Hello, With bitcoin in the news I thought I'd make a thread about my experience in the space. I bought my first 10 bitcoin in 2011 and my first coinbase purchase was 2013, buying 20 for $99 each. I ran a small side business in several underground forums. It sounds trivial and it was trivial until I got up to about 100 regular customers. I ran the business like a gold and silver exchange, PayPal or any electronic transfer for immediate exchange into bitcoin. My cut was a 8-12% spread which is consistent with the gold and silver trade. I got up to about $20k in volume per month and maintained that for 6 months. Then I got a call from PayPal and google pay asking questions about the business and requesting certification and documentation. They seized both accounts with a good amount of money in them. I was only about 24 at the time. I paid all relevant taxes. To maintain what I was doing I would have needed to register myself like an ATM or money exchange and would be liable for all proper contact vetting. Anyways, I've been obsessed with bitcoin and just about everything crypto and if anyone wants to ask something to somewhat of a subject matter expert on the bitcoin protocol, applications of blockchain, and the crypto markets... Fire at will. #tech #bitcoin #crypto #blockchain
How much money do you have in crypto? How much did you make running your exchange?
I have 2.0 BTC in cold storage right now. I have .7 in a gambling/bullshitting account. I controlled 40 at one point, but was young and naive and didn't learn until later to always hang onto your winners. Made some good coin but I'd much rather have those 40 still today. I started out making about $300 a month and my best month I made $5k. I made about $30k over 3 years.
Do you think it is best to keep your coins with coin base or on a personal thumb drive ?
Within those options there is a wide spectrum of operational security measures. On Coinbase they have a vault feature that's fairly well-vetted, keeps your coins in cold storage, and allows for m-of-n approval mechanism. For personal thumb drives there are ways to back this up, such as in the cloud or multiple thumb drives, and also configure your own m-of-n approval scheme. To change the question to what is better, cold/offline storage or hot/cloud wallet/exchange storage that's a no-brainer. Cold storage is the gold standard. I use a hardware wallet called Coldcard, which is a pretty cool product allowing me to conduct air-gapped transactions. The long and short of it is that consider the amount of bitcoin your keypair controls to be like a suitcase of cash. Trusting someone to carry it, that better be a high degree of trust. Carrying it yourself, you better know where you're going and what to do when you get there.
Yea, it's a pretty weak position, but I've followed the crypto markets enough to know nothing is for certain in these speculative assets. I've syphoned off most of my holdings into ETF's over the past few years and have done fairly well doing that. I just don't have the risk tolerance I used to have when I was single without kids.
What color is your lambo?
Was HF one of the forums? If so our paths might have collided. Good to see another holder from the olden days. Do you still hold any BTC or sold all of it?
I dont know HF. Still holding some, not as many as I wish I was :)
Why did you only buy 20?
I had 30k in student debt and was making $40k a year. It's all I could afford.
What’s your take on the future of crypto companies like Coinbase?
Coinbase is a monster. I don't really have a take other than it's imperative that they maintain their reputation for being well-vetted and secure. They can be expensive if you don't know how to purchase on Coinbase Pro e.g. buy USD coin with a debit card and convert vs the $3 buy button. Solid company and it will be fun to watch their growth.
What's your take on BTC Vs ETH?
Fundamentally different applications of distributed ledgers. BTC is cool because the creator will, likely, never be known. ETH is cool because Vitalik is a badass and a true pioneer in the space. Excited for what innovations in smart contracts will bring to the world. Equally bullish.
I'm asking from the perspective of adoption & asset value?
Do you feel yourself important?
A little bit sometimes. More I like talking about it and sharing about this new space with others.
It's almost a cliche at this point to call BTC as "Gold 2.0". You do that yourself in one of your answers. But isn't the point of Gold that it's a metal and we can never get newer, better Gold. What if somebody creates a new crypto that's better than BTC in every way and people start moving to it? Wouldn't BTC lose all its value?
Many have tried. Bitcoin has a lot going for it in that the creator is anonymous and a hash rate of ~175 trillion hashes per second. Litecoin for example has a faster confirmation time. Other coins like Monero are ASIC-resistant using memory-dependant Scrypt algorithms. Bitcoin for whatever reason has staying power. It's a very real possibility something takes on bitcoins crown for #1 market cap, but right now it's dominant. As for the Gold analogy, I respect that, but also wouldn't it be possible for other metals to gain value? Granted the biblical references and history of gold give it prominence as well, that's not to say another metal couldn't be coveted one day. I realize this is a stretch, but it's another "what if?"
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Do you think we would be able to adopt crypto/btc in this century? I don’t think so, but I’m still hopeful 🤞🏼
It's already adopted. Mass Mutual this week bought $100m in bitcoin and there's a lot of significant institutional development in the space. Bitcoin won't be the currency of choice for buying a casual coffee or Uber eats. There's better crypto for that. It's tacky, but bitcoin is becoming somewhat of a gold 2.0. It improves upon it in several fundamental ways. Recently JPMorgan said an allocation of just 1% of pension and insurance funds means an additional $600b of funds moving into cryptocurrency. So, it's adopted and many are betting it will evolve over the century of course, but as far as charging your tesla in bitcoin it just doesn't make sense. There will be better crypto for that.