Former Harvard Money Manager Is Launching a Digital-Currency Hedge Fund(bloomberg.com)
bloomberg.com
Former Harvard Money Manager Is Launching a Digital-Currency Hedge Fund
https://www.bloomberg.com/news/articles/2017-08-17/ex-harvard-money-manager-is-said-to-launch-digital-currency-fund
108 comments
> The fund, which is registered in the Cayman Islands
Probably because of the beaches, pina coladas and what not, riteguise?
Probably because of the beaches, pina coladas and what not, riteguise?
Hedge fund guy here.
Every hedge fund is registered in some obscure offshore location. Don't confuse that with where it's managed from.
The reason is tax related. The investors don't want a tax bill dependent on some complicated local regime, and you want investors from different countries. That doesn't mean there's never any tax paid, it the company that "advises" or manages the fund will still be based in a well known financial centre like NYC or London, and will pay all the same corporate and employment related taxes that any other firm pays. The 2/20 fee goes to this management firm. And when the investors bring their money back into their jurisdiction, they pay according to whatever the capital gains regime that's relevant.
Every hedge fund is registered in some obscure offshore location. Don't confuse that with where it's managed from.
The reason is tax related. The investors don't want a tax bill dependent on some complicated local regime, and you want investors from different countries. That doesn't mean there's never any tax paid, it the company that "advises" or manages the fund will still be based in a well known financial centre like NYC or London, and will pay all the same corporate and employment related taxes that any other firm pays. The 2/20 fee goes to this management firm. And when the investors bring their money back into their jurisdiction, they pay according to whatever the capital gains regime that's relevant.
I think that's exactly what the joke was about...
He heavily implied there was some sort of illegitimate reason behind it. There isn't.
I would argue avoiding taxes from the country where the fund is managed is a bit illegitimate.
That's what I just explained doesn't happen.
So the fund is managed in the Caymen Islands?
No, it isn't. The people who decide what the fund buys and sells are in London, NYC, Zurich, etc. They pay taxes according to where they are.
The fund vehicle is in the Caymans / Bermuda / IoM etc.
The fund vehicle is in the Caymans / Bermuda / IoM etc.
Why aren't they based in NYC or London then?
https://www.quora.com/How-are-hedge-funds-structured-so-that...
https://panamapapers.icij.org/
http://www.alternet.org/story/150904/7_ways_hedge_funds_lie%...
https://www.quora.com/How-are-hedge-funds-structured-so-that...
https://panamapapers.icij.org/
http://www.alternet.org/story/150904/7_ways_hedge_funds_lie%...
Read what I wrote. The management company is based in London, the fund that holds the investments is based in the Caymans.
There's nothing in your links that contributes to this discussion.
There's nothing in your links that contributes to this discussion.
You avoid taxes every time you take a deduction.
[deleted]
If people want to start this fund in the US, I think the bigger question is it's not completely clear what the taxes are and how they work for cryptocurrencies, etc. In this case while Cayman tax rates are highly favorable, it's not clear how much of a factor that is, and how much of a factor just not knowing which instruments count as which type of investment and what the taxes actually are is. If you pay out to your clients then find out one investment was misclassified because of later regulatory clarification then you can easily end up having failed to withhold millions of dollars with severe legal consequences. Very few of the people moving money to the Cayman pay $0 in taxes because returning the money to the US is subject to tax events and it takes very complicated legal structures like those in Ireland or Netherlands to get money in the Cayman to not be double taxed since the US and Cayman don't actually have a tax treaty.
This is also why U.S. companies like to incorporate in Delaware – it's not that the laws and regulations are favorable, it's that the laws and regulations are well known and predictable.
Hey, if this catches on, it could be the next great economic collapse!
Probably because of the favourable taxation jurisdiction. Capital is very mobile and not there's usually not a strong reason to keep it in high tax jurisdictions if it's possible to move it out.
