The Stock Market, Investments, and Investing Thread
(03-21-2020, 08:34 PM)Viejo Sabio Wrote: So how easy is it to lose the "key" to the bitcoins in your cyber vault?

I am only going to respond to this in terms of bitcoin, because I could give less than two shits about any other crypto, and of course, if we are referring to other cryptos there are going to be other issues.. so I will leave that for someone else to address to the extent that anyone wants to address those shitcoin concerns.

Regarding bitcoin, there have been a lot of developments of new storage systems over its more than 11 years of existence, and surely, if you are barely starting in bitcoin and you only have a few thousand invested, then it may not matter too much where you hold your coins, or at least the level of security might not be as BIG of a deal, both in terms of how much you have to lose or whether you would be a target.

So, some people suggest that both your level of concern and your level of security measures are going to be connected with the amount of value that you are trying to secure.

Of course, during times of considerable price appreciation (even the 78x price appreciation that happened between late 2015 and late 2017) might cause guys to feel that it is necessary to take way stronger security measures, so if a guy had $1,000 in bitcoin in late 2015, and was ignoring his security, then all of a sudden at the end of 2017, he notices that he has $78k, and he might become quite concerned about how those bitcoins are being stored. That was part of the issue in some of those anecdotal examples that was shown in the earlier video that Contrarian had linked. Bitcoin was hardly worth shit, and then after BTC prices went way the fuck up after a few exponential price rises, then some people realized that they had been sloppy with how they had been securing their bitcoins.. and the first example in the video was the guy who had 7,500 bitcoins that were hardly worth anything when he had first acquired them.. maybe less than $100, but also even that was not clear in 2010 in terms of the market value or even how the fuck to cash them out. But today, 7,500 bitcoins would be worth more than $47 million dollars. Crazy shit like that. One of the first transactions in bitcoin was in 2010 when a guy named Lazlo had bought two pizzas for 10k bitcoins, which would be worth $63 million today..

Anyhow, back to security and storing your bitcoins. I don't proclaim to know all of the methods of accomplishing such secure storage, but I would presume that guys that have anywhere between $5k and $100k would be o.k. to store their bitcoin on some kind of hardware wallet, like a trezor or ledger or coldcard, and sure they are not without risk but they do provide for a decent amount of security, control and even abilities to back them up, and if the value is more than $100k, then surely sometimes it could be possible to store some of the value on different devices or even to use some kinds of multi-signature storage, but another enemy of losing coins (probably one of the most common ways) is that BTC HODLers might employ security measures that are way the fuck too complicated and end up locking themselves out of their own coins... .and part of the problem of being your own bank is that if you fuck up, there is no one that you can go to in order to recover your password, in many cases... sometimes, depending on how you store your coins, there may be ways to recover from fuck ups... such as hiding a back up seed in a place that is separate from your device, so if you fuck up your device, or lose it or get it stolen or damaged, you can go to that other location and then reload the keys onto another similar device or even a different device that uses the same back up method.


(03-21-2020, 08:34 PM)Viejo Sabio Wrote: How easy is it for someone else to access them and steal them or devalue them?

ease of someone else to access your coins is going to vary depending on your storage mechanism, so it is not necessarily easy to access or steal someone's coins, but sometimes attack vectors will be discovered at a later date, so even some hardware devices might be secure in a lot of situations, but subsequently, it is found out that if someone gets physical access to the device, then they can hack into the device, so in that case you either want to make sure that no one with any kind of technical sophistication gets physical access to your device or another solution is to add an additional password, which would then require that they know the extra password, but you would not want to make the additional password so complicated that even you are not able to access it because you cannot remember it.

Again, I doubt that the need to keep updated and security on your coins should stop anyone from investing into bitcoin, but of course, the more value that they hold, the more seriously they have to consider the matter and take precautions. And, surely, a lot of these matters make more sense after engaging a bit with different kinds of ways of holding your bitcoin and even sending and receiving them.

(03-21-2020, 08:34 PM)Viejo Sabio Wrote: OK if it sounds dumb then shame me. I admit I don't know how this thing works. I guess I'm old school and like to know my access to my wealth is as safe as possible.

