I talk to these people all the time. Them: "I KMOW stock XXX is going to be at price YYY in time Z." Me: "How much have you invested in stock XXX?" Them: "Oh nothing yet".
There's tons of folks on hn betting their shorts on bitcoin and way more exotic things, just that hopefully we can all afford to lose our, uh "investments" ;)
99% of Bitcoins are being held by people expecting to sell it to someone else for more than they bought it for. That doesn't seem to be changing.
You just have to do a calculation involving the number of people on the planet to figure out when the supply of new suckers runs dry and the price crashes.
Doesn't that assume every person on the planet will own some BTC before it crashes? It also assumes the rate new people start buying BTC is constant, or even predictable.
Umm anyone who has studied distributed systems understands a fully distributed system cannot scale past a certain limited point. That's not controversial. That's just reality.
LN, for example, is adding degrees of centralization to achieve better scaling. Human systems have a tendency towards centralization and consolidation of power/authority as well, as we see in various ways already with Bitcoin (China, Ver, Core).
There's overwhelming evidence to believe that the future of Bitcoin is much more centralized, at which point it starts to resemble the systems we already have but with horrifying disadvantages: your entire transaction history is public to everyone, your identity can be linked to your wallet through exchanges, etc.
One example is that BTC's transactions costs are getting more expensive as time goes on. They were supposed to start going down after the most recent hard fork, but I don't know if has been the case.
Another example is that the electricity cost to run the system is going up at an unsustainable pace. Eventually they'll have to switch to an new way to propagate the blockchain something other than Proof of Work mining.
Most likely though, these problems will be solved with some kind of hard fork rather than BTC dying.
I think invest is the wrong term. Investments have some kind of builtin return like interest or dividends. You're buying bitcoin in the same way you buy gold or a lottery ticket. Maybe you have some solid reasoning on why price will go up but you aren't getting any returns like in an investment.
Boiled down to the base principles it's the same... money goes in, more money might come out, or you might get less money out. The only difference is predictability and odds.
The entire profit motive from Bitcoin "investing" comes from selling it to another human for more than you bought it for. They're digital Beanie Babies.
Real investments have a return derived from capital. A house, for example, can be rented out for money. Or a business can earn profit and distribute it to its shareholders. You can try to buy and sell houses like people did during the RE bubble for profit, or try to buy and sell stocks like a day trader, but these are still fundamentally different from an "asset" which has no means by which to generate a return on its own.
> You can buy goods and services with Bitcoin. It's just another currency.
Not really though. You can buy a few novelties online and there are a handful of places that accept bitcoin, but realistically it is not "just another currency", it's an IOU for usable money.
> investments have some kind of builtin return like interest or dividends
I'd say, more so, the distinguishing factor between an investment and speculation is that an investment is used to facilitate a business process that could potentially create wealth whereas speculation is a bet that something of value will be worth more at a later date.
Although, you can buy ETFs that aim to track cryptocurrencies by buying a basket of them, looking at payment processors, etc.
It's like, I think that lithium is gonna be short in the near future. It's really useful stuff. But I'm not buying kilograms of raw lithium to hoard in my garage, I'm investing in the companies that oversee the element's mining, processing, surveying, etc. And maybe looking at commodity options in the short term, but given what happened there with aluminum...
No, but you may still make some money from it before it drops to zero.
Just don't consider it an investment, and don't put anything into it that you'll miss. Investments are tied to real world value, returns and having a say, bitcoins have no real world application or substance outside of financial crime.
Your product simply isn't valuable if the world wouldn't miss it if it disappeared over night. Outside of keeping money away from legislation what value does crypto currencies have that would be missed?
Try transferring $1 million (or hell, even simply more than $10K) of legitimate cash to another country. With USD you have to jump through hoops. With BTC, it's less than an hour to clear and the transaction fee is peanuts. BTC has properties of physical cash and credit/debit cards. That's valuable.
Are you saying that you think Gorman has actually invested in Bitcoin, but he lied because he didn't want to make it seem like he was touting his book?