Of course, it should have been taxed when it was earned by investors. And it will be taxed again when investors receive and domesticate any dividends. That part is the dodgy tax dodging issue. Not the issue of where the fund is based.
Of course, it should have been taxed when it was earned by investors. And it will be taxed again when investors receive and domesticate any dividends. That part is the dodgy tax dodging issue. Not the issue of where the fund is based.
You don't say?!
> Probably because of the favourable taxation jurisdiction.
He already wrote that (that's why the sarcasm).
He already wrote that (that's why the sarcasm).
I'm well aware of Cayman Islands taxes.
> Capital is very mobile and not there's usually not a strong reason to keep it in high tax jurisdictions if it's possible to move it out.
They are exploiting a loop hole.
> Capital is very mobile and not there's usually not a strong reason to keep it in high tax jurisdictions if it's possible to move it out.
They are exploiting a loop hole.
From the perspective of taxpayers, having nations compete for the lowest taxes and most friendly regulatory environment is beneficial. If there were a global territorial monopoly on the production of security and rule of law, you would likely find yourself with a lower quality of life.
Heavily disagree. Having nations compete for the lowest taxes allows only the wealthiest (because middle class people, or just generally those receiving a wage, cannot just choose to make their money in a tax haven) to evade taxes while enjoying all the social institutions and political settings from the original country they come from.
I'm not advocating capital controls, but it doesn't make sense for us to allow people that by all means actually live and work in the US to set up a business elsewhere to avoid taxes. Because if tax havens were not allowed to exist, they would still set up in the US/UK/whatever, but would actually pay fair amounts of taxes.
I'm not advocating capital controls, but it doesn't make sense for us to allow people that by all means actually live and work in the US to set up a business elsewhere to avoid taxes. Because if tax havens were not allowed to exist, they would still set up in the US/UK/whatever, but would actually pay fair amounts of taxes.
Read the comment up thread about how these are structured. The country that the investor is based in still taxes the money coming out of the fund. The fund operations still pay US taxes on all of the management fees that come from the fund.
Putting the fund in the islands just avoids having to deal with all of the work of getting exemptions for the money going to the foreign investors.
I suggest that you spend some time actually researching why these things are done before commenting based on a preconceived notion learned from popular media.
Putting the fund in the islands just avoids having to deal with all of the work of getting exemptions for the money going to the foreign investors.
I suggest that you spend some time actually researching why these things are done before commenting based on a preconceived notion learned from popular media.
Avoid, not evade. Big difference. And generally those structures only allow you to defer tax, not avoid all tax. Yes, having $10m sitting in a bank account of some corporate structure is obviously better than not having any money at all, but it's still money that has restrictions attached to it -- can't just go and spend it all.
Generally, if you want to bring that back, you will at least have to pay some sort of capital gains or dividend tax on that.
Second, pure tax havens (such as Jersey and the Cayman Islands) are one thing. But pretty much every developed nation has special tax incentives that exist in their tax code to attract investment. And it is obvious why they do it.
If we use Luxembourg as an example, which is generally a favourable holding and fund location, what can they offer? They are a small country with no natural resources. Smaller nations need to live off of intellectual capacity, meaning: outsmarting others.
There are various approaches (Singapore, Channel Islands, Luxembourg) to that, but ultimately, if you want to attract investment and tax revenue, offering an attracting tax system seems like a great way to do it.
I don't see the world introducing a globalised 20% corporate tax rate any time soon, for example.
Generally, if you want to bring that back, you will at least have to pay some sort of capital gains or dividend tax on that.
Second, pure tax havens (such as Jersey and the Cayman Islands) are one thing. But pretty much every developed nation has special tax incentives that exist in their tax code to attract investment. And it is obvious why they do it.
If we use Luxembourg as an example, which is generally a favourable holding and fund location, what can they offer? They are a small country with no natural resources. Smaller nations need to live off of intellectual capacity, meaning: outsmarting others.
