Note: I will respond to most RELEVANT comments in the comment section below, so feel free to interact or just check it out to read additional information related to (and likely not in) the video.
Bitcoin has seen its market dominance slide from a peak of 65.5% earlier this month all the way down to 44% as altcoins skyrocket. We don't have a long history of Bitcoin below 50% dominance, but when it has gone below that level, it tends to bounce back over whenever the eyeballs shift back onto Bitcoin. Whether it is due to financial media, a new hard fork, political infighting, or whatever else, when Bitcoin has attention, altcoins tend to suffer.
If you watched this channel a while, you know I have generally preferred altcoins over Bitcoin starting in October when Bitcoin had its huge bull run with few dips or corrections as a result of anticipation over Bitcoin Gold hard fork and SegWit2x hard fork.
I rooted for altcoins all the way up until SegWit2x was cancelled, at which point I acknowledged an opportunity for Bitcoin if it dipped. It subsequently did and I was able to pick some up for cheap while the threat of the Cashening reached its peak. Since then, Bitcoin bounced back substantially in market dominance and I moved a substantial % of that Bitcoin position into altcoins and cash once Bitcoin hit $10k.
The altcoins have finally started to recover and do well, although many are still below their highs just 2 - 3 months ago. I've chosen to convert some of my positions into Bitcoin as I suspect if we undergo a correction in Bitcoin, altcoins will likely follow as they always do and I believe at some point we should see a more substantial correction for Bitcoin down to around $11 - 12k where I'll start buying.
For now, the cash position in my portfolio shall remain the same. But some of my altcoin holdings, especially the weaker ones (whether because of price or the project itself), I've started to convert into Bitcoin as I still want exposure to the market and I see Bitcoin as better exposure currently.
In the video, I also briefly discuss my feelings about Charlie Lee selling all his Litecoin and cryptocurrencies I'm holding despite seeing Bitcoin as a better opportunity than most currently. Thank you for watching / reading everyone.
I know there are some comments in this post I need to respond to - just don't have the mental energy to do so (some of these longer comments I have to be careful about how I phrase my responses). It's not that I'm ignoring you, just am busy and it will take over an hour of my time to respond likely. Don't be surprised if you get a simple response, but will do my best (I like longer comments because they add value to comment section, but it's hard for me to respond to them).
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I am skeptical about my position on bitcoin because of the current circumstances. Yes, the market share has gone under 45%, but the fees and transaction times are continuing to get worse. Since litecoin and ethereum have no issue with either of these I think these have a big potential to grow. Additionally, Bitcoin is commonly used as an exchange medium for most alt-coins but I wonder how the recent rise in fees will affect this. More and more I believe that ethereum will be the go to for exchanging alt-coins. Lastly, I am quite bullish in Ripple at the moment because of the continued banking and media support that has come within the past week. You said in your video that you are scaling back on your position in almost all alt-coins, I am wondering if Ripple is one of these. I absolutely love your content and will continue to support it, keep up the amazing work.
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Thanks for the kind words. Yes, Bitcoin sucks right now for transactions. But majority of transactions are internal to exchanges, which is why it continues to dominate even though it has absurdly high fees and slow transaction times. It's difficult to disrupt that paradigm - Ether has attempted to do so for quite some time with limited results, at least in comparison. As such, it will likely remain king as the cross-currency of choice for most pairs.
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I've noticed this as well and found that ETH was better as an exchange medium. It feels painful when I need to transfer BTC so I go the ETH route these days. Yes, very good video and has me thinking how I should proceed.
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Doesn't it seem strange that there hasn't been a Goldfinger attack on smaller altcoins, since a small fraction of the mining infrastructure of larger coins (mining ownership is highly skewed) could be used to get 51% mining bandwith for some altcoins?
Do you think some other transaction verification methods of altcoins (like IOTA) are strictly better than that of Bitcoin?
You mentioned that 600B is too much for the fundamental value of all cryptos. How would you value it instead? One order of magnitude less? What is your response to critics like me who claim that, at best (i.e., using the best aspects of all cryptos and ignoring all disadvantages like volatility), any cryptocurrency's value is limited to:
(i) anonymous transactions (e.g., monero). (The catch-22 is that when illicit activities and/or market cap increase, the probability for fiat-crypto exchanges being banned increases.) Of course sometimes the need for anonymity doesn't mean that it's for anything illegal, and one could argue the morality of certain illegal transactions (e.g., victimless crimes, sidestepping authoritarian governments). At the other side of the coin, one can also reach pseudo anonymity in fiat. My main point is: Almost all transactions that most people typically engage in, however, have very tiny upside when they are anonymized.
