Hi Tuur,
Thanks for doing this AMA and for providing such valuable information and advice. You play a very important role in the bitcoin ecosystem, by looking at the cryptocurrency phenomenon from various perspectives, sending info and grounding other investors. Thanks

You're welcome, I'm flattered

You recommend roughly 6% to be invested in altcoins. What are some 4-5 significant altcoins worth researching?

I suggest going to coinmarketcap.com and having a look at the top 20. The guys at CoinGecko have developed some great, free metrics to look at the various altcoins.

For more thoughts on cryptocurrency protocols, see our report.

Also - do you think the next bitcoin bubble will start before or after the halving? What is the approximate range for the top of the bubble? No predictions just opinion

Ceteris paribus I would say before the halving. Speculators tend to anticipate events. But there are many more factors than just the halving, so we'll have to see.

As for the top of the next bubble, if it comes, I honestly have no idea. On the high end I find myself talking about $3,000, on the low end $1,000. Determining the top of the bubble is better done using ways to gauge sentiment, in my experience. The level of exhuberance in the media and on forums will often tell you more than a price chart.

Hi Tuur,

Excellent report!

In the report you said, "There are four prominent risks associated with Bitcoin" and the fourth risk you list as, "a sustained attack by an organization with substantial financial resources (such as a government)."

I'm wondering what are your thoughts on the idea of government not just attacking it, but actually outright banning it. I tend to agree that attacking is probably not a big concern, but governments can take it a step further because they have the power of law. Now ultimately I don't think it will matter, just as laws haven't stopped Bittorrent and file sharing, but do you think it could scare enough people off that mainstream adoption would take considerably longer?

Thanks! Dallas

Hi Dallas,

I agree with you on the impossibility of a government ban. If that were to happen, I do also think that it would substantially hinder mainstream adoption, at least for a number of years. For more, see my response to "What is the biggest challenge that Bitcoin faces right now toward gaining more user adoption?": http://ow.ly/V76G3

Hey Tuur,

I guess you will be more happy than others with the the question since you are first an investor.

I was re-reading Antifragile by iconoclast thinker Nassim Taleb recently. He writes Having met or read about a few people in the bitcoin community, I have come to think it's a very relevant question and you can better weight their opinions having an idea of how many Bitcoins they hold (or do not hold.)

I'm now asking every participant the same question:

- Do you mind to tell us which percentage of your net worth and/or liquid assets you hold in Bitcoins ?

Hi Skin_in_the_game. That's a great question!

Back in 2012 I invested some 7% of my financial assets into Bitcoin. Currently I have a +70% exposure to Bitcoin-the-currency. This concentration would have been lower had I been more practically prepared for the rally in late 2013. I plan to diversify my holdings during the next rally in Bitcoin.

Also for you I have another question since you are kwown to be sceptic about the current monetary policy in most of the world:

- What do you think of gold in an environment where Bicoin would be rising ? At what point (market cap) Bitcoin starts to seriously compete with gold and grabs some of its marketshare as a store of value / hedge against monetary risk ? (I think now it works more as an investment with a high risk/reward profile akin to an option).

In 2014, the world gold production was 2,860 metric tonnes. In troy ounces, and multiplied by the gold price: 9.1951e+7 * 1,072 = $ 98,571,472,000 worth of gold, or $98 billion.

For the next four years, the amount of new bitcoin being produced by miners will be about 657,000 per annum. For that to become worth 10% of the annual gold production, the value of 1 BTC would have to rise to $240,000.

Thanks for the answer. Your calculation seems off no? For 10% of the gold production, I have 1 btc at 15 000 USD (98,571,472,000x0.1/657000).

Hi Tuur and thanks for the AMA,

Would you have advised Bitcoin as you did, back in the day, if you had the cautionnary mindset you seem to have today with respect to fungibility issues?

The reason I'm asking is the cautionary stance you seem to take w.r.t. fungibility and the false (I'm affirmative here) assumption that sidechains might be a solution. Even without diving into the technical aspects, it is trivial that sidechains offering confidential aspects would not increase the overall fungibility of Bitcoin. (it's still visible if some coins went through the "anonymizer" sidechain, leaving anyone the possibility to take decisions based on that).

Hi binaryFate,

I'm not sure if I understand your first question, but I'll give it a go.

I think that perfect fungibility of an asset is virtually impossible, and not necessarily desirable. What matters is sufficient fungibility, and I think that Bitcoin has that in spades. What is the problem that you see Bitcoin run in to? That we get different classes of coins, some blacklisted and others not?

I am aware my question might be understood as slightly passive-agressive. If you feel so, please don't take it personally and consider it in a broader context: in your opinion, is it possible/often the case that early Bitcoin adopters adopt over time the very same type of tunnel vision (towards Bitcoin, and against anything else) they were happy to not have (towards fiat for instance) when they found out about Bitcoin?