There are various approaches (Singapore, Channel Islands, Luxembourg) to that, but ultimately, if you want to attract investment and tax revenue, offering an attracting tax system seems like a great way to do it.
I don't see the world introducing a globalised 20% corporate tax rate any time soon, for example.
The problem is that I (and possibly you idk) can't decide to start paying taxes in Cayman islands while still residing in the US. Why should a hedge fund be allowed to do that? Why should a hedge fund that takes advantage of the US social structure (funded by taxes) be allowed to not pay taxes in the US?
The fund doesn't benefit from the US social structure. The fund is just a legal fence around a bunch of assets.
The investors in the fund are obliged to pay taxes on their income/gains in their relevant taxation jurisdiction, which will be the US for US investors and elsewhere for non-US investors.
The investors in the fund are obliged to pay taxes on their income/gains in their relevant taxation jurisdiction, which will be the US for US investors and elsewhere for non-US investors.
>The fund doesn't benefit from the US social structure. The fund is just a legal fence around a bunch of assets.
The recent SEC decision on Ethereum ICO's made it clear at least the legal part of the social structure still applies. The normal tax setup isn't really setup to do this though as the same also applies to all the other countries the fund would want to sell to. A tax on the fund transactions with citizens of each country would probably be a better way to pay for the SEC and other regulatory and legal services in each country.
The recent SEC decision on Ethereum ICO's made it clear at least the legal part of the social structure still applies. The normal tax setup isn't really setup to do this though as the same also applies to all the other countries the fund would want to sell to. A tax on the fund transactions with citizens of each country would probably be a better way to pay for the SEC and other regulatory and legal services in each country.
>A tax on the fund transactions with citizens of each country would probably be a better way to pay for the SEC and other regulatory and legal services in each country
This is effectively how things already work. Sale of investment products is generally highly regulated in most countries by a domestic regulator and most of those also implement transaction taxes[1].
In effect, the taxation to fund regulation is done at the destination, not the source, which makes sense given that the regulator is typically protecting the investors located in the same jurisdiction.
In the US for example (since this discussion seems to be about the US despite the fact that fund being discussed appears to have nothing to do with the US):
Currently, the US imposes a $0.0042 round-trip transaction tax on security futures transactions and $21.80 per million dollars for securities transactions.[63] The tax, known as Section 31 fee, is used to support the operation costs of the Securities and Exchange Commission (SEC)"
[1] https://en.wikipedia.org/wiki/Financial_transaction_tax
This is effectively how things already work. Sale of investment products is generally highly regulated in most countries by a domestic regulator and most of those also implement transaction taxes[1].
In effect, the taxation to fund regulation is done at the destination, not the source, which makes sense given that the regulator is typically protecting the investors located in the same jurisdiction.
In the US for example (since this discussion seems to be about the US despite the fact that fund being discussed appears to have nothing to do with the US):
Currently, the US imposes a $0.0042 round-trip transaction tax on security futures transactions and $21.80 per million dollars for securities transactions.[63] The tax, known as Section 31 fee, is used to support the operation costs of the Securities and Exchange Commission (SEC)"
[1] https://en.wikipedia.org/wiki/Financial_transaction_tax
It's benefiting from the US structure indirectly. Investors into the fund are definitely benefiting from the US social structure and hence the fund is also benefiting.
I can also imagine that the fund has some US legal protection (don't quote me on that).
> The investors in the fund are obliged to pay taxes on their income/gains in their relevant taxation jurisdiction, which will be the US for US investors and elsewhere for non-US investors.
So why is the fund getting a pass?
I can also imagine that the fund has some US legal protection (don't quote me on that).
> The investors in the fund are obliged to pay taxes on their income/gains in their relevant taxation jurisdiction, which will be the US for US investors and elsewhere for non-US investors.
So why is the fund getting a pass?
Investors into the fund are definitely benefiting from the US social structure and hence the fund is also benefiting.
Fine. When will you start paying taxes to Greece and Italy for essentially inventing the core civilizational structure the West is based on?