I think people at his level trade on traditional assets (stocks, metals, whatever) but always with an insider's edge. He probably does not have that edge in Bitcoin.
Good thing that all these Wall Street CEOs share these nuggets of wisdom with us uncouth plebeians. Their charity is out of this world! Now I just need to know what Jim Kramer thinks of this and I'm good.
Like it or not, major figures in the financial industry saying “this is legit” helps bitcoin’s image which has knock-on effects. Bitcoin still struggles from the “its only used to buy drugs” stigma even with some on here.
But you'll always have some figures that people look up to for advice, right? They won't change value but they will get people to speculate. Like it or not, most people buying and holding Bitcoin are speculating at this point in time.
...and replacing them with cryptocurrency CEOs and HN and Reddit commenters whose economic experience is limited to googling the word “fiat” and talking points on free markets? Is that what you mean?
Occasionally people are listened to because they have something to offer, like, say, running one of the world’s largest investment banks. His remarks immediately made Bloomberg, CNBC, and so on, which is just free PR. From the head of Morgan Stanley. Who in the current world, and not the glorious future one you want, commands respect and attention. Talk about biting the hand throwing your passion a bone.
And what’s your plan to make Gorman and other investment banks irrelevant with cryptocurrency? You’re talking about something like, what? A third of the world economy? I made that number up, but it’s probably even more. Nobody will have financial planning services and investments in your cryptographic future? End capitalism? How should I explain what you want to the soybean farmer next door who needs an ag loan from one of those very banks to buffer crop loss from an imported Asian pest? The free market will figure it out, and the entire system of capital allocation we all know is fundamentally broken and useless? If only he mined Litecoin?
The single biggest thing holding crypto back is tone deaf arrogance like this from its biggest proponents. Slow down, buddy, you’ve successfully monetized files of bits. Completely disrupting the entire world economy and making banks irrelevant is a wee bit far fetched and even if it isn’t, should be approached with a little more caution than a lot of crypto folks give it. You’re talking about the (imperfect) global system that feeds billions of people and keeps them alive. Show it some respect; only hundreds of thousands of people, nigh, millions, worked on it before the engineers with vim showed up and declared they know better.
Cryptocurrency is good. Let’s be reasonable when discussing it.
Bitcoin might not reach its full potential for another 500 years, for all we know. This generation of pundits' opinions matters just as much as the next.
Shh, half the fun of cryptocurrency threads is watching its proponents re-learn every single harsh lesson banking and financial industries have learned over the past couple hundred years! It turns out a lot of regulations and whatnot involved with Fiat™ don't just exist for arbitrary reasons.
Oh, absolutely they are. This is not to be construed as any sort of ringing endorsement of the banking system - I just don't think that rebuilding digital Beanie Babies from first principles and wasted electricity is a good solution to the problem.
And surely, nobody in the basically unregulated cryptocurrency world has ever done that, right? Bad actors are bad actors, and it’s disingenuous to point at some and ignore others.
One of the largest cryptobank (exchange) is ran by someone who openly praised one of the major ponzi scams, even after it shut down and was known to be a scam. [1]
Said cryptobank is now allegedly using fake orders to buy up significant amounts of BTC (recently a 50,000 BTC order [2]) during market crashes.
Sure but it's also naive to think that exchanges, the bitcoin central bank of tethers, blockstream, market manipulators, dev teams with premined supplies, and early adopters who spent $100 to own 26% of total supply aren't trying to fuck you over.
No, no, no, you misunderstand. That’s the free market regulating itself! Working as intended. Big difference from what those evil banks are doing in a regulated, capitalist economy which incentivizes them to do exactly what they’re doing in order to prop up a global economic system that enables many people to buy computers, become engineers, and build cryptocurrencies instead of jogging through the savannah with a spear looking for dinner. Cryptocurrency is pure.
Remember, it’s not money laundering, it’s tumbling. Big difference. It’s not wealth inequality, it’s early adoption. Big, big difference. Entirely different concepts.
Which is why we created a system with enormous first mover advantage such that the people who joined first see 1000x or more returns on their investment, ensuring that the distribution of BTC is wildly unequal and why people who simply own BTC have literally zero say in its operation?
