I don’t give advice on Quora.Here’s what I tell myself-Dear Terrence,Now is a horrible time to buy Bitcoin, Ethereum, Ripple and Litecoin (collectively, “BERL”).There is no way BERL is worth anywhere near the current ~$90 billion collective market cap.BERL has been massively overvalued for a while now.Avoid cryptocurrencies generally unless you can get in on the presale.Even then, it is a bit of a gamble and the terms matter.We're in a cryptocurrency bubble.Bubbles tend to go on much longer than people think they will.Smart Wall Street friends were predicting the mortgage bubble would crash back in 2003.They were 5 years early.But bubbles always pop.No one knows when.The reason BERL is overvalued is because no one outside the niche space of cryptocurrencies will miss them if they disappear tomorrow.There’s no clear path to a killer app that can go mainstream.What big, legal unmet need are any of them filling?Or clearly on the way to filling?Potential is potential.Buying one ether (one Ethereum token) for $376 gives you a lot of potential for a big payoff.

You know what else has gives you a lot of potential?376 $1 lottery tickets when the MegaMillions jackpot is $500 million.That doesn’t mean your lottery tickets are worth $500 million.Or even $376.The average lottery ticket with a face of $1 is worth quite a bit less than than $1 because of the high margins and expenses embedded into the system.When you overpay for a cryptocurrency, you are buying lottery tickets.With much worse odds.So far the only legal killer apps for the cryptocurrencies you mentioned are:Ethereum - ICO platform/gateway.Ethereum’s value as an ICO platform drops when the ICO bubble implodes or they pull another TBTF bailout of the next DAO fiasco.Ethereum is also a gateway to other coins.Meaning people usually buy Bitcoin or Ethereum with cash and then convert to a hot ICO cryptocurrency.Ethereum may implode when altcoins go to zero.Bitcoin - Store of value/digital gold and gateway to other coins.Bitcoin dies if the code is somehow not secure because, e.g., quantum computing kills it.[1]

It may also die if there is no other real application.Gold as useful for a long time.Right now Bitcoin is not scaling.Transaction times, fees and unconfirmed rates keep going up and up.Ripple - Great PR.“Ripple's focus is on providing technology to banks looking to make cross-border payments more efficient” (hat tip @Kenny Alves)Why won't banks just fork the open source code and build their own thing.Including trading with each other on it.I helped create several of the default swap indices traded by many banks.When I worked for several years on Wall Street, the only things I saw that we did that was even close to “open source” was work on standardizing industry deal documents such as for swaps and derivatives through International Swaps and Derivatives Association, Inc.Litecoin - Potential to be a friendlier, more scalable version of Bitcoin.bitcoin farming forumLitecoin already activated SegWit and Lightning - which Bitcoin is still trying to do many months after each was first created for Bitcoin.That said, I’m bullish on cryptocurrencies long term.bitcoin currency magento

Cryptocurrencies and distributed ledger tech are a great way to help with identity management, tracking things without relying on any single entity.The winner in this space might be a cryptocurrency that hasn’t even launched yet.If you have strong conviction to buy, then buy and hold until you lack strong conviction.If you don’t have strong conviction, don’t buy or, if you are holding, then you should sell.Else you’ll panic sell.No FOMO.Or panic sell.Be extra wary of social proof.Everyone is susceptible to it.As with any “investment” (really, speculation), don’t bother unless you identify a real, unfair advantage over others in buying BERL.ethereum radeonWhat do you know that they don’t?One or more cryptocurrencies will make it big eventually but that’s a guess.Maybe the winning cryptocurrency has not launched yet.comprar bitcoin barato

Apple’s iPhone and Google search were latecomers.99.9% of cryptocurrencies are worth basically zero by any reasonable measure.What is the evidence any of them have:a killer app?pricing power?(Here’s a different take on Bitcoin transaction fees: Can Bitcoin transaction fees keep going up because there’s no good substitute?)an unbreachable moat surrounding a valuable castle?(as Warren Buffett might say)The vast majority of us should treat cryptocurrency as lottery tickets.Just like you spend $20 or whatever at the local 7–11 or gas station when the lottery goes over $100 million, you can put a small amount of play money - money you won’t miss - on cryptocurrency.Remember, you do not have to buy lottery tickets.If you do buy cyrptocurrencies, just hold it and forget it.It’ll probably go to zero.But I believe one - possibly more - of them might change the world and finally find a legal killer app with an unbreachable moat in a massive market.In 2007 I had relevant, legal, solid inside information because I worked on Wall Street at one of the banks that massively screwed up - Merrill Lynch.I dumped almost all my equity positions one month off the market high.And about 10 months before Lehman imploded, nearly taking down Morgan Stanley, Goldman Sachs, many other institutions and causing a near-global depression.Fast forward to 2017.acheter bitcoin