Fine. When will you start paying taxes to Greece and Italy for essentially inventing the core civilizational structure the West is based on?
> paying taxes to Greece and Italy
Haha, the EU is paying them more than enough already.
Haha, the EU is paying them more than enough already.
[deleted]
"It's benefiting from the US structure indirectly. Investors into the fund are definitely benefiting from the US social structure and hence the fund is also benefiting."
So, have you been paying your taxes to Germany, Canada, the UK, and the rest of the world?
So, have you been paying your taxes to Germany, Canada, the UK, and the rest of the world?
No, because the fund has a choice of being established in US or Cayman Islands. Not, Germany, Canada, UK.
I'm talking about you.
You said the fund should pay taxes to the US because it "indirectly benefits from the US social structure".
By that logic, you should be paying taxes to all the countries whose "social structure" you indirectly benefit from.
You said the fund should pay taxes to the US because it "indirectly benefits from the US social structure".
By that logic, you should be paying taxes to all the countries whose "social structure" you indirectly benefit from.
>the fund has a choice of being established in US or Cayman Islands. Not, Germany, Canada, UK.
Why? As far as I can see, two people who are neither US citizens nor US residents are setting up a Cayman fund. What exactly does this have to do with the US?
Why? As far as I can see, two people who are neither US citizens nor US residents are setting up a Cayman fund. What exactly does this have to do with the US?
OK my mistake, I didn't realize they were from the UK. Replace US with UK and my comments still apply.
The fund could be funded by wealthy families in, say, Monaco and Saudi Arabia. The investors shouldn't have to pay US taxes just because the fund manager is US based. It makes sense they pay local taxes (even if they are nil) on their gains. The fund manager, however, probably should pay US tax (on any of his profits).
The employees of the fund, who reside in the US presumably, will be taxed on the income they earn from the fund. Why should they be taxed twice?
Google & Apple, etc play the same jurisdictional tricks, as do pretty much all multinational firms.
Google & Apple, etc play the same jurisdictional tricks, as do pretty much all multinational firms.
> The employees of the fund, who reside in the US presumably, will be taxed on the income they earn from the fund. Why should they be taxed twice?
Why should it be the employees getting taxed and not the corporation? I might get taxed more than twice. Federal income tax, state income tax, sales tax, capital income tax, why should a corporation get a pass? I also don't think that it's getting taxed twice as they are different taxes.
> Google & Apple, etc play the same jurisdictional tricks, as do pretty much all multinational firms.
Why are you assuming that I condone that?
Why should it be the employees getting taxed and not the corporation? I might get taxed more than twice. Federal income tax, state income tax, sales tax, capital income tax, why should a corporation get a pass? I also don't think that it's getting taxed twice as they are different taxes.
> Google & Apple, etc play the same jurisdictional tricks, as do pretty much all multinational firms.
Why are you assuming that I condone that?
>Why should it be the employees getting taxed and not the corporation?
I think you are confusing the fund with the mangement company.
An asset manager is a company that manages assets for investors and charges fees. They have employees and offices and profits and pay taxes. Fidelity's parent for example is a US based LLC.
An asset manger like this runs many funds on behalf of investors. For each investment fund, they setup a fund to legally ring fence the assets for that particular fund, which they manage on behalf of the fund's investors. This protects the investors and maintains separations of the assets. If the management company went bankrupt, the funds themselves are unaffected (aside from needing a new manager).
The fund itself has no employees, it's just a method of legally separating out those assets.
I would also point out that this particular case has nothing to do with the US. The manager in question is not a US citizen or resident and I would be extremely surprised if the management company was being setup there.
I think you are confusing the fund with the mangement company.
An asset manager is a company that manages assets for investors and charges fees. They have employees and offices and profits and pay taxes. Fidelity's parent for example is a US based LLC.
An asset manger like this runs many funds on behalf of investors. For each investment fund, they setup a fund to legally ring fence the assets for that particular fund, which they manage on behalf of the fund's investors. This protects the investors and maintains separations of the assets. If the management company went bankrupt, the funds themselves are unaffected (aside from needing a new manager).