The thing is that once upon a time, (I wanna say mid 2000s), there was a large segment of population (e.g. retired people with money) who though Kramer was impartial and who invested based on his advice.
I don't think that's changed honestly. I know there's a disclaimer at the beginning to not use anything he says as stock advice but why else would you watch the show? I guess the big buttons are kinda cool.
He's a clown, but he is a relatively self aware clown.
Someone gave me one of his books, the first part of the first chapter explains that "Mad Money" is money you can put aside after buying things like disability insurance and making sensible retirement investments (and having an emergency fund, and so on).
> "The concept of anonymous currency is a very interesting concept -- interesting for the privacy protections it gives people, interesting because what it says to the central banking system about controlling that."
I don't think he means bitcoin in particular, it could be any crypto currency. Bitcoin is still a ponzi scheme in bubble phase.
Most of its value is speculative and if you buy you have to hope there's a bigger sucker somewhere in the future in order to get your payout, that's not exactly Ponzi-shaped, but I can definitely see why people might consider it a decentralized form of the pattern.
According to your interpretation, wouldn't gold also qualify as a decentralized ponzi scheme? You're just hoping some bigger sucker buys your over inflated metal right?
People actually use gold, as it's optimal (or solely suited) for a number of electric and chemical tasks.
Also, it's pretty and used as a status symbol.
It has utility, which has been overblown in the market for a long time (like diamonds).
It's not my interpretation (I like to be more precise with terminology), just one that I could explain. I suppose that people who feel that way about bitcoin probably feel that way about any commodities that are held at speculative value above any value based on their utility, but I don't think they would describe those as being "ponzi schemes" -- not sure how they would make the distinction.
If you think 90%+ of its current value isn't driven by behaviorial psychology rather than fundamentals, you either haven't been paying attention or don't understand markets.
A lot of things ‘provide real value’. What matters is the magnitude of said value. And before you can get there, you need a way to quantify it. I would posit that Bitcoin creates a lot less real (and particularly marginal real) value than perceived value.
It doesn't matter, it provides value. This is enough to make it not a scam, it's not like a bunch of people got together and asked how to make themselves rich. Bitcoin was created to be the trusted currency of the internet, without the banks interfering.
Stocks have underlying value even if they could no longer be traded, in other words, non-zero use value, in the form of dividends. What is bitcoin's use value? It doesn't even have commodity applications like gold.
Beyond all this noise that is patticularly annoying in this space, I really like articles trying, at least, to provide more fundamental analysis. Last week Chris Burniske provided an article about cryptoasset valuation: https://medium.com/@cburniske/cryptoasset-valuations-ac83479...
What is the most legit and safe method for creating a wallet and just buying a bit of Bitcoin? I wouldn't mind being able to drop a couple hundred on it and seeing where it goes, but it's hard to trust websites/subreddits that look like posts were written by nerdy 15 year olds.
Some only use exchanges like Coinbase to transfer money into and out of your wallet. Leaving your coins on Coinbase is considered risky since it could be hacked and your coins stolen.
They are one of the few reputable companies in the space. They follow all the laws, have a great looking site, have an exchange called GDAX under the same system if you want to try trading at some point, and they are pretty secure. Not to mention that any USD in your account is FDIC insured, and any Bitcoin is insured privately in case of a breach of their systems.
You will need to provide your id and it may take a week or more to get verified, and the fees are higher than alternatives, but honestly it's not that big of a deal, and it just reaffirms that they are trying to build a sustainable business and aren't going to close up shop tomorrow.
Just want to point out, the fees are significantly less if you use GDAX to purchase bitcoins. You can move bitcoins from gdax to coinbase wallet or to your own personal wallet.
In coinbase there is a flat fee, in GDAX you only pay fees if you put a bid in, and there is no existing sell order on the books that would fill you bid. The reverse is also in effect, if you put a sell order in, and no existing buy orders meet your order, there is no fee when the transaction takes place.
GDAX is an exchange. Make sure you are comfortable with using an exchange. I'd recommend you always use a limit order if you are just starting out.
