Why I won’t Touch Cryptocurrencies and Neither Should You

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Wanderer

The Wanderer retired from his engineering job at a major Silicon Valley semiconductor company at the age of 33. He now travels the world, seeking out knowledge from other wealthy people, so that he can teach people how to become Financially Independent themselves.
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On Friday’s reader case, our intrepid reader Condos&Crypto said that stumbling across our site prevented her from taking the proceeds of her house sale and dumping it all into cryptocurrencies like Bitcoin. In the past, I’ve always recommended against having significant exposure to crypto, but that wasn’t because I had strong feelings one way or another, it was because I didn’t understand cryptocurrencies all that well.

So over the past year, I’ve been following the whole cryptocurrency space and learning more about this thing, and what I’ve learned has horrified me to the point that I won’t touch crypto at ALL anymore.

And I’m not just talking about the hacking issues. We know that Bitcoin exchanges can and will get hacked. But the answer, I believed, was that the user had to understand how to securely hold your crypto using an offline or “cold” wallet. That means storing the private key offline on a USB key or even printed on a piece of paper and kept in a safety deposit box.

Anyone who lost money in any exchange hacks did so because they kept their coins on the exhange. If you only moved coins into the exchange “hot” wallets when you made a trade and then immediately moved them offline to your “cold” wallet, I reasoned, you could be reasonably protected from hackers.

Then the QuadrigaCX Incident happened.

The QuadrigaCX Incident

For those not plugged into the crypto world, QuadrigaCX is, or rather was, the biggest Bitcoin exchange in Canada. I’ve used them before to exchange small amounts of Bitcoin when I was playing around with the tech, and everything seemed fine. My transactions went through, nothing seemed amiss, and I wouldn’t have thought twice of using their platform again in the future.

Then in December 2018, their CEO, Gerald Cotten, died suddenly while on honeymoon in India. And Gerald Cotten was the only one who had the private keys to QuadrigaCX’s wallets that held their entire bitcoin inventory. And that meant QuadrigaCX instantly lost control of their entire Bitcoin inventory.

The irony here was that this didn’t happen because QuadrigaCX had bad security, but rather that Cotten was too paranoid about it. Previous hacks in the crypto space were caused because multiple people had access to the private keys and hackers were able to compromise one of them. The Mt. Gox hack, for example, happened because someone managed to install malware onto the laptop of an auditor. Once the keys are compromised, the wallets can be emptied and there’s nothing you can do about it.

To prevent this, Cotten made sure he was the only one with the key, and he kept it on his laptop which he kept encrypted with a password only he knew. So when he died, nobody could get into that laptop to get the keys back out. So in a way, I guess his security was actually pretty good. Yay?

Everyone who had any money stored in QuadrigaCX lost it. Every single one. Right now, investigators are still sifting through the remains of the company, but it looks like total losses range from $190 million to $250 million.

Bitcoin Exchanges Are Not Regulated

When I was nosing around the crypto landscape, I remembered QuadrigaCX being one of the more legit-looking ones since they were supposedly registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), as well as with the BC Securities Commission. So how could something like this happen to a company that was regulated as a financial institution?

Turns out, it wasn’t regulated as a financial instutution, because QuadrigaCX was able to argue that because they were exchanging digital tokens rather than stocks, ETFs, or derivatives, they weren’t a financial institution and therefore weren’t subject to any regulations of any kind.

This is actually a common thread I’ve noticed inside the crypto space. They love to tout how much money they’re making, yet when it comes time to comply with laws and regulations, they argue that it’s not real money and therefore the laws that govern banks and brokerage firms don’t apply to them. The reason for this is that crypto enthusiasts are, by and large, intensely anti-government.

Bitcoin, after all, was created in the midst of 2009’s global financial collapse. Trust in governments and banks was in the toilet, and the idea of a digital currency that could be anonymously traded and not subject to any government or bank was extremely appealing.

But as a result, the financial protections that we all take for granted when we deposit our paychecks into our savings accounts don’t apply here. No bank would have been allowed to have the entire organization controlled by one guy with a password that only they know. And when banks do collapse, there are safeguards like the CIPF/CDIC (or the American Equivalent, SIPC/FDIC) that make sure customers can get their money back. No such protection exists for crypto exchanges. If the money’s gone, you’re out of luck.

