you" believe him or not.



> I don't believe in crypto and I have made that known. I still own some, I have mined some, I have staked some, I even ran a node for a while. Hell, I even transact in crypto with friends a few times a month. I haven't made millions, but I have definitely made thousands. More importantly, I took the time to understand it and try my hand at it before taking shots at it.


 ... good for you. Just pay your taxes then ... for a pyramid scheme (my take after reading these crypto posts from m3s, etc.)



> It really is quite astounding... But there is a whole world out there if you leave your bubble. (Insert coronavirus jab here) [double pun on the jab].


 ... you must really hate your old lady, if not your old man for bringing you out to this world.


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## m3s (Apr 3, 2010)

Beaver101 said:


> ... ask yourself this question, if you made millions (and by that I mean "real spendable monies", would you be revealing your "secrets" on this DIY forum?


There's a lot of young people much much wealthier who are still very active in the online communities everyday. They are very different from greedy boomers with wealth

I plan to retire in the next few years. That isn't even a new plan. I don't plan to waste money like the boomers would do. I expect society will likely get very rocky during my time

Maybe I should stock up on guns and ammo for when a hoard of sags grandkids come after me with their pitchforks. Wealth inequality is only getting worse


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## m3s (Apr 3, 2010)

Beaver101 said:


> ... good for you. Just pay your taxes then ... for a pyramid scheme (my take after reading these crypto posts from m3s, etc.)


Boomers rely on more kids or immigrants working to pay their social benefits

Textbook pyramid scheme


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## Beaver101 (Nov 14, 2011)

m3s said:


> Boomers rely on more kids or immigrants working to pay their social benefits
> 
> Textbook pyramid scheme


 ... so who does the GEN Z (or re-start at GEN ZERO, etc.) rely on if they become an addict, homeless or an internet non-employed surfing/gaming bum?

As for the "textbook" pyramid scheme, you just discovered this? Don't you pay taxes, into CPP or a pension?


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## Beaver101 (Nov 14, 2011)

m3s said:


> There's a lot of young people much much wealthier who are still very active in the online communities everyday. They are very different from greedy boomers with wealth


 ... I'm sure there are and just as eccentric, if not more eccentric. 



> I plan to retire in the next few years. That isn't even a new plan. I don't plan to waste money like the boomers would do. I expect society will likely get very rocky during my time


 ... your right in this country to retiring any time you want. And how you spend "your" monies, just as with boomers on how to spend or waste 'their" monies. It's a free country (except for a few moaners).



> Maybe I should stock up on guns and ammo for when a hoard of sags grandkids come after me with their pitchforks. Wealth inequality is only getting worse


 ... no doubt wealth inequality is only to get worse - always been this way on a capitalistic society. [I'll leave sags to comment on your mentioning of his heirs.]


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## m3s (Apr 3, 2010)

Beaver101 said:


> ... so who does the GEN Z (or re-start at GEN ZERO, etc.) rely on if they become an addict, homeless or an internet non-employed surfing/gaming bum?
> 
> As for the "textbook" pyramid scheme, you just discovered this? Don't you pay taxes, into CPP or a pension?


Yes I pay a lot of taxes and no I didn't just discover this. I saw what happened in Europe 10 years ago. The only way to avoid this is to bring in immigrants but the boomers don't like them either

The younger generation will need to rely on themselves more using blockchains. Printing fiat money for the benefit of greedy boomers to destroy the environment will hopefully go out of style


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## sags (May 15, 2010)

The responses to the Reddit post on spending ETH to buy a coffee........

Stupid........because it will be worth a lot more in the future.......HODL

Stupid........because the "fee" will be $30 to verify the transaction on the blockchain.

Good.........because the tokens need to be spent to be considered worth anything.

So you buy a coffee......pay for the coffee and then pay intermediaries to verify the transaction for whatever amount they want to charge ?


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## sags (May 15, 2010)

Our grandkids will likely donate to the food banks, so those who lost everything on crypto can eat.

Gambling is loads of fun when the slot machine is paying out jackpots.

That is the achilles heel for addicted gamblers. They win and keep playing until all their money is gone.

Cash out your "millions" and buy GICs. With that kind of cash.....losing 1-3% to inflation is a non factor.

Remember....good luck is transitory......like inflation.


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## m3s (Apr 3, 2010)

sags said:


> So you buy a coffee......pay for the coffee and then pay intermediaries to verify the transaction for whatever amount they want to charge ?