(ii) transactions that are committed without the possibility of dispute. This is also possible in fiat (e.g., credit card gift cards) but not often used since most people want intermediaries to resolve disputes.
(iii) disassociation from fiat inflation. After a reasonable point of wealth, nobody should store most of it in cash anyway. In most nations, inflation only affects cash-on-hand as a net negative return on investment. The cash-on-hand shouldn't be that big and is spent very quickly (inflation doesn't affect it much). If there is western geopolitical instability, the incentives may change for miners, and the security and reliability of any crypto currency is in question. At the same time, the ultimate "doomsday resource" has been precious metals in the hearts & minds of the general population for millenia. Also, instability carries the risk of EMP strikes and other infrastructure vulnerabilities that affect crypto. One could also argue that a Western doomsay scenario is extremely unlikely. Admittedly, the crypto resilience of abusive governments in the developing and third worlds is harder to criticize.
My overall claim is that crypto does have its practical use cases, but those are rare & extremely overrated (especially by the dogmatic/idealistic Libertarian/Anarchist group).
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That's a lot of questions, so forgive me if I don't respond to all of them. It doesn't really surprise me too much - Bitcoin was as small as those altcoins at one point and while there have been attacks, it has successfully survived. It relies on the economic principles behind game theory, which is interesting seeing them in practice.
I am not qualified to say if other technologies are strictly superior to Bitcoin. What I can say in a simplified sense is that generally nothing is as it sounds (e.g: white papers tend to overexaggerate the possibilities). Once we get into more practical applications, it will be easier to say what is or isn't superior. There are plenty of times where the technologically superior option has lost out to ease of use, better UI, and a number of other factors.
Fair value is impossible to determine accurately, but I'll likely be estimating a range for Bitcoin at some point and then based off that, you could theoretically calculate a range for the cryptocurrency market as a whole after using a certain dominance level for Bitcoin.
My response to such critics is you're generally right. Most people clearly don't care about privacy given that most people don't use private browsers, they use Facebook and Google, they give away their information to unknown websites just for a free PDF, etc. Most people do want consumer protections in place as you mention (an intermediary for dispute).
Lack of inflation is overexaggerated too for a number reasons, some of which you mentioned and some of which you left out (e.g: interest rates generally offset inflation rises too). I never cared for doomsday resource just because likely only food or water will matter then.
There are use cases we haven't imagined yet though. Just this platform (Steemit) illustrates that possibly something awesome can be created with magical internet money (I say possibly because it depends on people investing in the platform and on less rampant abuse, both factors which I question if 1) we see altcoins crash and 2) we don't see more automated ways to prevent abuse).
Even if we just look at the peer-to-peer transaction currencies, there are three major use cases
Obviously we really aren't close to #2 or #3 yet, but that's the point of innovation. I'm more interested in what Bitcoin will look like in 20 years if I'm being honest, assuming it survives (which is likely going to depend on how gridlocked it becomes due to decentralization).
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Thanks for taking the time to respond with your detailed and honest answers. I find your videos very interesting, even though I don't trade crypto.
Even if we were at that stage, why would they be superior to equivalent fiat services? I don't see the "value-add" of using crypto over fiat for those cases.
After I wrote my questions, I actually found a more eloquent critique of crypto use cases: https://hackernoon.com/ten-years-in-nobody-has-come-up-with-a-use-case-for-blockchain-ee98c180100
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Bitcoin has been growing very very slowly all day. I'm really excited about ETH, pretty much all my good gains have come from this coin... and I really like the team and the concept.
What do you think the market dominance of Bitcoin will be in the next year or two? I think it might always be the leader, but I imagine eventually it might only be 25% or so.
I'm really excited to invest long-term in Steem... I would love to see where it can go... it's a great use of the blockchain in my mind.
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It's tough to say. There is a LOT of worthless and overvalued altcoins right now, so I don't see Bitcoin's dominance going that low in long-term. However, the market share of 'winners' in the space will naturally increase in long-term so don't think it'll ever go back to 80%+ (unless we experience a massive and long-term bear market, where people's confidences in altcoins tend to diminish).