It does not seem dumb to me, and of course there are even risks with traditional investing methods in terms of getting access or losing access to your wealth... .or sometimes there can be costs in terms of keeping your wealth too, so maybe a lot of those considerations and safety measures are going to vary depending on if you are referring to tens of thousands, hundreds of thousands or millions of dollars in wealth and assets.


(03-21-2020, 08:34 PM)Viejo Sabio Wrote: I realize we are one electromagnetic pulse from being in deep trouble.

I don't think that electromagnetic pulse would wipe out all of bitcoin, but I am NOT sure. Seems like a long shot from what I understand about electromagnetic pulse... but hey, if I am naive about that, then I must really going to be fucked. Wouldn't an electromagnetic pulse that would be capable of wiping out bitcoin be worse for traditional assets? For example, if a electromagnetic pulse screwed up one side of the planet, but not the other, then it seems to me that bitcoin would survive (but have to regroup) in that kind of scenario, but other traditional operations might be more fucked because they are more centralized than bitcoin... Maybe someone else should explain if I am missing something important because I consider EMP to be a kind of less than 1% event that requires about that amount of preparation rather than being something that we structure our lives around.


(03-21-2020, 08:34 PM)Viejo Sabio Wrote: I also realize that hackers can drain your accounts so fast it will make your head spin.

O.k. Yes. If you have access through an exchange, and you use your sim on your phone for your authentication, and then hackers get your phone and email and then access your account, then they can log into your exchange and change the password, so once they get into your account, they might be able to withdraw all of your funds. Once bitcoin is transferred it is irreversible, so it may take only a few minutes to transfer funds out of online accounts if hackers get into them, and hackers have become quite good at those kinds of attack and especially will target folks who have various kinds of vulnerabilities in their account security. I think that part of the reason why people do not want to keep very many of their funds on exchanges is because they fear hacker attacks, which are definitely a real problem, and some security measures can make it more difficult for hackers, but might not be enough for determined hackers.

There are a lot of people who have thousands, hundreds of thousands or multi-millions on exchanges, so some of the security options that are available have improved for securing accounts on exchanges.


(03-21-2020, 08:34 PM)Viejo Sabio Wrote: It's still possible, even likely to be recompensed (except for an electromagnetic weapon) but what happens if your bitcoins are raided? Yeah I know if it sounds dumb so be it but I am curious.

I doubt that you are going to get recompensed for losses on exchanges in many circumstances, and if there is any way to blame you, then they will. Furthermore, yeah, if bitcoins are raided, then you are fucked because if you lose them, there is no fucking way to get them back.

By the way, just because bitcoin transactions are irreversible, that does not mean that it is not prudent, practical or potentially profitable for guys to figure out ways to hold bitcoin. I surely cannot outline all reasons or all security precautions that can be taken or should be taken, but there are a decent number of folks who have made a whole fucking lot of money through bitcoin, and they have also hedged the value of their various investments and they have also given themselves a decent amount of autonomy and options.

Surely, we do not know with any kind of precision where bitcoin is going as compared with other possible investments, but there surely seems to be a lot of uncertainty in other markets (assets) currently, too, and personally, I don't see any reason why bitcoin is necessarily going to be correlated to other asset classes, especially if we look at the matter in a longer term trajectory.. even though in the short term it remains quite possible that bitcoin could do worse than some other investments... guys should be considering these kinds of matters, and of course, my long term consistency has been to suggest that guys both consider their own financial situation and that they consider investing between 1% and 10% of their quasi-liquid investment assets into bitcoin. Of course, any guy would not necessarily be able to accomplish that right away, and also guys might decide that their situation justifies investing outside of that range.. but those kinds of decisions are surely within individual discretions that can reasonably vary and may or may not end up balancing out well, which remains the case with any investment and allocation decisions that might be made and especially feel pressing about whether investing allocations need to be reconsidered or not during times like these.
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RE: The Stock Market, Investments, and Investing Thread - by JayJuanGee - 03-21-2020, 09:41 PM

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