This is why we have layer 2 solutions. Credit cards take weeks and months to settle but they transact on a faster layer. Ethereum should just be a settlement layer (that is much faster than the current ones)

We are basically in dial up era of the internet and Bill Gates is trying to explain to Larry King what the internet will be able to do in the future. Most people like Larry King cannot imagine these things and just laughs because in his mind radio, telephone, and TV are better than dial up internet. He can't imagine high speed internet yet because all he sees is dial up

And yet here we are on high speed internet. Things always change sags look ahead a bit further


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## Beaver101 (Nov 14, 2011)

No sooner was I going to log off and I see this headline, right from the Guelph's Police Headquarters:

Media Release – December 30, 2021

*



Male defrauded nearly $100k in crypto scam

Click to expand...

*


> _The Guelph Police Service Fraud Unit is investigating after a male lost nearly $100,000 in an online cryptocurrency scam.
> 
> A Guelph male attended the police station Wednesday to report the scam. *He was contacted by an unknown individual after posting in an online forum in September that he was looking for assistance learning how to invest in cryptocurrency.*
> 
> ...


 ... maybe I should post this also on the Scams Alert thread - been awhile.


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## JM1983 (Dec 30, 2020)

Beaver101 said:


> No sooner was I going to log off and I see this headline, right from the Guelph's Police Headquarters:
> 
> Media Release – December 30, 2021
> 
> ... maybe I should post this also on the Scams Alert thread - been awhile.


Scams, fraud and laundering doesnt happen in the traditional financial system. Dont blame Crypto, blame humanity for that one lol.


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## m3s (Apr 3, 2010)

There are lots of crypto scams in Discord and YouTube like that

Basically if you see a "livestream" of Elon Musk or anyone famous on YouTube with a link to send crypto in exchange for double the crypto in return.. it might be a scam. Lots of people on this forum message me about crypto and I don't even ask for referrals. Most scammer account were created recently. I've been here 10 years..

So @FairTrade when are you gonna send me some money for that great investment opportunity in $sagscoin?


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## sags (May 15, 2010)

Scams have always happened, but crypto created a more perfect vehicle to set them up and disappear forever with the money.

it is a big problem for crypto adoption when people don't trust in the integrity of the system.

If someone hacks my bank account the bank makes me whole. If someone hacks my credit card the company makes me whole.

If someone hacks a crypto exchange.......oh well, tough luck. You shouldn't have your money on an exchange.

People spread their money out over many financial institutions for the assurance of deposit insurance.

No such assurances within the crypto environment. It is the wild west where criminals roam free and without fear of getting caught.


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## m3s (Apr 3, 2010)

This is why there are all kinds of centralized crypto intermediary services popping up.

If you're the kind of person who thinks an email from a Nigerian prince is a great opportunity you should probably use an intermediary. How many people are dumb enough to fall for those scams? I know some dumb people but they aren't that dumb

I don't use random exchanges just like I don't hire random people to fix my roof


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## sags (May 15, 2010)

_Most people like Larry King cannot imagine these things and just laughs because in his mind radio, telephone, and TV are better than dial up internet. He can't imagine high speed internet yet because all he sees is dial up _

I doubt boomer Larry King is thinking much about anything, since he died last January.


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## m3s (Apr 3, 2010)

Apparently sags does not like the concept of future or the past

These people tend to prefer physical observations of the present rather than theories and concepts. High speed internet was just a concept and therefore not relevant

Things changed and things will continue to change going forward


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## KaeJS (Sep 28, 2010)

Beaver101 said:


> ... ask yourself this question, if you made millions (and by that I mean "real spendable monies", would you be revealing your "secrets" on this DIY forum?


M3s is not revealing any secrets lol.
This shyt is out there for you to learn. You could learn everything in a couple weeks. M3s is not going to benefit by you learning or making your own millions. There is nothing in this for him.



Beaver101 said:


> ... do you have something against boomers or just an inherent streak against ageism? I believe James4Beach is in your GEN category and read his earlier post about "crytocurrency" - summary: "it's a scam".


James isn't a boomer. But he certainly invests like one.



Beaver101 said:


> ... you must really hate your old lady, if not your old man for bringing you out to this world.


That was their decision to bring me into this world. Not mine. If I hated everything so much, I could always kill myself.

But this thread isn't about me. This is about crypto.


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## JM1983 (Dec 30, 2020)

sags said:


> Scams have always happened, but crypto created a more perfect vehicle to set them up and disappear forever with the money.
> 
> it is a big problem for crypto adoption when people don't trust in the integrity of the system.


People trust in the integrity of blockchain. Thats what blockchain is built on, trust. The challenge is you are your own bank and must be your own security. Good thing is you can create multiple wallets and diversify where you hold your money. And as others have mentioned, there will be services available to protect your holdings. But it is still an issue no doubt that will need to be improved.

Just curious what your thoughts are on digital ownership/proof of digital ownership and where you see that going in the future?