Yes, but it is much more intimidating working in GDAX. Not to mention that you need to find your account with USD before you can buy anything.
In coinbase you can make a purchase instantly and lock in at a specific price that instant (even if the transfer takes a week to really go through).
In my one case, I bought some at $2700, it took a week to post and actually give me my Bitcoin, but I got it at $2700 even when the price was at $3000 by then (the gains far outweighing the fee of a few percent). But in GDAX I need to fund my USD account which took a week before I can buy.
Yes the fees are less, but if you are looking for simple, spending $5-10 in fees won't hurt for a much easier and more straightforward experience. But GDAX is also fantastic if you are comfortable with it.
I didn't expect people asking how to buy Bitcoins on HN.
Just get an account on Kraken, Coinbase, Gemini or wherever and look that you don't keep your coins on the exchange for too long. Start with small amounts. And those nerdy forums and subs (I think you mean Bitcointalk and Ethtrader on Reddit) are actually good places to get started/informed.
Pro-tip: I had an absolutely terrible experience with Coinbase. And a far better one with GEMINI (Although I have issues that are +30 days old still open with their customer support. I'm pretty disappointed).
2. Get your account verified (KYC)
Pro-tip: If you are concerned about your privacy, you can always buy bitcoin for cash on localbitcoins. They have an escrow system.
3. Purchase cryptocurrency of your choosing.
Pro-tip: look at historical charts (both Linear/Log scales) and do your best to "time" your order, of course it is hard.
4. Move back funds to your hardware wallet.
Pro-tip: Whatever HW wallet you choose, do not leave your funds on the exchange. Just don't do it, accounts get hacked all the time (even with 2FA), exchanges get hacked all the time, remember MtGox and learn from others' mistakes.
Absolutely do not do this unless you are buying a very small amount of coins as an exploratory thing into bitcoin, and won't worry about losing them if you mess up your opsec.
I think you would make a stronger case if you actually provided any arguments. There's literally nothing complicated about using a hardware wallet. It is a well documented, well thought out procedure that shields people from 99% of the reasons people lose their money (lost keys, theft, exchange bankruptcy, hack etc.).
I'm really curious to hear what's the rationale behind your post. Please elaborate.
Coinbase is the only answer here, and it makes me frustrated to still see the "buy a hardware wallet" recommendations.
I recently had my hardware wallet (a trezor, which is the nicest one) fail during a firmware update. Now, obviously I have a backup of my seed, but for those few minutes that backup became a VERY expensive little widget.
When I travel, I have to worry about where my backups are stored. Storing them in a bank vault means I have to worry about the bank vault.
If I have a hardware wallet, I'm essentially betting that I am better at opsec than coinbase, a >$1billion company who devotes a non-trivial amount of resources to opsec. Keeping my own wallet means I am arrogant enough to believe that I can out-opsec the team of security people they have there.
That's absurd.
There ARE reasons for a hardware wallet (which is why I have one). The bCash split recently is why I have mine.
Keeping your own wallet and "being your own bank" is a really fun cyberpunk fantasy, but there are plenty of practical reasons to use banks.
If you are asking the question about how to buy bitcoins in 2017, then the answer is unquestionably that you should both buy and store you coins on coinbase.
Yeah, it's ridiculous how many people push the "you don't own your coins unless..." philosophy.
Do we really want users to have to understand DevOps six-nines infrastructure reliability, disaster recovery, and stay ahead of the infosec curve in order to hold cash? Not only is the unacceptable for mainstream consumers, i'd argue it's unacceptable for all but the 1% most savvy enthusiast power-users.
>If I have a hardware wallet, I'm essentially betting that I am better at opsec than coinbase, a >$1billion company who devotes a non-trivial amount of resources to opsec.
I'm sure people who were using Mt Gox felt the same way.
Part of the equation is you're betting you place your own interests at a higher priority than the people who run Coinbase. Which is almost certainly true.
> then the answer is unquestionably that you should both buy and store you coins on coinbase.