And what made it worse is that when their CEO died, QuadrigaCX initially tried to conceal the news that they, you know, couldn’t exchange bitcoins anymore for MONTHS. So anyone who deposited their coins in, traded it, and tried to withdraw their money were faced with an unexplained delay. That delay, as it turns out, was caused by the fact that the exchange had no control over their coins, and therefore their money was already gone.

So my clever solution of holding bitcoins in an offline cold wallet and only transferring it into a hot wallet to trade would not have helped. If I had transferred coins into the exchange after their CEO died (and again, there was no way of knowing this had happened), all my money would have been immediately gone and there’s nothing I would have been able to do about it.

These Exchanges are Sketchy A.F.

And on top of all that noise, following the investigation of the QuadrigaCX incident in the news has convinced me that these exchanges are, to use the technical terminlology, Sketchy As Fuck. How sketchy you ask? Let me put it this way: I’m not even convinced that this CEO guy’s actually dead!

First of all, Gerald Cotton died in India, a country known for being able to easily obtain fake death certificates. Think I’m joking? Here’s an article literally titled Want a Fake Death Cerficiate? from the Times of India.

Then the death certificate issued misspelt his name as “Cottan.” But fine, typos happen.

Then it was revealed that he changed his will to leave all his assets to his wife just 12 days before he died. Suspicious sure, but not exactly a smoking gun.

Oh yeah, and then there’s the small matter that the investigators trying to reconstruct the cold wallets from blockchain analysis discovered that the wallets had been emptied prior to Cotten’s death. Even if they get the keys back, there’s nothing left.

Yikes.

Add to that a recent Globe and Mail report that found out that Cotton’s partner and co-founder Michael Patryn was using a fake name. His real name is apparently Omar Dhanani, who, and I quote “was a member of an online marketplace called Shadowcrew.com that trafficked in stolen credit card numbers and identities.” Plus he was convicted in the US for money laundering and served 18 months in prison.

At that point, I was like “You know what? I’m out.”

Crypto only has value if you can trade it on an exchange. And these exchanges are completely unregulated, constantly hacked, and are apparently run by convicted felons. There’s no way I can see to safely trade in this space that would prevent me from getting all my shit stolen, so I have concluded that the only safe amount of Bitcoin to hold is none.

Cryptocoins are NOT an investment

So my yearlong experiment into the crypto space has come to an end. You can debate all day whether you think BTC will go up, down, or sideways, but at the end of the day that debate is pointless. The idea that these things could ever be used as a real currency or taken seriously as an investment is laughable. When the exchanges aren’t being hacked left and right, they’re failing all on their own due to their owner’s hubris and lack of respect for financial regulations and government oversight. At most I owned a few hundred dollars worth of crypto during my experiment, and I’m glad to be rid of even that.

If anyone reading is thinking of buying crypto: Don’t. And if anyone has any money already in crypto: Dump it. But do it in small transactions, spread across as many different exchanges as you can, and verify that each withdrawal actually makes it into your bank account before you proceed with your next sell. Good luck.

 


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65 thoughts on “Why I won’t Touch Cryptocurrencies and Neither Should You”

  1. Bitcoin is the only real money, why would you trade it for the greedy bankers fiat money? Maybe you can’t see it’s value, but in 3rd world countries it’s already used as store of value.
    Exchanges are not Bitcoin.
    Notice I didn’t mentioned “Crypto”? Why would that be…

    1. …because I can use fiat money to buy food? I can’t buy anything with Bitcoin. Well, except illegal drugs I guess. I can use it to buy illegal drugs.

    2. The more fiat you have the less open minded I find people are about Bitcoin as it becomes less about Bitcoin and more about the realisation that their fiat isn’t sound money which is not something you’d want to hear. This is more about learning the history of money.

  2. Yes I had some Litecoins on the Binance (Chinese) exchange but they locked me out of the account and to recover it I had to use my PIN which I forgot, my token code which I wrote down but isn’t being accepted, know how many fractions of Btc, LTc I had and many more questions to recover my account which didn’t work. Called them many times and never got thru…gave up already trying to guess all those things and getting denied. Conclusion, I lost about $5400 in coins on that Exchange. So yes, I agree with you, Exchanges are sketchy and not reliable…at least using Binance was my worst mistake.
    Coins are not investments exactly as currency are not investment!!