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## m3s (Apr 3, 2010)

JM1983 said:


> I myself am into Crypto. I stake my crypto. In a nutshell, I am receiving between 5 to 10% annual returns on my staking. Where does this 5 to 10% come from? Well, as an example, I stake a token called Algorand. Algorand is a smart contract blockchain protocol.


Big day for Algorand!! It's up almost 20% today

Should I FOMO in like a degen? I remember when AVAX did this it was under $20 and now it's over $100


__ https://twitter.com/i/web/status/1476244252522946569


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## Mechanic (Oct 29, 2013)

I would like to do a bit more crypto investing, but don't have any experience or knowledge on trading the actual currency and it seems a little involved. I listened to a friend talking about how he trades it multiple times a day, but it sounds like he makes pretty minimal money for his efforts from what I garnered. I have traded a bitcoin ETF that I have on my watchlist a few times, but that is it for me so far.


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## m3s (Apr 3, 2010)

I'm looking into moving some ETH and BTC over to the ALGO to play with their DeFi for the incoming incentives (yes sags the blockchains are already interoperable)

Magic internet money is magical. Did this on ETH DeFi, MATIC DeFi and then AVAX DeFi. Algorand has always been the sleeping giant. The incentives just keep getting better

Cardano is also about to launch its first 20-30 dApps in Q1 2022. Competition is good! It's a degen gambler's market


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## m3s (Apr 3, 2010)

Mechanic said:


> I listened to a friend talking about how he trades it multiple times a day, but it sounds like he makes pretty minimal money for his efforts from what I garnered. I have traded a bitcoin ETF that I have on my watchlist a few times, but that is it for me so far.


Trading is not easy. I made the best gains by just holding for years. Trading would be a lot easier if not for capital gains taxes

Bitcoin ETF is ok but not ideal. Better to look into something like Gemini (is it in Canada?) or Kraken. Both offer staking services for yields

I would avoid Binance. Coinbase is ok but Kraken and Gemini are better


----------



## JM1983 (Dec 30, 2020)

m3s said:


> Big day for Algorand!! It's up almost 20% today
> 
> Should I FOMO in like a degen? I remember when AVAX did this it was under $20 and now it's over $100
> 
> ...


Algo making moves. Its a solid project and Silvio Micali, the founder, is a big reason Algo will do well. If you do buy, look into the governance staking.


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## m3s (Apr 3, 2010)

Yea I've staked many tokens. I like yield

I always considered ALGO a sleeping beast. I'm looking into moving my AVAX DeFi assets over to ALGO now

Probably no coincidence ALGO starts an incentive program as the AVAX program winds down


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## Beaver101 (Nov 14, 2011)

JM1983 said:


> Scams, fraud and laundering doesnt happen in the traditional financial system. Dont blame Crypto, blame humanity for that one lol.


 ... you do have a point - guns don't kill, only people kills. 

Scams, frauds, money-laundering, pyramid schemes involving all types of assets and derivatives like options and crypto are man-made so yeah, humanity with its greed is to be blamed. 110% true.


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## Beaver101 (Nov 14, 2011)

KaeJS said:


> M3s is not revealing any secrets lol.


 ... you said it here ... m3s is not revealing any secrets here to make his millions. Just recruiting and bragging ...oops, the latter should be "discussing", correct? And then the next accusation of I'm so jealous he's making gazillions and I'm not.



> This shyt is out there for you to learn. You could learn everything in a couple weeks.


 ... why would I want to learn this kind of sh1t when there're plenty of other sh1t to learn out there as if I need to have a FOMO.



> M3s is not going to benefit by you learning or making your own millions. There is nothing in this for him.


 ... could care less as not wasting my time with this sh1t either.



> James isn't a boomer. But he certainly invests like one.


 ... and what's wrong with that as you got something against boomers again just like your earlier comment?



> _"If boomers actually opened some wallets and started learning some things, you'd see how possible this is._


 ... why should boomers or anybody else be opening their wallets for you scammers (and young at that) can "benefit". But then don't let me stop you from opening your wallet so you can learn something for a change. 

In actuality, you don't even have to open your wallet to learn something only if you have a look at yourself first.



> That was their decision to bring me into this world. Not mine.


 ... true but then did they not cloth and feed you since a baby or did you explode and landed on earth as a piece of rock?



> If I hated everything so much, I could always kill myself.


 ... no, I didn't say you hated "everything". Far from it ... there's only a segment of society that you definitely hate by the tone of your posts.



> But this thread isn't about me. This is about crypto.


 ... correct, so what's with the continuous reference on "boomers" in many of your posts?