That is such terribly bad advice that I cannot ignore your post. Storing any amount of coins on an exchange is a liability that is far more considerable than keeping your funds on an encrypted USB-key sized device that you can keep at your home, or at the bank, or anywhere you think it will be reasonably safe. It has fail-recovery procedures built-in so that even in the event of a hypothetical hardware failure, you can recover your funds. If you're even a tiny bit technical it won't be a problem at all.
Your argument boils down to your one single bad experience with a hardware wallet that you dub the "nicest one" despite popular knowledge and maybe because of its price alone. And that's despite being able to recover your funds safely as advertised. And the rest of your post is split between audacious comparisons between banks and exchanges that I won't bother to address; and appeals to authority ("exchanges know better!") that has been debunked over and over again in very recent history. I don't ask you to believe me, for every high-profile case you hear of MtGox, Bitfinex, BTC-e etc. there are many more smaller exchanges that (just like the big ones) sink with their customers' funds.
I hope Bitcoin is more than just a fad because it would provide a really convenient way of harnessing solar energy in space without having to beam it all back to Earth. But this can only happen if Moore's Law slows way down (which is happening) and if mining ASICs hit an efficiency plateau lasting for years (is this happening?).
Currently, it costs about 9MWh per BTC, or about $1000 in electricity per bitcoin to mine on a pretty efficient S9 antminer. S9s currently go for about $2/Watt and require about 100 J/TH and weigh, I don't know, maybe 1kg per kilowatt (or 1000W/kg).
Solar modules are about 30 cents per watt on the spot market, produce about 100W/kg (if weight optimized, i.e. not such a thick aluminum frame). Since all the heat must be dumped into space at the ASIC's operating temperature, radiators are about 100W/kg and probably cost as much as solar modules ($0.30/W) if mass produced.
So 1000W of mining capacity would weigh 21 kg and cost $2000+$300+$300= $2600. To launch 21kg at $100/kg to GSO (this is an incredibly low cost, but could be achieved with SpaceX's or Blue Origin's long-term ITS/BFR or New Armstrong rockets) would cost about $2100. So a total of about $4.7/W.
Assuming the lifetime of that whole thing is about 12 years (a reasonable time for a risk-free doubling of an investment), that's about 12 BTC, or about $47,000 at today's prices, or a factor of 10 return.
(Today's BTC returns ~40 cents per kWh invested, this scheme would break-even at about 4 cents per kWh generated.)
...but:
1) There's a whole bunch of glue, like a network link and spacecraft subsystems that must be included as well as spacecraft processing.
2) Moore's Law in the strict sense is over, but progress still continues.
3) ASIC improvement is possible.
4) We don't have Musk's or Bezos' huge reusable rockets quite yet.
5) If return was this well-proven, you'd likely have a bunch of competition from even cheaper sources of energy.
6) I still think Bitcoin is far too volatile and speculative to justify this kind of investment. Given the reduction in mining rate, if you knew Bitcoin would be able to justify this kind of investment over decades, then you'd probably be better off just buying a bunch of BTC right now and holding it.
But maybe the future of cryptocurrency will eventually enable a less volatile and more proven return, making stuff like this worth investing in. I hope so.
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[ 3.2 ms ] story [ 179 ms ] threadNow this is what I come to HN in the morning for.
Options and derivatives are risky. A merely volatile asset that never expires is pretty conservative in comparison.
Many other coins have gone up 2x, 5x, even 10x in the last weeks/months.
Bitcoin going from 4K to 20K in 4 years (ie 5x) is relatively tame.
Why like 20k (as opposed to like 100k or like 1k)?
You just have to do a calculation involving the number of people on the planet to figure out when the supply of new suckers runs dry and the price crashes.
I'm bullish on crypto but McAfee is... well something else.
Bitcoin's network is not scaling well.
LN, for example, is adding degrees of centralization to achieve better scaling. Human systems have a tendency towards centralization and consolidation of power/authority as well, as we see in various ways already with Bitcoin (China, Ver, Core).
There's overwhelming evidence to believe that the future of Bitcoin is much more centralized, at which point it starts to resemble the systems we already have but with horrifying disadvantages: your entire transaction history is public to everyone, your identity can be linked to your wallet through exchanges, etc.