    1. Last resort is you could tweet cz_bjnance on twitter as he’s pretty active. Tough lesson though. Use a hardware wallet next time. No keys? Not your coins.

  3. Great post.

    The hack/fall of Mt. Gox that was reported by the Malicious Life podcast was truly eye opening for me and isnreally worth of listen! (https://www.stitcher.com/podcast/malicious-life)

    Since we are now in preservation phase of our nest egg, we don’t mind a solid 7-8% of market return over the long run over crazy volatile crypto “investment” that can just disappear overnight! This make us sleep much better st night.

    1. You are making a solid 7 or 8%. I would be over the moon to make those kind of returns. I am lucky if I can eek out 4%. What gives?

  4. When I read this title I thought it was a riddle and the reason you won’t touch cryptocurrencies is that it would be physically impossible to do so (that was a bad joke). Sketchy exchanges and pure speculation as opposed to investment I suppose work as answers too. Part of the question I ask is why be needlessly risky with your FI? In other words, if you can get there safety with proven alternatives in say 10 years, why would you risk turning that into 15 or 20 years just for the small possibility that you could have FI in 5? I like your caution on crypto and leave speculation to “fun money” or politics rather than finances. Thanks Wanderer

    1. Yeah I caution against buying individual stocks because it’s possible (though unlikely) to drop zero in the event of bankruptcy. With BTC, the likelihood of catastrophic loss is much higher since all it requires is someone spoofing your SIM card or an exchange doing something sketchy and poof, it’s all gone.

  5. Your story here confirms a long-standing (but naive) belief I’ve held about crypto-currency; that it’s a playground for thieves to gain access to your “real” money. It’s scary to see how the media has been (recently) selling people the idea that you can earn a “passive” income by setting up a bitcoin mining farm and buying into this stuff. It created a secondary market for computer graphics cards and probably cost amateurs more in their electric bill then it will ever return in bitcoin. Even if they were “profitable,” you’re still at the mercy of a system designed to be unregulated (read: unsecured).

    1. I was briefly considering becoming a blockchain miner but the bottom fell out on the mining fees market before I could get it set up. 🙁

      The whole space feels like the wild west, and that’s before I learned about the rampant thievery and the unregulated exchanges.

  6. Now this is a very simplistic view of crypto like the one I read on Money Mustache so let me break down the arguments.

    1. Quadriga was an unregulated exchange that collapsed but that has nothing to do with crypto. Comparing quadriga with crypto is like saying USD is useless because Lehman Brothers collapsed – a bad analogy. There are regulated exchanges out there Like Gemini so use them if you are not comfortable.

    2. Crypto has 3 major value propositions. (a) Web 3.0 protocols like EOS building decentralized versions of fakebook, uber etc. (b) Decentralized finance protocols like Ethereum building visa/PayPal/banking infrastructure. (C) Currency/Value protocols like Bitcoins aiming to replace Gold/USD as store of value/unit of account. The implications of all these are huge.

    3. And YES, they are an investment. Just as Internet 2.0 companies like YouTube, Instagram etc. turned the general population into content creators and publishers, crypto will turn people into micro investors. The tokenization of securities is also inevitable. Ans yes, people lose a lot of money because there will just be a lot more investors. Even 90% of traditional investors lose money so nothing out of the ordinary. You can always invest in a crypto index fund rather than trading it.

    In short, crypto is a massive opportunity (there is a reason Peter Thiel invested heavily in EOS), but you need to exactly know what you are doing. If you just want to passively invest, then simply buying Bitcoin and cold storing it is a good bet against MMM and the USD (which will be under a lot of pressure over the next decade)

    1. No, I’m not giving up on Bitcoin because of one bad exchange. I’m giving up on it because this exchange failure revealed a systemic flaw in the regulatory environment governing all exchanges.

      Quadriga claimed they were regulated by FINTRAC and that provided zero protection for its customers.

  7. This article is inaccurate in many places. Therefore you did the right thing because you should not invest in something you don’t understand.

    1. Incorrect. The more I understood it, the more I realized how dangerous it is.

      But based on your username, I think we know where you stand. Enjoy bankruptcy, my friend!

      1. It is cute you think you do, but you do not understand. Unlike you though, I wish you no ill will and I am glad you did not invest. This is not for you.

