Advice for a beginner please?

[theBishop]

This is total minefield and Im definitely outside comfort zone but Ive been advised this section is where I should really start quest to hit target of making 100 Bitcoins by the end of 2014.  Have a little inheritance money to spend and am student whos failed miserably to mine alt cryptos on pretty powerful laptop.  I have read the White Paper and am so convinced by its offerings and in order to become a part of this emergent technology know that ownership is key to placing myself in the middle of where I want to be.  Ive been warned about watching out for scams and happy to trust my own research ability as thats where I feel comfortable however just want to politely ask if anyone would be happy to offer guidance?  I will buy and hold of course but want to invest a small percentage in high risk venture.  My room mate told me about Asic Miner because they will go back up in price and he said KNC could be a good investment because they sell plenty of hardware.  I know not to buy miners myself because of the gold rush analogy of picks and spades but can I ask apart from actually buying shares are there any other ways invest?  Cloud hashing makes me nervous but I dont totally understand that one but am happy to read up.  Thanks guys and sorry to waste your time if you are too busy to reply and had to read all that.

[1715294969]

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[BitHub]

bitcoin securites is a good way to turn 100 btc into 1 btc, i wouldn't bother, its dead.

[theBishop]

How so?  I understand markets go up and down and would love to understand the origin of such a bleak opinion.

[DoloresHazed]

How so?  I understand markets go up and down and would love to understand to origin of such a bleak opinion.

Look at it like this:  Let's say the price (in dollars) of a real estate property we have invested in doubles in one year.  So we should be doing pretty good if we flip it, right?  Well, not if we invested bitcoin, the price of which (again, in dollars) quadrupled in a year.  if we flip this house, we'll actually lose money.

Then there's the empirical approach -- how is the market doin'?  Well, if we take Havelock exchange, which is doing pretty good by virtue of it still not being shut down/getting "hacked" *cough*, you will see that every "security" listed there is trading below IPO.

This doesn't mean you can't do some clever trading, but you have to be ... well, you wouldn't be asking.
If you believe in bitcoin -- buy, hold, and get rich.  Forget securities.

[railzand]

nonononononono not here

sell trinkets, crafts, collectables on web for btc

advise local businesses how to accept btc, turn your town into the first btc town

buy antminer usbs and sell for tiny mark up on ebay

what is your comfort zone? what are you really good at?

read round everything in my sig, but don't buy anything yet

[theBishop]

Obviously I wont divulge figures but Im good at analysis thats my forte. I totally understand about contributing to the community but before I can do so I must become a part of it which is what Im trying.  Im not sure I understand the concept of flipping real estate but will read up on that.  If I can invest xbtc and make 2xbtc in y time then have I not doubled my holdings in btc regardless of fiat valuation?  It goes without saying your advice suggests such a return is unachievable right now.  Its starting to look as though Ive missed the boat and perhaps I should just stick buying and holding btc which Im more than happy to do just had a dream that I could buy shares and watch their value soar.

[aquarius]

The only security in here that I believe have enough upside to invest in is ActiveMining that will both produce it's own mining equipment to sell and also mine with. They are in chip production now and the shipping of miners will start very soon.

I am also keeping an eye on Peta-Mine but unlike ActiveMining or ASICMiner they do not make their own mining equipment.

But do your own research and don't trust anyone that says that they definitely know either or..

[AccountManagement]

Obviously I wont divulge figures but Im good at analysis thats my forte. I totally understand about contributing to the community but before I can do so I must become a part of it which is what Im trying.  Im not sure I understand the concept of flipping real estate but will read up on that.  If I can invest xbtc and make 2xbtc in y time then have I not doubled my holdings in btc regardless of fiat valuation?  It goes without saying your advice suggests such a return is unachievable right now.  Its starting to look as though Ive missed the boat and perhaps I should just stick buying and holding btc which Im more than happy to do just had a dream that I could buy shares and watch their value soar.

Forget real estate, let's talk widgets.
Imagine a widget that is selling today for one dollar.  You know that this widget will be worth two dollars in a year's time.  The widget is an excellent investment, offering you 100% ROI.  You invest one dollar and get two dollars back in a year's time.

Now imagine that you bought the same widget with bitcoin, which appreciates by 300% per year (it's doing better than that now, but let's be conservative).  Let's assume, just for the sake of simplifying the math, that at the time you invest, 1BTC=$1.  You buy your widget for 1 BTC, and in a year's time it appreciates -- it is worth $2.  But at the same time, BTC value has quadrupled, so when you sell the widget, you get 0.5BTC.  You have *lost* half of your bitcoin.

