Finally gave in….first crypto purchase today

[SecondAttempt]

If they require DL info, do they at least have a secure message service. Putting it in an email seems risky but I think I have provided DL # on various web forms for established, well known recipients.

I would point out that in most cases it is illegal to copy a DL, passport, or other government ID. So at least inquiring why they are asking you to do something illegal might be worthwhile. I think this is partly why US financial institutions have developed alternative idendity verification methods.

I'd also point out that I refinanced my mortgage about a year ago. My mortgage broker had to LOOK at my ID and fill out an affidavit that she had verified it but did NOT copy it, specifically telling me that it was illegal and it would taint the document review process.

 

[37andhappy]

Now I'm wondering...if I had a USB drive with keys to a bitcoin wallet with let's say 1/2 BTC, would I have had to report it? What if the keys were on my laptop in a way I was not aware of?

The keys are simply your access to the coins (and not the coins themselves, which are of course not in any case in a physical location, as they are on a globally decentralized blockchain).

Take your scenario one step further, lets say the keys are simply a number or phrase accessible in your head (accessible anywhere in the world). Creates a host of options for you if you ever want to leave a country rapidly and take wealth with you without it being seized. Gold coins are heavy, not to mention easy to confiscate...

 

[misanman]

I would point out that in most cases it is illegal to copy a DL, passport, or other government ID.

FWIW - I opened a new bank account with two of my kids a couple of weeks ago and the bank made photocopies of our driver's licenses.

 

[Sniggle]

I have successfully failed to buy into any of the 'to the moon' investments over the last 20 years. I thought Facebook was just a social/photo site, thought Amazon was just an online web store, and thought google was just a search engine. I, to this day, remain too skeptical of bitcoin to buy in.

...Maybe if it drops back to $30,000....but more than likely it will go to the moon.

(I can't complain about the returns on stock investing....but if I had just taken that $10,000 I paid for a hot tub and bought Tesla)

 

[captain3d]

When I had my taxes done this year my EA asked if I owned any crypto currency at any time during the year.

They asked because it IS an official question on the tax return

 

[captain3d]

I think most people are unaware of new KYC rules but you have to show ID for any new financial account. I had to provide DL copies for a mortgage refinance last year.

https://plaid.com/resources/banking/what-is-kyc/

“Customer Identification Program (CIP)
To comply with a Customer Identification Program, a financial institution asks the customer for identifying information. Every financial institution conducts its own CIP process based on its risk profile, so a customer may be asked for different information depending on the institution.

For an individual, this information could include:

A driver’s license

A passport”

 

[Lisa99]

Warren Buffett said something to the effect "I don't invest in what I don't understand."

I'm following his lead... no crypto investing for me.

 

[37andhappy]

Warren Buffett said something to the effect "I don't invest in what I don't understand."

I'm following his lead... no crypto investing for me.

This is in general a very wise approach to investing. Certainly a good way to comply with rule #1 (don't lose money).

What I would add to this though, is that we should always keep our minds open and continue to learn. So, if we don't understand something, this does not mean dismissing it as something we should consider. Rather it means making an attempt to understand investment opportunities of possible potential, and then once we are comfortable with our understanding, then making a decision as to whether to invest or not.

(This is indeed, in practice, the approach both Buffett, Munger and myself follow and apply).

 

[captain3d]

What is it that you are not understanding?

 

[37andhappy]

What is it that you are not understanding?

It's a good question. I think most people do understand the use case of perfect store of value, immediate accessibility, portability, divisibility and the removal of intermediary and counterparty risk. And they understand the huge role BTC plays in a defence against money printing and inflation.

So I suspect, the lack of understanding (or lack of comfort) lies not with the qualities and function of BTC per se, but rather not understanding the underlying technology itself.

 

[ownyourfuture]

The driving license thing is KYC know your customer and is a government requirement.

But in most states you don't need a photo ID to vote......lol

 

[37andhappy]

Australia gets a REAL Bitcoin ETF. (Not a futures based one, but a physically backed one).

http://www.afr.com/companies/financial-services/bitcoin-etf-gets-asic-nod-but-alt-coins-left-out-20211029-p594bm

 

[SecondAttempt]

Creates a host of options for you if you ever want to leave a country rapidly and take wealth with you without it being seized. Gold coins are heavy, not to mention easy to confiscate...