This question I understand better! I think it's an important one to consider, thanks for asking.

I had my frustrations in the gold world (and people like Trace Mayer had similar experiences) trying to convince people of Bitcoin's potential, during which I also encountered a lack of interest and something that could be called tunnel vision. So I think I know what you mean.

Some thoughts on the different kinds of people that "don't see it":
1) the person feels that the 'new thing' potentially threatens their career or social status if he were to embrace it, and therefore he shuns it
2) the person believes the 'new thing' violates the rules that he's internalized, i.e. he doesn't think there can be another paradigm
3) the person is settled in a career and in their network, and simply has less time to research new things
4) the person is right and I am wrong

During the years I've spent thinking about the economy and investing, I've encountered people that fit each of these categories, and combinations of them.

I think it's true that there is a risk that I could develop some kind of a 'Bitcoin tunnel vision'. That's why I try to apply these categories to myself as well: "Do I feel threatened by this?", "Should I be looking more into this? What is the evidence for that?", "Is there another perspective I should consider to appreciate this?", "What are arguments in favor of the 'new thing'?", "Have proponents of the 'new thing' convincingly rebuked my criticisms?".

In 2014, the world gold production was 2,860 metric tonnes. In troy ounces, and multiplied by the gold price: 9.1951e+7 * 1,072 = $ 98,571,472,000 worth of gold, or $98 billion.

For the next four years, the amount of new bitcoin being produced by miners will be about 657,000 per annum. For that to become worth 10% of the annual gold production, the value of 1 BTC would have to rise to $240,000.

Thanks for the answer. Your calculation seems off no? For 10% of the gold production, I have 1 btc at 15 000 USD (98,571,472,000x0.1/657000).

You're right, thanks for pointing it out! I corrected my response now.

Actually $15k for a Bitcoin (market cap ca. $315 billion) does seem like a possible pricepoint at which Bitcoin could start seriously chipping away at global gold demand, especially if the market cap can be held at or above that level for a long period of time.

Do you think people who hold their wealth in Gold/Silver should be threatened by "asteroid mining"?

https://twitter.com/AsteroidEnergy/stat ... 6581107712

Hi 1love,

I think that is certainly a possibility, although I don't know enough about the practical feasibility of asteroid (of seafloor) mining. If gold is no longer scarce, it will lose its alure. It seems to me that silver is less vulnerable to this threat, because it's so much more bulky: 1 tonne of silver only yields $450,000 in the market today, whereas 1 tonne of gold you can sell for 75 times more money: $34 million.

Hi, I thought I'd share this news that came out today, which supports my contention that in the long run, governments will 'buy into' Bitcoin.

Two Barbados central bankers have made the case that Bitcoin should be included in the international currency reserves of the island:
http://www.centralbank.org.bb/news/arti ... l-reserves

The reason why this is a good idea is not only because the value of Bitcoin could go up (and thus benefit the treasury and financial welfare of the country), but also that it provides a buffer to defend a nation against that is known as a "speculative attack".

Why, and how that would work was described in a 2013, which speculated that the IMF will eventually build up a Bitcoin reserve paper:



Imagine the potential of the bitcoin price, and its rise in international credibility, if one central bank after the other allocates even a fraction of a percentage of its reserves to BTC...

- -

Edit: in the paper, the authors project a whopping $224M return on a mere $27k investment!

Hi, I thought I'd share this news that came out today, which supports my contention that in the long run, governments will 'buy into' Bitcoin.

Two Barbados central bankers have made the case that Bitcoin should be included in the international currency reserves of the island:
http://www.centralbank.org.bb/news/arti ... l-reserves

The reason why this is a good idea is not only because the value of Bitcoin could go up (and thus benefit the treasury and financial welfare of the country), but also that it provides a buffer to defend a nation against that is known as a "speculative attack".

Why, and how that would work was described in a 2013, which speculated that the IMF will eventually build up a Bitcoin reserve paper:



Imagine the potential of the bitcoin price, and its rise in international credibility, if one central bank after the other allocates even a fraction of a percentage of its reserves to BTC...

- -

Edit: in the paper, the authors project a whopping $224M return on a mere $27k investment!

Hi Tuur, thanks for providing your opinion on this. I saw the news earlier too and it makes me quite bullish after reading about it too. One can only hope that this will actually come to fruition in Barbados and other countries to follow.

Is it a good time now to get into cryptocurrency (Bitcoin)? Do you think there's an alt-coin (Ripple) can take the #1 spot from Bitcoin?

Hello am novice. I have send unconfirmed transactions on my wallet (bitcoinwallet.com) and I am stuck. should I forget about the coins or there is a way i can get it back? I have tried to reserach of child pays for parents and replacement methods but I do not seem to get anywhere with the wallet am using. While we are at it could you recommend a good bitcoin wallet.

What is your opinion on crypto dividends?