  8. I think you fell for the media fear mongering instead of getting your hands dirty and experiencing first hand for yourself. Cryptos currently are analogous to the early days of the Internet, even before it was introduced to the mass public. Think of it as Internet BEFORE even having friendly tools such as Mosaic or Netscape browsers or even established Internet protocol standards. It is early days and a bit of a Wild West mentality but with that in mind the early adopters, people using it now, will be tomorrow’s generational wealth.

    Even having the biggest crypto exchange blow up back then, Mt Gox, did not kill off bitcoin and it probably should have if it was some mania scam asset. But not only did it survive from that disaster, it rose from the ashes and established even higher breakthroughs. Despite the extremely brutal 2018 crypto bear market, there has been even bigger money globally investing into crypto mining machines and coins, which is quite bizarre if bitcoin was a complete scam. Yet venture capital and hedge funds continue to pour hundreds of millions of capital into bitcoin despite its decline of over 80% during the past 17 months.

    One of the largest financial stock institutions, Fidelity, will be unleashing crypto to institutional investors in mere weeks. Ameritrade/Etrade was recently discovered to offer a test bitcoin trading peer for retail investors.

    What do all these big institutions and big money see that you are not seeing?

    1. Yep. Fully agree. Wanderer is saying that one crappy exchange means that this whole new asset class is worthless. What? lol.

      Fidelity has 2+trillion assets under management and they are full steam ahead on crypto. Along with many other institutions.

      A deflationary(!), unconfiscateable store of value that can instantly and cheaply be transferred to anyone with a phone has massive value. Especially with banks printing money and every asset classes valuation being sky high.

      A small allocation to bitcoin has massive asymmetric upside reward potential.

      1. It’s not one crappy exchange. It’s one crappy exchange that revealed the systemic lack of regulation that exists in the entire industry. It’s the same reason I don’t touch accredited investment schemes. There’s nothing stopping them from lying to you, stealing your money, and you have no recourse.

        You want to trust your wealth to these people? Go right ahead. I’ll be sitting here eating my popcorn and laughing.

        1. There are plenty of fully regulated and even insured exchanges, kraken, coinbase, gemini and bittrex come to mind. Kraken and Bittrex service Canadians.

          Just wanting to point out that just because there are a few bad exchanges:

          1) doesn’t mean you can’t find and use high quality regulated and insured ones, and

          2) Even if the service infrastructure and regs around crypto are new, and some exchanges are crappy, doesn’t change the value of crypto itself one bit.

          In fact it makes it a more attractive opportunity because you are getting in while there is still some friction and risk. By the time you can buy crypto easily through your broker you’ll be paying many times more.

    2. Big institutions and big money can be run by arrogant and stupid fools who think they know better. Please open your eyes.

      Think about it this way. If your friends are jumping off a bridge, do you jump too? My answer is this: I’m not a lemming. Are you?

  9. Bitcoin is not anything like the Internet before Mosaic. The internet was basically a bulletin board for nerds working on government contracts so we could share large files. It was government sponsored, and limited to nerdy types with a need to know. Nothing at all like bitcoin and the perfect criminal scam — let them believe they can make millions and they’ll happily pour in their savings.
    Good summary of the con in this post.

    1. Laura,

      I 2nd you on that and agree with you. The internet back in the day was black background with green text. Originally intended for the US military to communicate and was known back then as an “intranet.”

  10. I don’t deal with Bitcoin at all. The Russians are suspected if emailing me and showing me a real password I use. Then they say they have a video of me at the PC doing something. And if I want them to keep quiet and not email everyone on my address list, send them $800+ via Bitcoin or crypto-currency. I never send them one dime in $ gUaP $. They trying to gip me!

    1. I suspect you may be joking, but the “here’s your password, send us money” emails are just a scam. There are no videos, these are just jerks who have e-mail and password combos that have been stolen from other websites. Anyone who receives e-mails like that should stop using the password in the e-mail as it is compromised.

      See the “Email Extortion Scam” section of the Canadian anti-fraud center for more details:
      http://www.antifraudcentre-centreantifraude.ca/fraud-escroquerie/types/extortion-extorsion/index-eng.htm#extortion

    2. @DNN I got one of those emails too, pretty much the exact same one but I knew it was bullshit because I don’t have a webcam.

