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The 3rd party custody has always been a risky thing for the holders of Bitcoin and it will remain as the riskiest thing for all those people who are still holding their Bitcoin in 3rd party custodial wallets. I'm more than sure that most of the investors who have invested in Bitcoin are keeping their coins on those custodial exchanges without even knowing the risks. If you check the Bitcoin holdings of the top exchanges then you will know that
most of those coins in real belong to the users not the exchanges.
Sure, the coins are supposed to belong to the clients, but many times laws and legal proceedings are not friendly in that directions, and then also the terms of service may or may not specify ownership or what the 3rd parties (the exchanges) can legally do with the coins.. and so there are a lot of injustices in the world - but and so the concrete principle of not your keys not your coins rings a lot of truth - even though surely people do not even trust themselves sometimes, and even some kinds of institutions (or even individuals sometimes in certain kinds of accounts that might be entitled to tax benefits) are not legally able to hold their own keys.. even though there are a lot of ways in which creative people are trying to figure out shared custodian arrangements - so it is not even always clear what might be the more feasible practices, because some people/institutions might not even realize the extent to which they are vulnerable to rug pulls (or somehow being locked out of their coins) until such rug pulling happens.
If they get the awareness that all of their coins are at risk of getting lost or stolen by those exchanges then they will never keep their coins in those custodial wallets.
That's not true... like I just mentioned, there are some institutions and individuals who might be required to keep their coins in some kind of a 3rd party arrangement, and also frequently if someone does not really know what they are doing in terms of holding their own coins, those people may well be better off holding their coins with 3rd parties. and so it seems difficult for the problems with 3rd parties to just go away, at least in the short to medium term.. which could even end up being generations of evolution and development of various self-custodial (or quasi-self-custodial) solutions, and in the mean time, more sophisticated players are going to take advantage, manipulate and even just work within these kinds of systems to their own advantage.. even if maybe some of those third parties might not be trying to do anything evil.
I agree that software wallets also have vulnerabilities and which can be penetrated by the hacker to steal the Bitcoin out of those wallets, but still they are safer than the custodian wallets because at least in those wallets you have your own control over the private keys.
That is still not true in all cases.
Sure there are benefits to having your own private keys, but if there is a known vulnerability (and even in recent times there has been quite a bit of discussion regarding the ways that the random generator system might have had been faulty and therefore unwittingly vulnerable)
Yes, most of the people will of course left their Bitcoin for their heirs as we all know that there are people in 80's holding Bitcoin and if they have heirs then they will most probably leave those Bitcoin for those heirs, and if the heirs don't know the proper use of those coins then they will misuse the hard-work of the one who has sacrificed most of his/her desires to keep those Bitcoin safe for their next generation.
So far, we are hearing a lot of examples coming from younger people rather than older people, but still examples of ways to screw up the passing of coins to heirs can come from all ages of people.
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You are right; that's the reason why some people cease to invest in Bitcoin and land themselves in a hot soup of shitcoins, but still end up regretting their decision when they can't get any profit. Some people usually have the mindset that Bitcoin is too expensive to buy a whole, but I still try to convince anyone I come across with such a mindset, telling them that they don't need to buy a whole of Bitcoin at once, nor do they need to save for many years before they can buy one Bitcoin at once. If one is still consistent in their accumulation, either weekly or even monthly, depending on how often they are getting the cash inflow, then they might still be able to accumulate a huge fraction of Bitcoin before they realise it.
Basically I don't mind someone's decision to diversify their assets instead of just bitcoin. Of course I don't want to elaborate on the potential benefits of diversifying them, but let's be honest that such an approach can never go completely wrong in your investment plan.
If you are referring to diversification for the mere sake of it (because you think that there is a benefit to that), then you are wrong. Things can go wrong.. because you dilute your investment and you lack focus.
Alternatively, if you are believe that diversification into shitcoins constitutes any kind of meaningful diversification, then you are wrong. Things can go wrong.. because again you are diluting your investment into nonsense.. including into a field that is already correlated to bitcoin.. so shitcoins move along with bitcoin, so if you diversify into them, you are merely adding more risk to an already risky investment area (namely bitcoin).. and the general idea of getting benefits from diversification comes from investing in differing categories of asset classes (hopefully not correlated), and traditionally those differing categories of asset classes would be equities (stocks), bonds (various kinds of debt instruments), properties, commodities and various kinds of cash exposure. Surely some of the recent problems with the various lack of non-correlation, even with the traditionally different categories, is that so many of them are corrupted by the various ways that the categories are tending to be overly leveraged by various ways that the dollar (and other fiat currencies) are propped up in ways that natural market dynamics are not allowed to take place.. and even shitcoins actually incorporate some of the various fiat corruptions in varying ways that are not necessarily consistent between them, but does not seem to be a justification to "diversify" into those varying kinds of smoke and mirror products for the mere sake of "being diversified".
Buy dip and hold is the best way for anyone looking to accumulate. A limited/small budget is not the main problem as long as they have the desire, it's just that a lot of people are greedy where they want to get rich quick without understanding how best to do it. You don't need to rush to own 1 bitcoin, but just do it consistently and get yours within your budget.