[twentyseventy]

Obviously I wont divulge figures but Im good at analysis thats my forte. I totally understand about contributing to the community but before I can do so I must become a part of it which is what Im trying.  Im not sure I understand the concept of flipping real estate but will read up on that.  If I can invest xbtc and make 2xbtc in y time then have I not doubled my holdings in btc regardless of fiat valuation?  It goes without saying your advice suggests such a return is unachievable right now.  Its starting to look as though Ive missed the boat and perhaps I should just stick buying and holding btc which Im more than happy to do just had a dream that I could buy shares and watch their value soar.

Forget real estate, let's talk widgets.
Imagine a widget that is selling today for one dollar.  You know that this widget will be worth two dollars in a year's time.  The widget is an excellent investment, offering you 100% ROI.  You invest one dollar and get two dollars back in a year's time.

Now imagine that you bought the same widget with bitcoin, which appreciates by 300% per year (it's doing better than that now, but let's be conservative).  Let's assume, just for the sake of simplifying the math, that at the time you invest, 1BTC=$1.  You buy your widget for 1 BTC, and in a year's time it appreciates -- it is worth $2.  But at the same time, BTC value has quadrupled, so when you sell the widget, you get 0.5BTC.  You have *lost* half of your bitcoin.

This is a definite concern with BTC investments that pay dividends in USD converted to BTC. Once you have some BTC denominated investments, it's not a bad idea to include some fiat dividend investments as a hedge against a falling USD/BTC rate. For a beginner though, yes, it's a good idea to take this risk into account.

[AccountManagement]

Obviously I wont divulge figures but Im good at analysis thats my forte. I totally understand about contributing to the community but before I can do so I must become a part of it which is what Im trying.  Im not sure I understand the concept of flipping real estate but will read up on that.  If I can invest xbtc and make 2xbtc in y time then have I not doubled my holdings in btc regardless of fiat valuation?  It goes without saying your advice suggests such a return is unachievable right now.  Its starting to look as though Ive missed the boat and perhaps I should just stick buying and holding btc which Im more than happy to do just had a dream that I could buy shares and watch their value soar.

Forget real estate, let's talk widgets.
Imagine a widget that is selling today for one dollar.  You know that this widget will be worth two dollars in a year's time.  The widget is an excellent investment, offering you 100% ROI.  You invest one dollar and get two dollars back in a year's time.

Now imagine that you bought the same widget with bitcoin, which appreciates by 300% per year (it's doing better than that now, but let's be conservative).  Let's assume, just for the sake of simplifying the math, that at the time you invest, 1BTC=$1.  You buy your widget for 1 BTC, and in a year's time it appreciates -- it is worth $2.  But at the same time, BTC value has quadrupled, so when you sell the widget, you get 0.5BTC.  You have *lost* half of your bitcoin.

This is a definite concern with BTC investments that pay dividends in USD converted to BTC. Once you have some BTC denominated investments, it's not a bad idea to include some fiat dividend investments as a hedge against a falling USD/BTC rate. For a beginner though, yes, it's a good idea to take this risk into account.

This could be simplified to "BTC investments make sense only when the underlying asset appreciates at a greater rate than BTC itself."  BTC is the unit of account here, so any investment has to appreciate more rapidly than bitcoin itself to show a profit.  Betting that anything appreciates faster than bitcoin is currently a sucker's bet.

It's irrelevant what the dividends are paid in -- bitcoin or fiat.  Profiting in fiat will happen at the same rate, regardless of what the dividends are paid in -- dollars, BTC or vestal virgins.  If you have invested 1BTC when it was worth $10 and now your investment is worth $100, you have lost $776 dollars.  Paying dividends in fiat is not hedging, unless the money invested was also fiat.

Of course, if BTC tanks, this reasoning gets reversed.
TL;DR:  By investing BTC into any enterprise with fiat exposure, you are simply divesting from BTC.

[ryan1894]

Look at it like this:  Let's say the price (in dollars) of a real estate property we have invested in doubles in one year.  So we should be doing pretty good if we flip it, right?  Well, not if we invested bitcoin, the price of which (again, in dollars) quadrupled in a year.  if we flip this house, we'll actually lose money.

This is the most confused statement I've read today.

If your house is denominated in BTC, and it doubles in price, and BTC quadruples in a year, then clearly investing in the house has 8x the original price of the house.

The problem is that bitcoin securities have halved, where bitcoin has 5x in the last couple months or so...since the btct.co shutdown

[DoloresHazed]

Look at it like this:  Let's say the price (in dollars) of a real estate property we have invested in doubles in one year.  So we should be doing pretty good if we flip it, right?  Well, not if we invested bitcoin, the price of which (again, in dollars) quadrupled in a year.  if we flip this house, we'll actually lose money.

This is the most confused statement I've read today.

If your house is denominated in BTC, and it doubles in price, and BTC quadruples in a year, then clearly investing in the house has 8x the original price of the house.
...

First read the boldface font.
Then read the red font.

Now ask yourself: "Why am I reading this confusing forum when I should be learning shapes and colors before I have to start digging ditches?"

[Duffer1]

PMd you.