        1. Should probably pick a better video title next time. Not sure “Mathing Shit Up” works for the target demograhic. Then again there are some dirty dirty people on there. 😉

  11. All fair points. However, they are not exclusive to crypto exchanges. Can it not be argued that fiat currencies, brokerages, and the entire fractional-reserve banking system could suffer from the type of corruption and risk that plagues crypto counterparts?

    1. Oh sure, fraud happens in the banking world too. But in the banking world, we’re protected by systems like the CDIC (deposit accounts) and CIPF (brokerage accounts) that reimburse us in case of bank/brokerage failure. I wouldn’t invest in ETFs either if I didn’t have those protections.

      1. This is too specific to countries like the USA where such government protections exist.

        It is definitely not the case in all countries.

        Also there are limits to such protections, a couple of hundred thousand US dollars for FDIC and same for SIPC, I believe. This makes them incomplete protections at best.

        Also, your overall argument seems to be that crypto exchange operators, or at least the way they are designed is the issue. Not crypto itself.

        The example you give is: “what if I send my crypto to an exchange without knowing its CEO died and it is now a deadend?”

        My proposition is: “can’t you proceed cautiously by sending and converting (to fiat) a small amount first, before making your large transfer to any exchange?”

  12. Honestly, it’s even worse than what’s written here. A bitcoin is just a hash, that’s it. ‘Bitcoin mining’ means using computing power to solve a complex problem to generate an answer. That answer is hashed and becomes a bitcoin.

    So … what happens if one day later someone else solves the exact same problem thereby getting the same hash, in other words the same bitcoin? The Blockchain, which is really just a ledger, has a record that says who claimed the hash first.

    Here’s the issue: the Blockchain is irreversible. All these thefts are really just someone, often an insider if it’s an exchange, copying the hashes. Once they have copied the hash they can transfer it out, thereby creating an entry on the Blockchain ledger that their copy of the hash is the ‘real’ one.

    Picture it as though a counterfeiter wasn’t just printing a $20 bill; they are printing a $20 bill with the exact same serial number as the $20 in your wallet. The bills look identical, there is no way to tell which is counterfeit. The counterfeiter just has to spend or transfer his copy of that serial numbered $20 bill before you do and your $20 becomes toilet paper.

    Bitcoin bugs like to claim that US dollars or European Euros or Korean Won or pick your currency are fiat and that is somehow bad. They seem to be forgetting that Bitcoin is also fiat; without the Blockchain ledger saying that their hash is the ‘real’ hash … it’s just a hash. No different than the hash of my Windows password really, or the MD5 hash that lets someone know a Word document wasn’t altered in transit. Hashes are great, but they’re not worth money in and of themselves.

    This is all assuming that a bitcoin hash even counts as money. At best “investing” in bitcoin is akin to “investing” in Yen, or Won, or Euros on the assumption that they will be worth more relative to another currency tomorrow. It’s forex, it’s day trading, it’s speculating.

    It is also assuming that bitcoin becomes the standard or a standard crypto currency going forward. Bitcoin is only the best known, it is far from the only one. Remember that the Blockchain technology itself is open source and freely available. It’s almost like trying to pick the dominant Linux distro back in the 1990s. Yes Linux was a great idea, but it was open source and you could have easily invested in a company pushing a distro that ultimately failed. Even then at least you would have been buying stock in a company, not buying a MD5 hash for a ISO of the distro.

    1. Sorta. You can fake a block on the blockchain, but that requires enough miners to agree with you and confirm it. Theoretically if you could take control of enough miners you could really do some damage, but I haven’t heard of anyone successfully pull this off yet. Have you?

      1. Ya’ll already mentioned the infamous case; Mt Gox. The media likes to use the term “theft”, but you can’t really steal something digital. You can copy it or move it. Depending on how that’s done the Blockchain would consider it no different than any other transfer. The Blockchain is irreversible, hence the Blockchain backs up the “thief”, “counterfeiter”, or ‘dude who copied my hash off Mt Gox’ whichever term makes the most sense to you.

        IMHO this “investment” is nothing but forex, but worse, since you can’t trust the logistics of the exchanges.