Another example is that the electricity cost to run the system is going up at an unsustainable pace. Eventually they'll have to switch to an new way to propagate the blockchain something other than Proof of Work mining.
Most likely though, these problems will be solved with some kind of hard fork rather than BTC dying.
Real investments have a return derived from capital. A house, for example, can be rented out for money. Or a business can earn profit and distribute it to its shareholders. You can try to buy and sell houses like people did during the RE bubble for profit, or try to buy and sell stocks like a day trader, but these are still fundamentally different from an "asset" which has no means by which to generate a return on its own.
You can buy goods and services with Bitcoin. It's just another currency. Do people claim that forex is not investing?
Not really though. You can buy a few novelties online and there are a handful of places that accept bitcoin, but realistically it is not "just another currency", it's an IOU for usable money.
Yes, all the time. It's clearly speculation (in the technical sense)
I'd say, more so, the distinguishing factor between an investment and speculation is that an investment is used to facilitate a business process that could potentially create wealth whereas speculation is a bet that something of value will be worth more at a later date.
It's like, I think that lithium is gonna be short in the near future. It's really useful stuff. But I'm not buying kilograms of raw lithium to hoard in my garage, I'm investing in the companies that oversee the element's mining, processing, surveying, etc. And maybe looking at commodity options in the short term, but given what happened there with aluminum...
Crypto can play a similar role.
Just don't consider it an investment, and don't put anything into it that you'll miss. Investments are tied to real world value, returns and having a say, bitcoins have no real world application or substance outside of financial crime.
https://www.coindesk.com/information/what-can-you-buy-with-b...
Occasionally people are listened to because they have something to offer, like, say, running one of the world’s largest investment banks. His remarks immediately made Bloomberg, CNBC, and so on, which is just free PR. From the head of Morgan Stanley. Who in the current world, and not the glorious future one you want, commands respect and attention. Talk about biting the hand throwing your passion a bone.
And what’s your plan to make Gorman and other investment banks irrelevant with cryptocurrency? You’re talking about something like, what? A third of the world economy? I made that number up, but it’s probably even more. Nobody will have financial planning services and investments in your cryptographic future? End capitalism? How should I explain what you want to the soybean farmer next door who needs an ag loan from one of those very banks to buffer crop loss from an imported Asian pest? The free market will figure it out, and the entire system of capital allocation we all know is fundamentally broken and useless? If only he mined Litecoin?
The single biggest thing holding crypto back is tone deaf arrogance like this from its biggest proponents. Slow down, buddy, you’ve successfully monetized files of bits. Completely disrupting the entire world economy and making banks irrelevant is a wee bit far fetched and even if it isn’t, should be approached with a little more caution than a lot of crypto folks give it. You’re talking about the (imperfect) global system that feeds billions of people and keeps them alive. Show it some respect; only hundreds of thousands of people, nigh, millions, worked on it before the engineers with vim showed up and declared they know better.
Cryptocurrency is good. Let’s be reasonable when discussing it.
Said cryptobank is now allegedly using fake orders to buy up significant amounts of BTC (recently a 50,000 BTC order [2]) during market crashes.
[1] https://www.reddit.com/r/btc/comments/6xpddt/as_20m_more_tet...
[2] https://twitter.com/Bitfinexed/status/908718464671641602
Remember, it’s not money laundering, it’s tumbling. Big difference. It’s not wealth inequality, it’s early adoption. Big, big difference. Entirely different concepts.
I was basically financially illiterate until I had someone who could YELL the information at me. THANK YOU JIM KRAMER!
Someone gave me one of his books, the first part of the first chapter explains that "Mad Money" is money you can put aside after buying things like disability insurance and making sensible retirement investments (and having an emergency fund, and so on).
* Price goes down
* Buy
* Say it's not a fad
* Price goes up
* Sell
* ...
* Profit?
But the Profit cycle is fully complete here.
I don't think he means bitcoin in particular, it could be any crypto currency. Bitcoin is still a ponzi scheme in bubble phase.
