RE: Why Bitcoin Could Reach $23,000 Soon
Hi CI,
Another insightful video! It got me thinking about BTC and the markets in general. Not sure where or when the term "altcoins" got coined (lol) but it seems like a natural and reasonable description of the landscape. I wonder if it was just a analytical construct that we use out of convenience or is it a tacit subconscious admission that BTC is, indeed, the bedrock of this whole experience.
Its like a childhood game of tag and BTC is the "safe" base we can all run to when Mr Market comes to nab us. We know this in our minds but act in a manner which suggests we trust it on a deeper level than mere intellectual cognition.
Other BTC attack surfaces I have been thinking about:
Altcoins - friendly competitors in the arena. Solution: buy high quality altcoins with staying power (ie diversify)
BCash - I consider BCH a special case scenario in that its explicit aim is to destroy and replace BTC. Solution: consider the entire value of bitcoin to be BTC and ALL its forks. Own them all; don't sell off forks if you can help it. Respect the entire family and sleep better at night knowing you capture all of the action no matter which project moves forward with whatever crazy price action occurs. Suddenly, Roger Ver and Jihan Wu become your b!@#$es and work for you.
Insecure exchanges - solution: get a hardware wallet or make paper wallets and take responsibility for your newfound wealth. To paraphrase Trace Mayer, "If you have newly acquired $1 million dollars of wealth, then you should put in $1 million dollars worth of thought into securing it."
Centralization of mining - I am not well versed in this area other than knowing BTC's mining network is the most decentralized one in existence. Not sure if its trending toward more or less centralization. The CryptoAsset book you recommended mentioned the Herfindahl-Hirschman Index which can estimate the degree of monopolization of a market. At the time of their writing, BTC mining network was considered fairly decentralized. Here's a more updated and very technical evaluation which tries to quantify the issue so it can be improved:
https://news.earn.com/quantifying-decentralization-e39db233c28e
Question for you: Is it useful to think of this market in terms of sectors and construct a portfolio based on the best players in each sector? I am speaking as someone that wants to hold anything I buy for at least 1yr to avoid short term capital gains.
Thanks again, CI. See you Monday!
Honestly I didn't use to think that it was a smart idea to separate the field into sectors because correlations used to be a lot higher, but now I think it's not the worst idea:
So on, so forth. It does seem that they pump in groups now far more often than they did before so may not be worst idea in world to diversify into groups as opposed to past where I'd say just pick whatever altcoins you like best even if that makes you concentrated in only 1 or 2 "sectors."
Can you create a video about scalability? Bitcoin and Ethereum has scalability issues and many altcoins in the market are fixing this scalability issue. You said in a past video that it's not an important factor. I seen someone transfer $50 Bitcoin and got a $20 fee. Gaming company Steam has removed Bitcoin as a payment option because of the transaction fees. This scalability issue is real.
Well is clear that scalability issues are a big obstacle for cryptos as currency
But for cryptos as investment it is not a big problem,
Collecting from the last 10 videos from him i assume his position is as cryptos are not a currency TODAY and are being used as investment, it doesent matter and IF they become currencies the tech of the most relevant coins will evolve to do the necesary things ( in other words the market will regulate itself)