        I’m not against Blockchain itself though. That technology is interesting and could definitely have uses for things like contracts. It’s open source though. I’m not Warren Buffet, so I can’t predict what Blockchain might be used for in 10 years, let alone what company will make a fortune off using it. If you could predict Red Hat or SUSE LLC would do well back in the 1990s then maybe you can make money at bitcoin. Then again you could probably make money at forex or day trading.

      2. MD5? Fake a block? Do some damage?

        This is hilarious because it is so misinformed. Stay away from crypto, please.

        1. Yes MD5, as in “or the MD5 hash that lets someone know a Word document wasn’t altered in transit”. Bitcoin uses SHA-256, not MD5, but so what? A hash is only worth money if people believe it is.

          At any rate, I intend to stay away from bitcoin. I also stay away from gold, silver, other commodities, and forex.

  13. Enough about Bitcoin, you should take into consideration talking about XRP (Ripple)…

    I have to point out your ignorance when only speaking of Bitcoin when cryptocurrency is the topic. There are over 2000 cryptos.

    XRP is one of only a few crypto’s that’s regulated and it’s being adopted by banks internationally. Yes, banks.

    I don’t think people should be pouring their life savings into crypto, but I do believe it is an investment tool.

    Cold storage wallets are a necessity when buying crypto.

    1. BTC, BCH, LTC, XMR, they all have to be traded using the same untrustworthy exchanges. There’s nothing in XRP that convinces me it can sidestep this issue.

  14. Stick to a balanced and diversified ETF portfolio. Repeat again and again. Nothing else matters. Too many con artists out there trying to fleece you for your hard earned money. Say no to stupid.

  15. FYI, there are multiple times more good to great news about the rapid progresses and development made in the industry than the bad news known.

      1. Good to great news are actually made public pretty much every now and then. But you will need to drop the skepticism and negativity. I agree the industry is nascent and thus is very high risk for newbies. The biggest risks are getting hacked and investing in scam projects. I would strongly suggest Ethereum as a very long-term investment.

  16. Somehow don’t like your article. And I’m not pro crypto. But seems like you just scratch at the surface of the complexity it has, point out some “errors” in the exchange system, come up with more “could be like that”-thoughts and then in general advice the people following your blog to stay away from crypto and even to sell everything now. In your case I guess it’s really better to dump your cryptos and go back for FIAT, as already commented above. But this general advice is not what I expected here, sry.

    1. Manu he has stocks and bonds which is not fiat money but actual shares of a company which makes things. W is just saying you should not have a store of any type of “cash” buy something like a house, antiques, shares, bonds shit even horse just don’t hold “cash aka fiat or bitcoin etc” and pray for early retirement that way. The horse thing well you could breed more horses lol.

  17. A basic currency is essentially just a unit of measure that is convenient for exchanging goods, i.e. number of bitcoins, number of dollars, or number of bananas, that someone will trade me for an asset that I own. It’s just a pain to go to a cafe and ask to exchange a latte for a share in a company of the same measured value – it’s much easier to have a token (dollar, banana, or crypto coin) with a ‘worth’ of 1 unit of currency to act as an intermediary for ease of exchange. I don’t own crypto for the same reason that I don’t own more than a few thousand dollars, or a couple bananas, at any one time – currencies aren’t investments. As a means of exchange crypto has terrible properties – its volatile in price, hard to exchange fractional units, has long term inflationary problems (because there is a bounded number of coins) and difficult to simultaneously store safely and have easily on hand for exchange.

    For the people who cry about fiat currencies and big government, who cares if your unit of measurements are fiat currencies or bananas or whatever? None of which are inherently investments so there is no reason to own any more tokens of a currency than you need on hand for day to day exchanges. Own real investments and stop worrying about the units of measurement.

    1. Yup most money is digital. There is not enough paper for everyone, it’s just a tool to buy things. Money 101. The strange thing is that crypto’s use more energy than actual mining go figure.

  18. still confused over purchase costs ??

    i have a Questrade and a RBC DI account

    of course we all love Q because of the free ( almost free) fees to buy ETF’s

    however i also buy stocks for dividends

    and Q charges more … i tried to buy $4,000 worth and the fee with Q was $14

    but with RBC it was the standard $10

    am i doing something wrong or .. should i only use stocks in RBC ?