Once again, seems like the main reason for bitcoin and other crypto currencies to exist and for people to own them is related to criminal activity. I can understand why someone fleeing a dictatorship might be an exception but that does not apply to US/UK/Aus/Can/Europe persons which is what most of us here are.

 

[38Chevy454]

I don't own any digital currency direct, but have invested indirectly. I bought shares of MARA and BRPHF.

 

[bmcgonig]

I don't own any digital currency direct, but have invested indirectly. I bought shares of MARA and BRPHF.

Me too. I own BRPHF.

 

[37andhappy]

Once again, seems like the main reason for bitcoin and other crypto currencies to exist and for people to own them is related to criminal activity. I can understand why someone fleeing a dictatorship might be an exception but that does not apply to US/UK/Aus/Can/Europe persons which is what most of us here are.

Nothing criminal about wanting to store and preserve wealth against a declining currency. Some people prefer gold or TIPS, but far more people are moving towards Bitcoin due to is numerous advantages over other assets that one would traditionally use for this purpose.

 

[37andhappy]

This is huge news for those already living with Bitcoin as their base store of value.

https://www.cnbc.com/2021/10/25/mas...-network-can-soon-offer-crypto-services.html?

https://www.mastercard.com/news/pre...ffer-innovative-crypto-and-loyalty-solutions/

What Mastercard is essentially doing is to allowing its global network to be "rewired" to embrace Bitcoin and facilitate Bitcoin backed transactions globally. So for those who have already moved entirely to Bitcoin, they can still pay in fiat via a BTC to fiat conversion via the Mastercard payment network. We will of course see similar moves by Visa.

So essentially, as more people over time get paid in or earn Bitcoin (or a combo of fiat + Bitcoin), they can have access to both, using Bitcoin as their global store of value but making micro payment in fiat as needed, dependent on whatever country they are in.

Same with card "reward points". No longer will we need to receive ever declining fiat currency ot "air-miles". Rather, we will be able to stack Sats, which I guarantee will be hugely popular choice.

 

[SecondAttempt]

Nothing criminal about wanting to store and preserve wealth against a declining currency. Some people prefer gold or TIPS, but far more people are moving towards Bitcoin due to is numerous advantages over other assets that one would traditionally use for this purpose.

One of the most important characteristics of a store of value is price stability. Bitcoin fails that test miserably. Has it been a good speculative instrument recently, yes, of course because it has gone up like crazy. That means its price is unstable. Anyone using it to preserve wealth and maintain value needs to educate themselves on those concepts. I use a money market fund as a store of value. If it suddenly doubled in value I would sell and head fore the hills. That would be horrifying for a store of value asset.

I spent some time today strolling around the dark web. I note that there is now a market for "freshly mined, clean bitcoin." This implies that the dark web accepts, or at least believes, that bitcoin is now traceable. This should scare the heck out of anyone who owns bitcoin. If your individual coins can be traced to illegal activity in the past you could be subject to confiscation or possible prosceution as an accessory. Is that likely to happen? Probably not. But the proliferation of bitcoin tumblers, mixers, and so forth seems to suggest that there is a risk that did not exist a few months ago.

I concede that bitcoin has had a tremendous run up recently and do not suggest that 37 or any other speculators are criminals. But I do worry that the runup is fueled by speculation and the appeal of bitcoin to criminals. And let's face it, I bet a bunch of Afghani's have been putting their wealth in bitcoin over the last several months. What happens when they start converting back to real money they can spend in their new homes, EUR, USD, etc.?

Don't get me wrong. If I had to make a wild guess where bitcoin will be in a year I would put much higher probabiliy on it being double where it is now as opposed to half. But it is still not for me. I don't make investment decisions based on wild guesses and I see way too many risks with bitcoin that are seldom discussed but are revealed in other ways.

 

[37andhappy]

One of the most important characteristics of a store of value is price stability. Bitcoin fails that test miserably. Has it been a good speculative instrument recently, yes, of course because it has gone up like crazy. That means its price is unstable. ...

If I had to make a wild guess where bitcoin will be in a year I would put much higher probabiliy on it being double where it is now as opposed to half. But it is still not for me. I don't make investment decisions based on wild guesses and I see way too many risks with bitcoin that are seldom discussed but are revealed in other ways.