----------



## m3s (Apr 3, 2010)

beav and sags sure spend a lot of time in the crypto threads for boomers who aren't interested in crypto

If I wanted to brag you would have figured it out long ago or I would buy flashy things like a boomer. You just need to put things into perspective

It's always the same. You either don't know anything or you're just bragging. Silly boomers


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## Beaver101 (Nov 14, 2011)

m3s said:


> beav and sags sure spend a lot of time in the crypto threads for boomers who aren't interested in crypto
> 
> If I wanted to brag you would have figured it out long ago or I would buy flashy things like a boomer. You just need to put things into perspective
> 
> It's always the same. You either don't know anything or you're just bragging. Silly boomers


 ... don't you think your third statement doesn't jive with your first? How can one be bragging in a thread that they have no interest in?

And strangely enough, a non-bragging or non-flashy millionaire crypto -expert like yourself is so immersed or worked up in 'discussing' it under the General Discussion section instead of the Financial sections (up above the forum)? Got something else to hide?


----------



## m3s (Apr 3, 2010)

Beaver101 said:


> General Discussion section instead of the Financial sections (up above the forum)? Got something else to hide?


Wat?

Yes I shop at goodwill to turn inflation into deflation. If Cathie Wood knew this one trick her fund wouldn't be down from all time highs.

I outperformed her funds all week with GICs and bonds. She just brags and I'm not even jealous


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## sags (May 15, 2010)

You claim to have earned millions of dollars in the past year and worry about a cup's worth of inflation.

You sound like someone who is seeing snow for the first time..........oh look inflation........run away, run away.


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## m3s (Apr 3, 2010)

I don't worry about inflation at all sags

I don't think you understand what that word means yet. It's not good for GICs.

Inflation inflates the value of assets not the contrary like you have said


----------



## james4beach (Nov 15, 2012)

Beaver101 said:


> ... do you have something against boomers or just an inherent streak against ageism? I believe James4Beach is in your GEN category and read his earlier post about "crytocurrency" - summary: "it's a scam".


For the record, I'm a millennial (in my 30s).


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## Beaver101 (Nov 14, 2011)

m3s said:


> Wat?
> 
> Yes I shop at goodwill to turn inflation into deflation. If Cathie Wood knew this one trick her fund wouldn't be down from all time highs.
> 
> I outperformed her funds all week with GICs and bonds. She just brags and I'm not even jealous


 ... I gather you're just being facetious here as since when did ARK as managed by Ms. Wood invested in fixed instruments? 

As for Ms. Wood, I rather admire her to be continuously holding down the fort in managing those funds for a bunch of juveniles (old and young), acting like investors.


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## Beaver101 (Nov 14, 2011)

m3s said:


> I don't worry about inflation at all sags
> 
> I don't think you understand what that word means yet. It's not good for GICs.
> 
> Inflation inflates the value of assets not the contrary like you have said


 ... even a dummy like me can see why sags said "inflation is good for GICs" - that's because rates will be going up ... for GICs that is, not food or goods ... that alot of investors hold ... for counter-measures aka "balance". 

Not everyone holds BTCs or what-have-you-manmade-imaginary eggs (and some at 99%) in their baskets.


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## Beaver101 (Nov 14, 2011)

james4beach said:


> For the record, I'm a millennial (in my 30s).


 ... I'm aware of that and so is KaeJS. And yet he seems to have an issue with "boomers" or the older generations before him on specifically how they (boomers) invest.

[Must be true that the GEN Zs are telling the millenials and the older folks what to do at work or who is the boss these days.]


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## MrMatt (Dec 21, 2011)

Beaver101 said:


> ... I gather you're just being facetious here as since when did ARK as managed by Ms. Wood invested in fixed instruments?
> 
> As for Ms. Wood, I rather admire her to be continuously holding down the fort in managing those funds for a bunch of juveniles (old and young), acting like investors.


I admire Cathie Wood for managing to be successful in spite of her apparent inability to actually do the job.

How many funds has she run into the ground? How many visionary leaders has she publicly disagreed with?
Honestly I can't think of why anyone would listen to her, or trust her with your money.


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## Beaver101 (Nov 14, 2011)

MrMatt said:


> I admire Cathie Wood for managing to be successful in spite of her apparent inability to actually do the job.


 ... hey, she's a great marketer.



> How many funds has she run into the ground? How many visionary leaders has she publicly disagreed with?


 ... no idea, don't follow her nor the funds themselves. More interested in the kind of "investors" buying into or believing in her funds.


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## m3s (Apr 3, 2010)

Beaver101 said:


> ... even a dummy like me can see why sags said "inflation is good for GICs" - that's because rates will be going up ... for GICs that is, not food or goods ... that alot of investors hold ... for counter-measures aka "balance".


I asked sags to explain how he thought inflation was good for GICs in case I was missing something cosmic.