    ( recently i also told you that i was quoted $45 to sell some stocks in Questrade !! )

    which i didn’t because of the fee ..

    thanks

    1. Aye I just use TD at 9.99 per trade and only try to trade as little as possible. A wise person would only have a $100k or 2 in each account spread the risk. I shares or Vanguard VEQT or VXC total market indexes will lower the fees. $10 in and $10 out CIBC has 6.95 trades the cheapest about in canada.

  19. So funny with all the responses, there alot of either FOR Bitcoin and AGAINST Bitcoin.

    I just wanted to say The block chain technology technically doesn’t allow its record to be altered without alteration with all its subsequent block, so essentially it be impossible to alter it, nor would it allow another person to discover the same hash and take over the block. The technology behind Blockchain will not allow it.

    Blockchain technology is not Bitcoin, but Bitcoin does uses blockchain technology. There is some real and pretty advance technology behind blockchain technology, so its not just empty fluff.

    Bitcoin is the first…. its why it has so much leverage. However I think bitcoin investment is a very risky business right now. The government can go either way in how they tackle this issue and it can change everything depending on their policy, which is why bitcoin is really risky as an investment.

    With Fire in mind it makes no sense to invest in bitcoin as index eft are much more secure and you can attain it pretty much guaranteed.

    The whole science behind bitcoin really was not suppose to relay on exchanges to store bitcoin. Bitcoin is suppose to be decentralized and by storing bitcoin in exchanges it goes against it’s original purpose.

    In reality I think its fine to not touch bitcoin at all right now. It’s probably better to stay focus on index eft and when bitcoin does finally become more stable, at that point its still not too late to get in the game as the investment would reach a point where the investments should accelerated at an high amount to enter the bitcoin game when all the risk are gone. Right now bitcoin is very risky to invest…

    I just like to invest in cryptocurrency (noticed i did not say bitcoin specifically) cause I actually believe in the technology and its uses.

  20. While I’ve never been overly bearish on cryptocurrency, I’ve never seen any reason to put money into them other than because Botcoin/Litecoin/Dogecoin MIGHT go up in the same way your lottery number MIGHT come up.

    All of the arguments for buying crypto are honestly spotty at best.

    “It’s a store of value and protection from government fiat currency!”

    No it’s not. Gold and silver are stores of value and used to be currency because they have a finite amount on this Earth that no one could increase with a keystroke. The issue with fiat money is that the Federal Reserve/US Treasury can just print more and devalue the currency.

    What’s stopping the guy who invented Bitcoin from just making more Bitcoins? There’s no finite amount; it’s a digital currency that someone invented! It’s more fiat than “regular” fiat currency.

    “Cryptocurrency will be widely used in the future as traditional forms of payment become a thing of the past!”

    Eh……maybe? The thing is that those predicting a futuristic cashless society are really imaging digital payment solutions, not cryptocurrency. Credit/debit cards are digital payment solutions. PayPal, Stripe, Apple Pay are all digital payment solutions. But it’s the same currency.

    In the future when I go to my illicit cyberpunk android VR brothel and pay for my synthetic sex not via an RFID chip implanted in my arm aat the time I’m released from my gestation test tube, it’s just as likely that payment will still be in USD as it would be in Dogecoin.

    Don’t judge Future Me.

    “Cryptocurrency is a great investment!”

    “Investment” is a strong word.

    What you’re really doing is currency trading. It’s forex without the protections normally provided on a force exchange or the logistical roadblocks preventing a government from randomly expanding the money supply.

    Unlike stocks or real estate or gold where you own some asset, currency “investing” is just swapping out your money for a different money and hoping that what essentially amounts to a “glitch” occurs that erroneously results in you erroneously having more when you switch back to the original money.

    Anywhere else and that mistake would be corrected.

    “It’s anonymous! We can engage in commerce free from the prying eyes of tyrannical government!”

    Oh, no it’s not.

    Guys, I work in the Anti-Money Laundering field. While I don’t personally deal with anything crypto, I can tell you that all I ever hear and read when I follow AML news is how they are developing ways to detect illicit or suspicious transactions done with cryptocurrency. I’ve spoken to people at ACAMS meetings that work on tracing suspicious and potentially illicit crypto transactions back to the person who made it. Yeah, it’s HARDER to trace than a credit card transaction, but not impossible. It’s not physical cash.

    So CAN Bitcoin and cryptocurrency in general make you a ton of money? Maybe? CAN cryptocurrency become the great mainstream currency of the future? Sure?