The fund itself has no employees, it's just a method of legally separating out those assets.
I would also point out that this particular case has nothing to do with the US. The manager in question is not a US citizen or resident and I would be extremely surprised if the management company was being setup there.
I'm not confusing it. You didn't answer the main question, why is it establishes in Cayman Islands? To avoid taxes. That's the end of it.
"That's the end of it" isn't really a solid argument.
Various reasons: 1) to segregate assets, 2) because certain regulators will apply restrictions on certain security actions (one example: it seems the Belgian regulator has barred investors from borrowing against their stock holdings for most purposes, but this is possible with a US broker, even for Belgians, without restriction), 3) to stop double taxation which would be bad for global investment (e.g. some pension funds are tax exempt under local law), and 4) because investor A living in country B doesn't want to pay taxes in country C, he wants to pay taxes in country B under the laws he knows and understands.
Imagine living in Greece, and then having to figure out the entire tax system of Spain. In a foreign language. It would probably be too complex to bother (and thus you wouldn't invest) or it would be an expensive undertaking (lawyers etc) eating into your returns.
Investing in a CaymanCo is generally easy -- you don't pay tax at the entity level, you pay tax in your personal entity. Clean, easy, and you can ride off on your boat into the sunset.
Various reasons: 1) to segregate assets, 2) because certain regulators will apply restrictions on certain security actions (one example: it seems the Belgian regulator has barred investors from borrowing against their stock holdings for most purposes, but this is possible with a US broker, even for Belgians, without restriction), 3) to stop double taxation which would be bad for global investment (e.g. some pension funds are tax exempt under local law), and 4) because investor A living in country B doesn't want to pay taxes in country C, he wants to pay taxes in country B under the laws he knows and understands.
Imagine living in Greece, and then having to figure out the entire tax system of Spain. In a foreign language. It would probably be too complex to bother (and thus you wouldn't invest) or it would be an expensive undertaking (lawyers etc) eating into your returns.
Investing in a CaymanCo is generally easy -- you don't pay tax at the entity level, you pay tax in your personal entity. Clean, easy, and you can ride off on your boat into the sunset.
There are other reasons to do so (unethical but who is to say it's not part of the thinking ...). Foreign assets are also significantly harder to apply many kinds of financial regulations to from other countries. If this fund is a Ponzi scheme for example, then the foreign transaction boundaries can prevent (or severely complicate) federal jurisdictions from clawing back profits (for the early investors who might have net profit). Normally - any investor with profitable returns from a Ponzi scheme will have their gains clawed back to pay restitution for the losses of investors who got scammed.
You are being deliberately obtuse though. As others have explained, the fund entity is setup in the Caymans to provide tax neutral position on the funds under management (and legal separation from the management entity). The management entity will pay tax in the jurisdiction its a tax resident, as will investors in the fund when any dividends are distributed/capital gain is realised.
Avoiding taxes is not unethical in itself, or do you also denounce people who claim any tax deductions?
The question is: why is the US entitled to these taxes, such that avoiding them becomes unethical?
The question is: why is the US entitled to these taxes, such that avoiding them becomes unethical?
> Avoiding taxes is not unethical in itself, or do you also denounce people who claim any tax deductions?
False equivalence. You can deduce anything that's used to generate the profit. This makes sense.
> The question is: why is the US entitled to these taxes, such that avoiding them becomes unethical?
The answer to this question is the same as the answer to the question "why is the US entitled to taxes".
False equivalence. You can deduce anything that's used to generate the profit. This makes sense.
> The question is: why is the US entitled to these taxes, such that avoiding them becomes unethical?
The answer to this question is the same as the answer to the question "why is the US entitled to taxes".
You can generally also deduct charity payments to your own "land conservation" charity, which can then go ahead and buy 50 acres of land around your recently built mansion.