He wrote a wall of text about how they gain more than they spend on inflation by shopping retail marketing ploys (black friday) buying depreciating assets in cash (cars) and shopping at goodwill (ok) Apparently he has discovered a magical way to turn rampant inflation into deflation and therefore inflation is good for GICs in his world

None of it was about rates going up. As I understand GICs usually have locked rates.. Are your GICs variable rates? Any variable rate GICs I see on the market are even worse.

So again please explain to me how exactly is inflation good new for GICs? You say I am the dummy and I am open to learning what I am missing here. I'll wait @Beaver101



sags said:


> *Sounds like good news for people who have their savings stashed in GICs.*





m3s said:


> How exactly is inflation good news for GICs sags?
> 
> The real return is negative when rates are less than inflation.. and you may even pay income tax on negative real returns
> 
> What am I missing here?





sags said:


> *They gain more in interest than they spend on inflation.*
> 
> If someone has $100,000 in GICs, they don't have to run out and spend it right away.
> 
> ...


sags now claims in this thread that anything priced in USD declines in value with the USD. This is either a fundamentally flawed understanding of the very basics or a cosmic discovery that should be a PhD economic thesis.

If USD is devalued then it has less value which means it buys less bread, less RE, and less assets.. because it is devalued. Yet sags claims that anything "priced" in USD such as BTC declines with USD. At the same time sags claims that this is good for GICs. He has it completely *** backwards.

I've tried not to embarrass people and asked for an explanation in case I am misunderstanding and got a wall of bs text. They keep repeating this bs over and over without learning a thing. This can hurt others who are actually here to learn


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## m3s (Apr 3, 2010)

Beaver101 said:


> ... I gather you're just being facetious here as since when did ARK as managed by Ms. Wood invested in fixed instruments?


Wat?

sags likes to point out when things are down from their all time highs even if they are up over a month or a year

If only Cathie Wood was on sags level she too would understand that inflation is good news for GICs


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## Beaver101 (Nov 14, 2011)

m3s said:


> I asked sags to explain how he thought inflation was good for GICs in case I was missing something cosmic.
> 
> He wrote a wall of text about how they gain more than they spend on inflation by shopping retail marketing ploys (black friday) buying depreciating assets in cash (cars) and shopping at goodwill (ok) Apparently he has discovered a magical way to turn rampant inflation into deflation and therefore inflation is good for GICs in his world


 ... well, with the way you spin it (as in a different context or application to "world economics"), then I can see why you didn't understand what sags was trying to say.



> None of it was about rates going up.


... then what are "interest" that sags was referring to based on?


> As I understand GICs usually have locked rates.. Are your GICs variable rates? Any variable rate GICs I see on the market are even worse.


 ...yes, rates are locked in - for a period of time (eg. 1,3,5 years), not forever. Yes, there're variable rated GICs known either as cashable or step-ups, again rate changes after a period of time. (eg. 30 days, 1st or 3rd anniversary). Regardless, those rates are guaranteed as with your principal for the duration of your investments. You can't lose money "on your investment" or end up less than your principal.



> So again please explain to me how exactly is inflation good new for GICs? You say I am the dummy and I am open to learning what I am missing here. I'll wait @Beaver101


 ... I did not say you're the dummy ... it's the reversal.

If you understood sags' wall of text (aka took it in the proper context), inflation is good news "for GICs" based on the expectation of increasing rates (aka more interests) for GIC investments, especially for "savers", not spenders. If you're a saver, higher inflation means higher rates meaning more interests. At the same time, one has to spend so one attempts to beat the inflation by other means such as buying at goodwill, getting 50% discounts, etc. or basically sags' wall of text.



> sags now claims in this thread that anything priced in USD declines in value with the USD. This is either a fundamentally flawed understanding of the very basics or a cosmic discovery that should be a PhD economic thesis.


 ... he's looking at the USD relative to the value of the Canadian dollar here after the exchange. Ie. buy a USD at $1.35 CD. If the forex goes down to $1.20, then you just paid 15c more for that USD that you're still holding or lost 15c if you were to convert it back to CD.



> If USD is devalued then it has less value which means it buys less bread, less RE, and less assets.. because it is devalued. Yet sags claims that anything "priced" in USD such as BTC declines with USD. At the same time sags claims that this is good for GICs. He has it completely *** backwards.


 ... see above explanation. You have to keep in mind this is a Canadian money forum so most of us begin our investments with CD$



> I've tried not to embarrass people and asked for an explanation in case I am misunderstanding and got a wall of bs text. They keep repeating this bs over and over without learning a thing. This can hurt others who are actually here to learn


 ... I had no problem understanding him even without having to read his wall of (bs) text. If you really wanted to argue with him that "inflation" is not good for GICs, you could have simply told him that keeping money under the mattress might have been better.