I cannot disagree with any of this.
Yeah your actually correct but from my observation similar to what Jay said, selling off your gold to Bitcoin is actually a wise decision but the security of your key phrases are are not guaranteed because loosing the key is equal as losing your money and even if you should entrust it to someone, what are the chances that he will not scam you and made away with your money
Ultimately I agree with you in terms of the questioning of the value of having allocations in gold, yet surely people are going to have varying positions in regards to gold in terms of if they already have some gold versus whether they might actively consider putting gold into their investment portfolio, so there can be some differences regarding whether to expose yourself to gold at all based on if you are already exposed and/or if you already have the knowledge base (and or infrastructure awareness) versus if you are brand new considering gold as something to add to your investment portfolio.
Either way, the end result should be little to no gold, yet I am not telling people what to do because they can do whatever they want, including dumb stuff, and in the end, they are responsible for their own allocation decisions, and surely they could go against everyone and end up being correct, or maybe they go with everyone, and they end up being incorrect. There are degrees to which we might figure out a system for ourselves or alternatively follow varying aspects of systems that other people point out.
but the safest way is to keep it at your only reach were no one has access to except you.
What happens if you get hit on the head, and you cannot remember anything? What about death? Are you going to have plans in place for those kinds of possibilities, and if you leave instructions, are those instructions clear enough and/or are those instructions vulnerable to someone finding them prior to your death and/or disability and using those instructions to remove you from your coins?
Even though I don't disagree with your overall point about difficulties in trusting others, but I have my doubts about whether there is any one safe way including that keeping most (if not everything) to yourself has its own potential downfalls - even if it may well be safe from certain kinds of attacks that involve anyone else, even your mom taking your coins from you... if you don't trust anyone, then what kind of world are you living in.. a "safe" one?
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It always depends on the type of investor you want to be and the level of risk you're comfortable with in your investment strategy. Bitcoin offers an opportunity for those with higher risk tolerance, while physical gold provides a long-term and secure investment option.
Fuck gold.
You really want to pump gold in this thread in regards to its supposed "long-term and secure investment option"?
One thing I am certain about is that Bitcoin poses a threat to gold due to its use of blockchain technology, which offers strong security for owners.
you sound like you have absorbed shitcoiner talking points from 2014-2016... or maybe you are listening to too many mainstream media pundits about bitcoin being valuable due to its "blockchain technology?"
What a bunch of gobble-dee-gook.
Unlike gold, which can be stolen if physically accessed, Bitcoin's digital nature provides protection. If enhanced security measures can be applied to various exchanges, then why would I keep my assets physically visible when I could store them digitally and keep them hidden?
This part of your post seems to be getting back on track.
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Wow!
Jay you have said it all, bitcoin has a higher use case compared to gold. Bitcoin can be used for payment, Investment, Store of value, Donations and Smart contract so why would I choose gold over bitcoin. Ha ha if money can't buy your love, maybe bitcoin will do.
I am not completely dismissing any use case for any other asset, but instead attempting to weighing the trade-offs in terms of valuations that seem more tied into comparing the various use cases, and surely there are still narrow use cases for gold and other assets, and surely bitcoin does not have physical properties which does cause gold (for example) to have some values that bitcoin does not have, but the mere fact that gold can be used for jewlery and industrial uses and even that it has been historically used for thousands of years does not cause it to be a better money than bitcoin, or even an equal money to bitcoin.. even though it could take a bit longer for gold to lose more and more of its monetary premium and a decent amount of gold's ongoing loss of monetary premium can likely be attributed to the existence of bitcoin, and various superior bitcoin features (at least superior in terms of bitcoin's monetary attributes).
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To the readers of the topic. In my humble opinion, diversification for plebs like us is a bad investment strategy. VERY bad in fact. Why? Because we don't have the same amount of capital as Warren Buffett to make it effective. If their $1 billion invested makes 20% in one year, that's $200,000,000. I believe that's more than enough especially if they outperformed the S&P 500 index.
Plus we don't need the hedge to reduce volatility because we are not asset managers who manage OTHER people's money. For us, we concentrate to one or two investments, if we want to truly make an amount of money that matters.
I mostly agree with you Wind_FURY - even though I have my doubts about whether you got this right since you are continuing to make this argument about "different rules applying to poor people".. which is not completely wrong, even though you tend to emphasize it so much that contributes to flaws in your emphasis of such.
In other words, there likely tends to be more value in diversification as your investment/savings portfolio grows, and at what point some diversification is good is going to have quite a few discretionary aspects that lead us back to figuring out which goals the investor is trying to achieve in terms of growth of wealth versus preservation of wealth balances.
Even if you might presume that everyone wants to get rich, there are some trade-offs that some people might be willing to make and others prefer not to make those kinds of trade-offs.