Many people misunderstand the concept of volatility (across many asset classes) and are deterred from investing as a result. The basic answer though is "zoom out" and "keep stacking sats over time".

Bitcoin is a great example of how volatility should not be confused with potential for long term value.

One week out - down 2.45%
One month out - up 32.2%
Year to date - up 107.7%
Year on year - up 340.75%
Two years - up 574.09%
Three years - up 875.91%
Five years - up 8815.43%

Bitcoin has to date not only a great store of value, but it has actually a fantastic compounder of value over time (even better than being a "store of value", as after all, if you wanted a perfect store of value, you could just buy the USD. 1 USD will always = 1 USD).

Bitcoin may well be the most profound multi-generational store of wealth tool we will see in out lifetime, but yes, you have to have the right mindset and understanding from the outset. If you don't have the mindset or composure to patiently hodl through both up and down swings, Bitcoin is not for you. Having said that, we can all change our mindset, as we contemplate different asset classes, their likely long term trend, and calibrate our true investment objectives with these things in mind.

A good video on this topic is here:

 

[Badger]

Never have been interested in those types of investments and I don't understand them. Like I continue to read from reliable sources, "Don't invest in things you don't understand." They seem to be more intangible than other investments. Stock market investments are difficult enough for me to understand and at this point in my life it is no longer necessary to increase my net worth. I already achieved my goals years ago and if in the future they aren't enough then the majority of the world populations will already be in trouble.


Cheers!

 

[frayne]

So I suspect, the lack of understanding (or lack of comfort) lies not with the qualities and function of BTC per se, but rather not understanding the underlying technology itself.

Exactly !

 

[jim584672]

The store of value universally recognized throughout history is physical gold. BTC is a scheme based on arbitrary math rules to create a lottery system. The entire scheme has no value and is based on bamboozling the populace into thinking it has value. It is basically a bullshit tornado. I totally understand the mechanics of BTC and am not some "Boomer" who is ignorant of technology.

It is actually are very smart "Ponzi like" scheme. The creators of a "coin" have the easiest time mining the coin. Hopefully it gains traction and they can dump out for large gains. There is a huge incentive to create alt coins in crypto. Eventually the entire space gets diluted with new alts hoping to unseat the established "coins". Supply is basically unlimited.

 

[target2019]

Many people misunderstand the concept of volatility (across many asset classes) and are deterred from investing as a result. The basic answer though is "zoom out" and "keep stacking sats over time".

Bitcoin is a great example of how volatility should not be confused with potential for long term value.

One week out - down 2.45%
One month out - up 32.2%
Year to date - up 107.7%
Year on year - up 340.75%
Two years - up 574.09%
Three years - up 875.91%
Five years - up 8815.43%

Bitcoin has to date not only a great store of value, but it has actually a fantastic compounder of value over time (even better than being a "store of value", as after all, if you wanted a perfect store of value, you could just buy the USD. 1 USD will always = 1 USD).

Bitcoin may well be the most profound multi-generational store of wealth tool we will see in out lifetime, but yes, you have to have the right mindset and understanding from the outset. If you don't have the mindset or composure to patiently hodl through both up and down swings, Bitcoin is not for you. Having said that, we can all change our mindset, as we contemplate different asset classes, their likely long term trend, and calibrate our true investment objectives with these things in mind.

A good video on this topic is here:
{edit; clipped video link)

Please, I'd like to hear more about the bolded, underlined statement, but in your own words. A tube video is proof of nothing for me, but for your generation, yes.

 

[SecondAttempt]

My money market fund has done a much better job at storing value by maintaining a stable price:

One week out - up 0.0%
One month out - up 0.0%
Year to date - up 0.0%
Year on year - up 0.0%
Two years - up 0.0%
Three years - up 0.0%
Five years - up 0.0%

My money market fund has to date not only been a great store of value, but it has actually paid a small dividend over time (even better than being a "store of value", as after all, if you wanted a perfect store of value, you could just buy the USD. 1 USD will always = 1 USD).

The volatility of bitcoin makes it a terrible store of value!

 

[captain3d]

My money market fund has done a much better job at storing value by maintaining a stable price:

I do not think many people agree that the US dollar (or other currencies) has been a good store of value lately. Do you not consider inflation to be a problem?

The US dollar has not maintained a stable price against many goods and services. It is clearly losing value dont you think?