*Add:* Even you may be more knowledgeable, most definitely in the BTC arena, sags has more (life) experience than you so you can't deny that or he doesn't know what he's talking about (aka your version of BS).


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## m3s (Apr 3, 2010)

Beaver101 said:


> If you understood sags' wall of text (aka took it in the proper context), inflation is good news "for GICs" based on the expectation of increasing rates (aka more interests) for GIC investments, especially for "savers", not spenders. If you're a saver, higher inflation means higher rates meaning more interests. At the same time, one has to spend so one attempts to beat the inflation by other means such as buying at goodwill, getting 50% discounts, etc. or basically sags' wall of text.


Wat?

@Beaver101 inflation is not good for savers. Inflation is not good for GICs.

Even if GIC rates go up they are still below inflation



Beaver101 said:


> ... he's looking at the USD relative to the value of the Canadian dollar here after the exchange. Ie. buy a USD at $1.35 CD. If the forex goes down to $1.20, then you just paid 15c more for that USD that you're still holding or lost 15c if you were to convert it back to CD.


The USD CAD forex rate has no impact on crypto.

@sags said that if USD is devalued then BTC is also devalued because BTC is priced in USD. If USD is devalued then anything priced in USD will cost more. This is very basic and the CAD rates has absolutely no impact at all.

I stopped reading the rest of your wall of gibberish


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## Beaver101 (Nov 14, 2011)

^ Whatever. Up to you. I'm not a promoter.


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## m3s (Apr 3, 2010)

@FairTrade I found a good website that shows revenues of crypto platforms

Token Terminal

Nearly $10B revenue for ETH over 1 year and over $1B in the last month. You can also see that dApps are also generating billions in exchange fees. Several have more volume and value than exchanges like Coinbase

Let's ignore the off topic village idiots, trolls and buffoons


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## sags (May 15, 2010)

You confuse "price increases" with "inflation".


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## sags (May 15, 2010)

You also don't understand how pyramid and ponzi schemes work.

They pay out as promised for a short period of time and then one day......poof, they are gone with all the investor money.

How many times does it have to happen before the "enlightened" ones realize they got scammed ?


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## m3s (Apr 3, 2010)

No sags, inflation is not good news for GICs










Are you aiming to be the village idiot or the buffoon?


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## sags (May 15, 2010)

Why did oil drop to $20 during the pandemic spending in 2020 ? Inflation ?


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## m3s (Apr 3, 2010)

sags said:


> You also don't understand how pyramid and ponzi schemes work.
> 
> They pay out as promised for a short period of time and then one day......poof, they are gone with all the investor money.
> 
> How many times does it have to happen before the "enlightened" ones realize they got scammed ?


Naw I understand basic concepts

CPP requires new workers to pay into CPP in order for retirees to receive their benefits. This is a pyramid scheme.

Thinking that a 50% black friday sale makes inflation good is a scam


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## m3s (Apr 3, 2010)

sags said:


> Why did oil drop to $20 during the pandemic spending in 2020 ? Inflation ?


Supply and demand sags

It's a commodity. I understand this and it's not by luck either


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## sags (May 15, 2010)

You are lending money to people you don't know, but they need money and can't access it anywhere else, so they put up sketchy crypto as collateral.

Why not lend to people with bad credit for 15% a week like payday loan companies ? At least you will know the names of the people who default.

People could borrow and then default and let you keep their crypto.......and you would have no recourse.

A 14% annual return doesn't come close to paying a return for the level of credit risk you undertake.

Payday loans charge 400% interest annually to reflect that high level of credit risk and default.


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## james4beach (Nov 15, 2012)

MrMatt said:


> I admire Cathie Wood for managing to be successful in spite of her apparent inability to actually do the job.


She actually has a terrible track record. She also used to run a hedge fund (Tupelo) during the dot com years, and that failed. The investors pulled their money and she left the hedge fund as well.

I'm not sure why anyone would entrust money to her, given her horrendous long term track record.


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## Beaver101 (Nov 14, 2011)

A finance professor’s advice on investing in bitcoin: Just say no

Can't be better timing. Article just went behind a paywall but title says it all.


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## Beaver101 (Nov 14, 2011)

james4beach said:


> She actually has a terrible track record. She also used to run a hedge fund (Tupelo) during the dot com years, and that failed. The investors pulled their money and she left the hedge fund as well.
> 
> I'm not sure why anyone would entrust money to her, given her horrendous long term track record.


 ... great marketer (aka snakes-oil salesperson). 

Edit: Let me retract that snakes-oil label. After-all her fund is registered with the securities commissions. It's the investors aka suckers.


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## james4beach (Nov 15, 2012)

Beaver101 said:


> ... great marketer (aka snakes-oil salesperson).


Yeah, just another charlatan. There are tons of them on Wall Street.