Pretty sure you wouldn't consider that one one that makes sense.
Plenty of deductions exist for a reason, and generating profits isn't always one of them.
Pretty sure you wouldn't consider that one one that makes sense.
Plenty of deductions exist for a reason, and generating profits isn't always one of them.
>Why should a hedge fund that takes advantage of the US social structure (funded by taxes) be allowed to not pay taxes in the US?
You seem to have a very US-centered view of the world. To those of us who don't live in the US, it comes across as bizarre.
"Takes advantage of the US social structure" is so vague as to be practically meaningless, and could be extended to almost any developed economy.
Not all of us owe Uncle Sam, you know.
You seem to have a very US-centered view of the world. To those of us who don't live in the US, it comes across as bizarre.
"Takes advantage of the US social structure" is so vague as to be practically meaningless, and could be extended to almost any developed economy.
Not all of us owe Uncle Sam, you know.
I'm not American. It's not so much about the US as about the country where they do business which I assumed was the US.
>From the perspective of taxpayers, having nations compete for the lowest taxes and most friendly regulatory environment is beneficial.
If the gains in lower taxes are done by playing states off each other (see Google in Ireland) or the regulatory gains are done by allowing dirtier production of the same goods elsewhere (usual China vs the West discussion) then for the vast majority of tax payers it is a loss. The taxes and regulations that apply to them individually don't change while their states have less tax revenue to provide services and the environment they live in is worse off.
>If there were a global territorial monopoly on the production of security and rule of law, you would likely find yourself with a lower quality of life.
I'd bet the opposite would be true. All those lawyers and accountants that Google employs to shift their tax burden between countries could be reallocated to doing something productive. The pressure to lower taxes is already high enough within a single state that the loss in pressure from lack of competition between states would probably be irrelevant.
If the gains in lower taxes are done by playing states off each other (see Google in Ireland) or the regulatory gains are done by allowing dirtier production of the same goods elsewhere (usual China vs the West discussion) then for the vast majority of tax payers it is a loss. The taxes and regulations that apply to them individually don't change while their states have less tax revenue to provide services and the environment they live in is worse off.
>If there were a global territorial monopoly on the production of security and rule of law, you would likely find yourself with a lower quality of life.
I'd bet the opposite would be true. All those lawyers and accountants that Google employs to shift their tax burden between countries could be reallocated to doing something productive. The pressure to lower taxes is already high enough within a single state that the loss in pressure from lack of competition between states would probably be irrelevant.
Oh for sure, all those lawyers would probably instead be lobbyists meeting with officials from the one world government for beneficial policies -- a clearly uncorruptible and very noble situation which would be highly sensitive to my one vote as a global citizen.
Awesome I am Automatic made dead
Awesome I am Automatic made dead
Someone might exploit a loophole but it's not based on where the rows in the database are legally claimed to reside. The tax dodging has two main flavours afact: refusing to domesticate profits so it's stuck in limbo (this is what apple is doing in Ireland) and moving money into structures where people pretend they don't own it (owning offshore companies who own London property (UK MPs do this) or having a subsidiary 'pay' for use of a corporate brand so it's marked as an expense in a high tax jurisdiction and the tax is paid (maybe) in a low tax jurisdiction (Starbucks does this)).
The fund being in the Cayman islands in it's own isn't a tax loophole.
The fund being in the Cayman islands in it's own isn't a tax loophole.
Why is it established there then?
And also, why is this even a thing? Why doesn't everyone setup a business in the Cayman islands?
More likely because, when you are raising capital from various sources across the world (e.g. a pension fund in the US, a wealthy entrepreneur from London and a family office from Monaco) you don't want to impose unnecessary US taxes on them, just because the fund manager lives in the US. They will pay their tax in their own holding structure, where (and if) it is due.
Or maybe because some non-taxable US-based investors only invest in offshore vehicles.