Who's behind the sceme? And if you say Satoshi, you should think about what stocks are.
1000 years ago it was cotton instead of gold
I wouldn't know where it doesn't belong ;)
What is the most legit and safe method for creating a wallet and just buying a bit of Bitcoin? I wouldn't mind being able to drop a couple hundred on it and seeing where it goes, but it's hard to trust websites/subreddits that look like posts were written by nerdy 15 year olds.
Using physical digital wallets is more secure, but they can be lost or damaged it so it's choice you have to make. Here's the best one that I've seen (no affiliation): https://www.buybitcoinworldwide.com/wallets/ledger-nano-s/
They are one of the few reputable companies in the space. They follow all the laws, have a great looking site, have an exchange called GDAX under the same system if you want to try trading at some point, and they are pretty secure. Not to mention that any USD in your account is FDIC insured, and any Bitcoin is insured privately in case of a breach of their systems.
You will need to provide your id and it may take a week or more to get verified, and the fees are higher than alternatives, but honestly it's not that big of a deal, and it just reaffirms that they are trying to build a sustainable business and aren't going to close up shop tomorrow.
In coinbase there is a flat fee, in GDAX you only pay fees if you put a bid in, and there is no existing sell order on the books that would fill you bid. The reverse is also in effect, if you put a sell order in, and no existing buy orders meet your order, there is no fee when the transaction takes place.
GDAX is an exchange. Make sure you are comfortable with using an exchange. I'd recommend you always use a limit order if you are just starting out.
In coinbase you can make a purchase instantly and lock in at a specific price that instant (even if the transfer takes a week to really go through).
In my one case, I bought some at $2700, it took a week to post and actually give me my Bitcoin, but I got it at $2700 even when the price was at $3000 by then (the gains far outweighing the fee of a few percent). But in GDAX I need to fund my USD account which took a week before I can buy.
Yes the fees are less, but if you are looking for simple, spending $5-10 in fees won't hurt for a much easier and more straightforward experience. But GDAX is also fantastic if you are comfortable with it.
This isn't entirely true, most of their coin is stored cold and uninsured. They only have insurance on their hot coins. https://support.coinbase.com/customer/portal/articles/166237...
(I don't intend this as a knock, I too recommend them.)
Coinbase has zero customer support.
Edit: Apparently they have a call center now, but my previous experience with the company has left me with no desire to go back to them.
Just get an account on Kraken, Coinbase, Gemini or wherever and look that you don't keep your coins on the exchange for too long. Start with small amounts. And those nerdy forums and subs (I think you mean Bitcointalk and Ethtrader on Reddit) are actually good places to get started/informed.
There's always something people haven't learned. I would have had the same question, were I even remotely interested in getting into the Bitcoin fun.
Pro-tip: Go for a Ledger Nano S (https://www.ledgerwallet.com/products/12-ledger-nano-s), it is (IMO) the best hardware wallet available. Had a terrific experience using it, it is a genuinely great product.
1. Pick a high-profile exchange
Pro-tip: I had an absolutely terrible experience with Coinbase. And a far better one with GEMINI (Although I have issues that are +30 days old still open with their customer support. I'm pretty disappointed).
2. Get your account verified (KYC)
Pro-tip: If you are concerned about your privacy, you can always buy bitcoin for cash on localbitcoins. They have an escrow system.
3. Purchase cryptocurrency of your choosing.
Pro-tip: look at historical charts (both Linear/Log scales) and do your best to "time" your order, of course it is hard.
4. Move back funds to your hardware wallet.
Pro-tip: Whatever HW wallet you choose, do not leave your funds on the exchange. Just don't do it, accounts get hacked all the time (even with 2FA), exchanges get hacked all the time, remember MtGox and learn from others' mistakes.
I'm really curious to hear what's the rationale behind your post. Please elaborate.
I recently had my hardware wallet (a trezor, which is the nicest one) fail during a firmware update. Now, obviously I have a backup of my seed, but for those few minutes that backup became a VERY expensive little widget.
When I travel, I have to worry about where my backups are stored. Storing them in a bank vault means I have to worry about the bank vault.