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## sags (May 15, 2010)

It isn't her money she is losing, and she shows no signs of caring about it either.


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## m3s (Apr 3, 2010)

Beaver101 said:


> A finance professor’s advice on investing in bitcoin: Just say no
> 
> Can't be better timing. Article just went behind a paywall but title says it all.


That article doesn't even begin scratch the surface and makes a lot of false assumptions

If you are going to critique something new you need to understand the counter argument. He clearly does not and there's no point explaining here when the basics need to be explained over and over

Just because someone taught legacy finance does not mean they understand crypto (then again if he was good in legacy finance he should be on Bay street not writing click bait for G&M ads)


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## reccoso (Dec 16, 2010)

@m3s 
What’re your thoughts on Wealthsimple for
Crypto? They’ll apparently soon allow for coins to be moved into wallets.


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## Beaver101 (Nov 14, 2011)

m3s said:


> That article doesn't even begin scratch the surface and makes a lot of false assumptions
> 
> If you are going to critique something new you need to understand the counter argument. He clearly does not and there's no point explaining here when the basics need to be explained over and over
> 
> Just because someone taught legacy finance does not mean they understand crypto (then again if he was good in legacy finance he should be on Bay street not writing click bait for G&M ads)


 ... hey, he's the one with the PHD. 

Let me put it this way, just based on the title of the article, it's the same as saying what Warren Buffett was saying ... along the lines "if you don't understand it, you shouldn't even be invested in it". Okay, here was his exact saying "Never invest in a business you cannot understand". I don't suppose you can claim Mr. Buffett was wrong there.


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## m3s (Apr 3, 2010)

reccoso said:


> @m3s
> What’re your thoughts on Wealthsimple for
> Crypto? They’ll apparently soon allow for coins to be moved into wallets.


I don't even look at it unless they let you withdraw.

Look into FTX, Gemini, Kraken instead



Beaver101 said:


> ... hey, he's the one with the PHD.
> 
> Let me put it this way, just based on the title of the article, it's the same as saying what Warren Buffett was saying ... along the lines "if you don't understand it, you shouldn't even be invested in it". Okay, here was his exact saying "Never invest in a business you cannot understand". I don't suppose you can claim Mr. Buffett was wrong there.


PhD just means he is an academic. If he was open to discussing his article I would respectfully disagree. There are PhDs arguing the opposite at MIT btw

If he is smart he would also respect me. There are many people in this world who have achieved great success without a PhD. Academia is not even the real world. It's great for putting kids in debt though and giving them some paper credentials to go work a Timmies or maybe write some clickbait for G&M boomers to read

I agree with Mr. Buffet. I would also say you shouldn't critique or argue against something that is out of your lane. Ie this PhD should take Buffet's advice


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## KaeJS (Sep 28, 2010)

reccoso said:


> @m3s
> What’re your thoughts on Wealthsimple for
> Crypto? They’ll apparently soon allow for coins to be moved into wallets.


No. Wealthsimple sucks for crypto. They charge high spreads, you can only view prices in $CAD. No keys/wallet, no transfer abilities...

I don't recommend.


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## m3s (Apr 3, 2010)

sags said:


> You are lending money to people you don't know, but they need money and can't access it anywhere else, so they put up sketchy crypto as collateral.
> 
> Why not lend to people with bad credit for 15% a week like payday loan companies ? At least you will know the names of the people who default.


The DeFi loans are over collateralized sags. It's nothing like a payday loans or loans to bad credit. I'm not that interested in magic fiat money or negative real returns

Either you have the collateral or you don't. I loan to some protocols and the risk is in the code not default. The code either executes properly or it doesn't. The yield does reflect the risk and I manage the risk as I would anywhere else

You are way in over your head here.


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## depassp (Mar 22, 2020)

FairTrade said:


> My sister has 'invested' in crypto and says she is getting a dividend payment from it. Where can that money be coming from if there is no profit from sales? Can someone please explain how this is sustainable?


BTCY is an ETF that trades on the TSX (aka you can hold it in your TFSA).


> Yield is generated by selling covered call options on the underlying Bitcoin (or Ether) and collecting the associated premium.


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## Fain (Oct 11, 2009)

sags said:


> You are lending money to people you don't know, but they need money and can't access it anywhere else, so they put up sketchy crypto as collateral.
> 
> Why not lend to people with bad credit for 15% a week like payday loan companies ? At least you will know the names of the people who default.
> 
> ...


14% annual return is great and I know who my money is with. Crypto.com deals with massive brands as well and have a multi-billion equity cushion as well. 90-day lockups.

Sure there is a small amount of default risk(less than 1% likely) but I'm dealing with a regulated entity, audited by Deloitte, that is profitable, growing, and has a valuation in the tens of billions of dollars.