And surely there tends to be a decent amount of truth that concentration of investments are likely to contribute to greater potential for growth, yet again, some people are not willing to take those kinds of concentration of investment risks that likely end up in too much volatility, including that they might already know that they are going to need access to some of their wealth in various short term periods, and they cannot be taking the risk that their one or two investments happen to be down 60% to 85% at the time that they are considering tapping into it, so in that sense it may well be better to be able to draw from some assets that are more stable, even if they might not grow very well, but if you don't have any of those kinds of assets, then you are forced to have to spend from the asset that is 60% to 85% down.
So, there is some value in terms of when to start to diversify your savings/investment in bitcoin beyond bitcoin and cash and maybe into some other assets, and if you stick only with bitcoin and cash, then you can sometimes play around with those two and find enough comfort .. but I have my doubts.. .. even though there are people who maintain very concentrated approaches towards what they are investing/saving in... and for sure, they have the right to do that to themselves... even if such concentration of wealth may well not be good practices for the vast majority of normies.. even supposedly poor plebs like uie-pooie.
@Wind_FURY- and this could be BTC or any others assets like stocks or like property if you can afford it. I have bitcoin and stocks though, so I'm good with it. But if I will add diversification, and if my chance my bitcoin holdings will be enough for me to buy a good property than I can afford then I will do it. And then I will continue with my bitcoin strategy to collect again, at least in another 4 year cycle and then still maintain that property or even can make money out of it by renting it monthly, that will be perfect diversification for me.
There is nothing wrong with this idea - in the event that you are not actually overvaluing the property and the income that you might get from it.
If you prematurely get into the property and you bring your bitcoin holdings down to near zero or at zero just because you want that property and to have the income stream from the property, you may well have sold yourself short in terms of perhaps needing 10 years to make up for the amount of BTC that you ended up giving up in order to make that choice.
Sure, you may well speculate that the property is a "solid" investment in comparison to bitcoin, but you may well be deluded in your own brainwashing and inability to recognize/appreciate value.
An investment property (for cashflow) and a personal residence are going to have differing considerations, but even buying your own residence versus renting is not an "obvious" trade off in terms of either diversification, if that is what you are trying to achieve, or even having more stable value in terms of both balancing value growth and stability (referring to preserving principle).
So for example, if we go by your forum registration date, you have been saving for more than 10 years, and maybe you started to diversify into bitcoin around 8 years ago (at the time that you registered on forum), but maybe you did not invest into bitcoin very aggressively in the beginning and you made some mistakes,
so maybe you have around 4.45 BTC (around $130k worth of bitcoin) - like in this example of investing $20 per week for the past 8 years, and you are considering buying some kind of an investment property or even a residential property to live in with that value....
Let's say that in your area investment properties of the type that you want are around $250k to $500k, and it is not easy to get reasonable property loans in your area... based on your income or even property collateral..
So sure, you have options because you have already built a decent BTC portfolio, but how much are you going to take from it in order to invest in the property, and how much is that going to end up taking away from your BTC holdings.. and how easy might it be to get that BTC back, versus if you just continued to invest into Bitcoin for the next 5-10 years, and then see how much those 4.45 BTC are worth after another cycle or two, so maybe you might not even need a whole BTC in order to completely buy the investment properties, even if similar investment properties might end up going up to $500k to $1million in the next 5-10 years.
I think that part of my point is to consider the trade-offs, and my use of those numbers might not be very accurate or realistic, but it still shows that there can be pretty BIG opportunity costs for people who end up selling too many BTC too soon for the mere sake of believing that they have put themselves into a better financial position through their premature diversification - even if it might make them feel MOAR GOODER in the short-term.
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What is your take on investing in the physical sector like real estate? I know of my country where real estate is a huge business that gives massive return on investment. From the records available, the value of real estate here doubles every decade and it is reliable and transferable to heirs. This can be a good option to add to Bitcoin.
I understand Bitcoin do give more than double with a decade and this trend does not look it will change soon. The bottom-line of our discussion is how to generate sustainable wealth so, I a kind of still support other business venture like real estate that can also be good investment opportunities. Besides, there is joy and self fulfillment you get when you see your physical asset.
However, Bitcoin does not require so much technicality to venture into...the entire process of buying, storing and buying more can be learnt within a short period of time at one's convenient time and location. Unlike other ventures that requires so much processes like documentations, legal aspect and others; all of which have associated risks.
I think that my above example (responding to Yaunfitda) kind of addresses these ideas and even similar scenarios... and you seem to even point out that the cost of property ownership might not be getting you as much "returns" as you might superficially believe them to be capable of.. including 2x in 10 years, and even though I think that people might be exaggerating BTC returns as averaging 2x every year, but I still think that bitcoin is a way better investment than property in the coming 10 years.. and do what you like.. including that if you are going to live in the property, then you do have the saving of rent.. but you are still tied down in ways that you would not be with merely renting.. so sure there are some values that come with property ownership, but you likely need to question how much of your bitcoin (or your opportunity costs of having fewer bitcoin) is going to be worth it to buy property sooner than you should when maybe you could wait until your BTC stash is bigger.. and of course, you can choose what you like, even if it is not really the better of the choices merely because you are inclined to accumulate something physical. or maybe income producing or maybe ways to deduct expenses.. and none of those things are bad.. but still might end up being premature to jump in too soon, even if that's where your inclinations lie.