If I have a hardware wallet, I'm essentially betting that I am better at opsec than coinbase, a >$1billion company who devotes a non-trivial amount of resources to opsec. Keeping my own wallet means I am arrogant enough to believe that I can out-opsec the team of security people they have there.
That's absurd.
There ARE reasons for a hardware wallet (which is why I have one). The bCash split recently is why I have mine.
Keeping your own wallet and "being your own bank" is a really fun cyberpunk fantasy, but there are plenty of practical reasons to use banks.
If you are asking the question about how to buy bitcoins in 2017, then the answer is unquestionably that you should both buy and store you coins on coinbase.
Do we really want users to have to understand DevOps six-nines infrastructure reliability, disaster recovery, and stay ahead of the infosec curve in order to hold cash? Not only is the unacceptable for mainstream consumers, i'd argue it's unacceptable for all but the 1% most savvy enthusiast power-users.
I'm sure people who were using Mt Gox felt the same way. Part of the equation is you're betting you place your own interests at a higher priority than the people who run Coinbase. Which is almost certainly true.
https://support.coinbase.com/customer/en/portal/topics/79436...
That is such terribly bad advice that I cannot ignore your post. Storing any amount of coins on an exchange is a liability that is far more considerable than keeping your funds on an encrypted USB-key sized device that you can keep at your home, or at the bank, or anywhere you think it will be reasonably safe. It has fail-recovery procedures built-in so that even in the event of a hypothetical hardware failure, you can recover your funds. If you're even a tiny bit technical it won't be a problem at all.
Your argument boils down to your one single bad experience with a hardware wallet that you dub the "nicest one" despite popular knowledge and maybe because of its price alone. And that's despite being able to recover your funds safely as advertised. And the rest of your post is split between audacious comparisons between banks and exchanges that I won't bother to address; and appeals to authority ("exchanges know better!") that has been debunked over and over again in very recent history. I don't ask you to believe me, for every high-profile case you hear of MtGox, Bitfinex, BTC-e etc. there are many more smaller exchanges that (just like the big ones) sink with their customers' funds.
Currently, it costs about 9MWh per BTC, or about $1000 in electricity per bitcoin to mine on a pretty efficient S9 antminer. S9s currently go for about $2/Watt and require about 100 J/TH and weigh, I don't know, maybe 1kg per kilowatt (or 1000W/kg).
Solar modules are about 30 cents per watt on the spot market, produce about 100W/kg (if weight optimized, i.e. not such a thick aluminum frame). Since all the heat must be dumped into space at the ASIC's operating temperature, radiators are about 100W/kg and probably cost as much as solar modules ($0.30/W) if mass produced.
So 1000W of mining capacity would weigh 21 kg and cost $2000+$300+$300= $2600. To launch 21kg at $100/kg to GSO (this is an incredibly low cost, but could be achieved with SpaceX's or Blue Origin's long-term ITS/BFR or New Armstrong rockets) would cost about $2100. So a total of about $4.7/W.
Assuming the lifetime of that whole thing is about 12 years (a reasonable time for a risk-free doubling of an investment), that's about 12 BTC, or about $47,000 at today's prices, or a factor of 10 return.
(Today's BTC returns ~40 cents per kWh invested, this scheme would break-even at about 4 cents per kWh generated.)
...but: 1) There's a whole bunch of glue, like a network link and spacecraft subsystems that must be included as well as spacecraft processing.
2) Moore's Law in the strict sense is over, but progress still continues.
3) ASIC improvement is possible.
4) We don't have Musk's or Bezos' huge reusable rockets quite yet.
5) If return was this well-proven, you'd likely have a bunch of competition from even cheaper sources of energy.
6) I still think Bitcoin is far too volatile and speculative to justify this kind of investment. Given the reduction in mining rate, if you knew Bitcoin would be able to justify this kind of investment over decades, then you'd probably be better off just buying a bunch of BTC right now and holding it.
But maybe the future of cryptocurrency will eventually enable a less volatile and more proven return, making stuff like this worth investing in. I hope so.