I again have legal inside information.Not as great as last time.But I even turned down a hot ICO presale I had access to.Why?Because I don’t really do quick flips.And I don't know when the bubble will burst.Bottom line:Because of the pseudonymity and decentralization, a cryptocurrency will always be useful for helping people and organizations:launder moneybypass capital controlsdo other illegal activity.Silk Road did this, got caught.Now the Silk Road CEO is serving a life sentence in the US.Another way to look at it is this:You either have strong conviction present trends will continue or you don’t.If the former, then act on your strong convictions.If you buy, this will help the good folks who are trying to ICO (disclosure: I am advising a new cryptocurrency investment fund (in formation) and a new cryptocurrency).If you sell, then you will be unlikely to panic buy later.If you’re not sure present trends will continue, don’t buy.Just wait.litecoin chart 2015

Warren Buffett often waits a long time before making an investment.If you think the market is overvalued right now but believe in [pick your favorite cryptocurrency] long-term, then don’t buy.Wait.The dot com bubble started in 1997.As you can see, there were many times to get in the NASDAQ below 2000.Until 1999 to 2001.If you bought at just below 2000 - let’s say in 1998 - you’d be barely up in 2005.7 years later.So you can buy and hold.But are you buying at the peak at 5000?What’s the point?I have had to dump stock to raise cash to help someone else I cared about meet a margin call.I made sure that person never needed to ask me for an emergency loan ever again.:)The world’s best investment banks with really smart traders and risk managers - Goldman Sachs, Morgan Stanley and Merrill Lynch used leverage, had strong conviction (indeed, some of the ones responsible were quite arrogant) and nearly imploded in 2008.What’s the killer app or apps for each right now?I understand there’s a lot of activity.Who cares?I care about results.Bitcoin has been around since 2008.Is it like startups?Because 92% of high growth startups fail.

(Source: Max Marmer, blackbox, Bjoern Lasse Herrmann, blackbox, Ertan Dogrultan, blackbox Ron Berman, UC Berkeley, Startup Genome Report Extra on Premature Scaling: A deep dive into why most high growth startups fail, August 29, 2011)Webvan and Kozmo - each a poster child of the dot com bubble - both made something people want.But that’s not enough.Delivering groceries, etc. for free is making something people love because you are massively subsidizing the costs.“Hi, would you like to have your groceries and food delivered for free?Same cost as shopping in the store.No tipping!”That’s not a business.That’s a VC funding your life.[2]Whenyou invest in cryptocurrencies, who’s life are you funding?Are you just burning money?All that said, if you’re going to invest in BERL, this may be a good way to do it:How to Take a Crazy Risk Without Going InsaneThanks to Alex K. Chen and Gaultier Lecaillon for inspiring improvements.More improvements to come.Footnotes[1] What will quantum computing such as D-Wave do to bitcoin mining?[2]

VCFMLUpdate 5/17/17This post was merged from a previous question specifically about Ethereum.If you’re interested in learning about different ways to value Bitcoin, Litecoin or Ethereum long-term, I expanded on that topic here: Which is better to invest in: Bitcoin, Litecoin or Ethereum?– HivergentOriginal PostRecently in a round table discussion, Joseph Lubin, Ethereum co-founder, stated that he believes the value of the Ethereum market cap could go to $1 Trillion.No one else in the room even blinked at that assertion.The current market cap of ETH is around $10 Billion.What we can say is that either Ethereum is much more valuable than its current value or worth nothing at all.There really is no in between with the path we are on.So if the $1 trillion is true (big if), you could make a 100x return on your investment.Does that sound too late to you?Bitcoin and Litecoin are the definitions of Cryptocurrencies.They offer a replacement for fiat currencies such as the Dollar, Euro, Yen… This means you trade it for goods and services, in the same way you would today.Ethereum is much more than a cryptocurrency.