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Haha, thank you for your reply... so we're in agreement then... BTC's dominance will definitely fall somewhere between 25% and 80% in the next few years.
I think everyone should have expected the market to fall over the holiday season... no traders would keep their money in a volatile market while they weren't keeping an eye on it. I'm just going to cease any trading efforts, hold everything and buy in with any Christmas-gift money, totally ready for the January bounce back.
Love your videos.. I'm super excited you're producing daily content.
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Thank you for your videos. I learn a lot from your 'tough love' and not just optimism like I see the majority of cryptocurrency video producers make.
I started to look at all my alts compaired to BTC as you and a few others suggest. If that is the first concept to nail down when trading these coins what would you say the second would be?
Thanks for another down to earth video <3
J. R.
PS: I have no trading experience. I'm just a nerd who fell in love with BTC back in 2015.
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Probably the biggest part of all of this is to just not be emotional. Thank you for the kind words.
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Dropped my BTC, added over half of it to my eth holdings.. sitting on tether with the other half now. Setting stops on all my alts. If this takes more than a day I'm gonna convert the tether to bit usd.. don't trust that coin.
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Do you think there's a possibility of Ethereum overtaking Bitcoin in the next few years? I actually find it being a better exchange medium than Bitcoin and also the fact it's a platform where other companies have their radar on especially with what happened with Crypto Kitties as a blessing in disguise and how much was netted in revenue. It's like the early days when Angry Birds first came out on the app store and all of a sudden an explosion of other games that followed.
The upcoming Casper release and other technologies that will be released on top of the Ethereum platform such as the Request Network looks like 2018 is when we see things come together for real applicable use. I understand Bitcoin is King but as we watch events unfold literally each day, the technology, uses and benefits of altcoins (especially Ethereum, in my opinion) exceed Bitcoin in most ways. Other than the majority of people and Wall St coming in not knowing anything else except Bitcoin, I don't know how long that will hold up as the go-to for cryptocurrency especially when I can't find proper use for it.
Once the scaling for Ethereum is resolved and other companies release their own mega versions of Crypto Birdies or Crypto Pokeys without any congestion issues, the general public will move towards it followed by more companies that direct their attention to where the transactions are being made. I'm not surprised if companies as of now are working on Dapps that become indispensable on the platform and integrate into people's daily lives next year. I think Ethereum has the potential to be the first in overtaking Bitcoin's market cap. I'd like to know if you have a different view of this.
Your thoughts are much appreciated and thank you for making such great videos from an objective standpoint.
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I want to buy Raiblocks. How much the price will fall?
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Awesome video. I've noticed the same trend with altcoins and bitcoin as well. Is there any chance you could do a video about Reddcoin? It appears to be gaining a bit of momentum recently and I have no idea why.
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Don't you think its possible, that people are ennoyed of Bitcoin and may use it less and less?
I think altcoins may be much more attractive to use and invest in. I dont see Bitcoin always come up again.
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It's funny as I was freebaging a few altcoins when your video came out. I don 't know what's going to happen next but I like following Warren Buffet's advice : "Be greedy when others are fearful".
However I think people might lose faith in Bitcoin if the fees keep going up. It's becoming crazily expensive, so it makes it a less and less attractive currency to trade with. So in that sense I think ETH and LTC has a lot of room to grow.
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It looks like most altcoins are following BTC (with the exception of XRP) currently almost all of them are recovering in parallel with BTC . When you look at the rate, altcoins with below $1 value tend to recover much faster than BTC (percentage growth) . So don't you think it is better to keep the below $1 altcoin instead of converting them to bitcoin?
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I agree with you on most of the things you said. Bitcoin will have a pretty tough time in the next 2-3 weeks. Everybody who recommended that their friends should buy bitcoin will have a tough time as well. Bitcoin will recover in the long run, and we do not have to wait for $20k bitcoin too long.
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Which exchange do you use to purchase altcoins? Are you generally using BTC to pay for them?
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I think Ethos can overtake coinbase and majority of all exchanges + majority hardware wallets if they can complete their roadmap, I think especially with the recent news of Bcash listing there is less trust in coinbase. Global Fiat gateway and a universal wallet and much more with lower fee's I think it is a high potentialcompetitorr. What are your thoughts on it taking over coinbase?
Also from the recent video I was curious if you sold your SALT position as their platform still hasn’t released and their price still has room to rise yet.
Also if you need anything designed in illustrator or photoshop I’m more than happy to help.
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