    I see nothing to indicate any of this.

    And for all the people saying “Well, you just don’t understand cryptocurrency”, yeah, I don’t. Most people don’t. And that’s a strike against it becoming a mainstream currency. Gold and silver and even paper money would never have become widespread if they were complicated. Round metal discs and rectangular paper slips are not complicated, and “complicatrd” will keep people and businesses reluctant in using and accepting crypto as real money.

    Sincerely,
    ARB–Angry Retail Banker

  21. My husband was super into the Bitcoin/cryptocurrencies for a while, about two years ago. We had just moved to Canada from Scotland and had very few savings. It was amazing how addicted he became, as new cryptos were introduced pretty much every day. He would plow through articles and YouTube videos and pick cryptos based on those fairly biased pieces of information.
    It’s easy to see how seductive they are, though! He bought in relatively cheap, and within the first few days of putting money in he’d quadrupled his “investment”. It was recommended to him that he pull it all out quickly, which in some cases he did, but everything that he left in is now worthless.
    So much hype, so little payoff. If it weren’t so tragic to see some people lose everything (there was an article on the CBC about a couple that put their entire life savings into cryptos – they were in their 50s and were hoping it would allow them to retire sooner) it would be a fascinating real time study of market bubbles.
    John Oliver did a great evening segment about cryptos on Last Week Tonight, I highly recommend watching it!

  22. You’re all arguing with a guy who retired at 30. Laughing my head off. I have met one or two bitcoin retirees on my travels but they had investor packages way at the start. W is just telling you what he and many many others have actually done, not just a few insiders, put your bitcoin where your mouth is and let us know how you retired with a mil and we will take you seriously. Anything other than that is just shit talk for the sake of shit talk, wake the fuck up kids. Everyone here wants to learn but sometimes is just easier to be jealous “so sad, so sad” BIG T quotes.

  23. You should buy some bitcoin because it might eventually replace the Federal Reserve, and that’s worth the hedge.

  24. I do not want to invest in anything I don’t understand.

    I will leave you with this quote I use by famous investor Peter Lynch: Don’t invest in anything you can’t draw with a crayon.

    Have a great day!

  25. Like 90% of this post is ranting about exchanges. Sure the space needs to do better however regulation needs to also mature for this to happen. This is just a matter of time. If you’re trading crypto to crypto there are a number of ways to do this without third party risk for example taking advantage of atomic swaps or using something like shapeshift or a DEX. If you didn’t understand any of this part you need to do some more research. Get a hardware wallet, crypto wasn’t designed to be stored with third partys to begin with, it’s simply not needed but people are lazy. Lastly you don’t technically need to use an exchange to withdraw, all you need to do is find someone willing to buy your crypto for fiat and you can do a P2P transaction. There are events around the world where people get together to do this and if none of these options satisfy you then go for the exchange that’s passed the heaviest regulation around: gemini.com.

    Regarding the other notes. You’re falling into the trap in thinking that because the general term is cryptocurrencies that all serve as a currency and must therefore be it’s primary use, some do some don’t. The reality is money has many uses and Bitcoin has many interesting properties that make it useful like a long term store of value, a safe haven against inflation + political and economic instability with a predictable supply, consorship resistant form of money, easy borderless payments across the globe etc. Bitcoins low correlation to other markets really helps to diversify the portfolio. For example May was a pretty bad month for peoples stock portfolio however Bitcoin really saved my portfolio this month.

    I will part with this note: Bitcoin is unforgiving to those that reject it so I hope you are certain about the choice you’ve made. To bet against Bitcoin is to bet against math and the past 10 years has proven this as the best performing asset in any market which is not something to understate. Once you really understand the tech you’ll realise it’s next to impossible for Bitcoin to die.

  26. I don’t understand the point of this guy.
    He is clearly not informed about Crypto but at the same time he is trying to convince everyone not to invest in it.
    Yes, I turned 30k into 13k (some months ago it was even less) but that was just a normal crash of the market. It’s not because of that that I no longer believe in crypto.

    Like it or not Crypto is the future. Even if you don’t believe in it, it is already a reality in many areas. Not investing because of the reasons you listed here, is like not having a computer because there are virus and hackers left and right….

    Read. Inform yourself. Stop spreading the panic. You look like a fool.

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