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## sags (May 15, 2010)

I understand your motivation. What I don't understand is the credit worthiness of a borrower who has to pay a 14% interest rate.


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## m3s (Apr 3, 2010)

sags said:


> I understand your motivation. What I don't understand is the credit worthiness of a borrower who has to pay a 14% interest rate.


There is no credit worthiness sags. I have explained this to you at least a dozen times. Not sure if you can't understand big words or have other issues

The borrowers have to put up collateral and can only borrow 40-60% depending on the collateral and the protocol. This is what you call an over collateralized loan.

The lender is depositing to a smart contract. Something like crypto.com is a centralized service interacting with DeFi for the end user.


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## sags (May 15, 2010)

_There is no credit worthiness sags._

Yea, that is what I thought. No collateral of proven value either apparently.


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## sags (May 15, 2010)

I am thinking an interest rate of 400% might be more appropriate for such loans, as it is a higher credit risk than payday loans to homeless people.


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## m3s (Apr 3, 2010)

The market doesn't care what you think. Especially when you don't know anything

Comparing to payday loans is like comparing wall phones to smart phones.

You have to look ahead and learn new things. Otherwise enjoy to your GICs


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## FairTrade (Apr 29, 2021)

m3s said:


> The borrowers have to put up collateral and can only borrow 40-60% depending on the collateral and the protocol. This is what you call an over collateralized loan.


Thanks to all, especially m3s, for doing their best to stay on topic and sharing their knowledge and experience.
If I have $1000 in my wallet and borrow $500 from a lender paying 15% for it, does my $1000 get locked in until I repay the $500? Or do I still have access to the whole $1500? Can I exchange it for USD? Can my loan be called at any point? What is stopping me from pulling it out and never repaying it? If the $1000 collateral has to stay locked in, why would I do this in the first place? Am I borrowing 50% to lend it as well as my capital to someone else?
So I think I understand the supply side but I'm having a hard time wrapping my head around the practical demand side of the system. Why would anyone borrow $500 with a high interest rate if they already have $1000?


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## nathan79 (Feb 21, 2011)

FairTrade said:


> Thanks to all, especially m3s, for doing their best to stay on topic and sharing their knowledge and experience.
> If I have $1000 in my wallet and borrow $500 from a lender paying 15% for it, does my $1000 get locked in until I repay the $500? Or do I still have access to the whole $1500? Can I exchange it for USD? Can my loan be called at any point? What is stopping me from pulling it out and never repaying it? If the $1000 collateral has to stay locked in, why would I do this in the first place? Am I borrowing 50% to lend it as well as my capital to someone else?
> So I think I understand the supply side but I'm having a hard time wrapping my head around the practical demand side of the system. Why would anyone borrow $500 with a high interest rate if they already have $1000?



The $1000 is locked up until the loan is repaid. They do it because they don't want to sell their crypto or trigger capital gains. It's cheaper to pay the 15% interest, especially if they expect the value of their crypto to go up.


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## m3s (Apr 3, 2010)

FairTrade said:


> Why would anyone borrow $500 with a high interest rate if they already have $1000?


For many reasons

First you need to reframe from thinking about everything in weak fiat terms. It's might be easier to think about using equity and margin loans where a margin call is triggered by a decentralized finance protocol

Let's say you have 1000 BTC with an ACB of $100 and you are bullish BTC long-term but you also want to spend $10M on a yacht. You could sell 200 BTC plus another 100 BTC to pay the capitals gains tax. You lose 300 BTC and a year later BTC doubles is value. Doh

Instead you could supply 500 BTC to a DeFi lending protocol in exchange for 1% APY in their governance token (these governance tokens tend to appreciate far more than BTC itself but that depends) Now you can borrow up to 60% of the value you supplied. You borrow $10M in USDC and the loan increases at 12% in USDC terms.

If BTC drops in value relative to USDC you may want to supply more of your BTC to keep a safe buffer from being liquidated. This is your own responsibility. Obviously if you borrow too much you could lose your supplied collateral. The yacht is not collateral. You still hold the 500 BTC you didn't supply and 500 BTC tax loss

If you were really degenerate and knew BTC was on sale from all the boomer FUD from clickbait articles and saggy old media.. you could also borrow USDC and swap it for more BTC and then supply that BTC back into the protocol for more governance tokens. Then you can take those governance tokens and swap or supply them for more yield

That is where yield optimizers and auto-compounding vaults come into play. Not for beginners or saggy boomers


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## gardner (Feb 13, 2014)

m3s said:


> The lender is depositing to a smart contract.


When you lend to a smark contract, is this one you wrote the actual Solidity code yourself and compiled and signed the bytecode with your own toolchain?


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