It's also offshore b/c non-US ICO's don't want exposure to "SEC risk" due to taking money from US investors. The fund will lose potential deal flow if it's US-based. This is a concern in the industry right now.
It's not in the USA because of that. But it's in the UK because they don't prosecute any financial crimes.
Digital currencies like M-Pesa & Paypal?...
Oh, no he seems to be buying crypto assets; which have value because they're decentralised. Silly me. I was confused by the author being confused.
Edit: if you're downvoting me for this comment then you don't know what you're talking about. Happy to debate!
Edit2: seriously, there's a distinction to be made. One is a censorship resist asset (which is why the trade-off of greater resources is made) & the other isn't.
Edit3: explain to me why that isn't true & I'll change my position!
Oh, no he seems to be buying crypto assets; which have value because they're decentralised. Silly me. I was confused by the author being confused.
Edit: if you're downvoting me for this comment then you don't know what you're talking about. Happy to debate!
Edit2: seriously, there's a distinction to be made. One is a censorship resist asset (which is why the trade-off of greater resources is made) & the other isn't.
Edit3: explain to me why that isn't true & I'll change my position!
delazeur(2)
This poster is correct, albeit not for his reasons. I speculate in digital currencies (or rather their exchange rates) and there is a fine difference.
Digital currency is an all encompassing term for any money that solely exists electronically. Example: Money deposited into a bank account is digital currency. Investing into digital currency can mean a lot of different things. A few include, taking positions on exchange rates (such as the conversion of USD to EUR), taking a position on lending yields, or even simply a position on inflation. An economically-proficient reader might opine that these are all the same things, but there is a very fine line that distinguishes them all. Sort of like the line between digital currencies and crypto-currencies.
Crypto-currencies are a subset of digital currencies. One who "invests" in crypto invests into digital currency, but one who invests into digital currency does not always invest into crypto.
There is a distinction, even if we all instinctively knew what the authors were trying to get across.
Digital currency is an all encompassing term for any money that solely exists electronically. Example: Money deposited into a bank account is digital currency. Investing into digital currency can mean a lot of different things. A few include, taking positions on exchange rates (such as the conversion of USD to EUR), taking a position on lending yields, or even simply a position on inflation. An economically-proficient reader might opine that these are all the same things, but there is a very fine line that distinguishes them all. Sort of like the line between digital currencies and crypto-currencies.
Crypto-currencies are a subset of digital currencies. One who "invests" in crypto invests into digital currency, but one who invests into digital currency does not always invest into crypto.
There is a distinction, even if we all instinctively knew what the authors were trying to get across.
The digital currency set is larger than I thought (I believe it includes the items I've stated (see Wikipedia link re PayPay)).
If you call censorship resistance a 'fine line', I agree.
I explained why I made the distinction. You should probably learn to read a more carefully before making statements about all knowing this & that. Or fine lines.
What do you think the point of crypto is? Make me look silly, bro.
Edit: You see the information I've talked about? I created that. So if you've got more, I'd be impressed.
Edit2: If you've got any thoughts on the blockchain as a data-commons for AI, I'm all ears.
Edit3: Any thoughts on the future of the decentralised web? Tangles for the IoT? How evolution relates to hard forks? Anything like that? Or just some dictionary definitions?
If you call censorship resistance a 'fine line', I agree.
I explained why I made the distinction. You should probably learn to read a more carefully before making statements about all knowing this & that. Or fine lines.
What do you think the point of crypto is? Make me look silly, bro.
Edit: You see the information I've talked about? I created that. So if you've got more, I'd be impressed.
Edit2: If you've got any thoughts on the blockchain as a data-commons for AI, I'm all ears.
Edit3: Any thoughts on the future of the decentralised web? Tangles for the IoT? How evolution relates to hard forks? Anything like that? Or just some dictionary definitions?
My compatriot, I'm gonna be hoenst and say I have only a modicum of a clue what you've been trying to convey in this thread chain, and I've only been replying on what I've assumed you're trying to get across. No disrespect, I just think there's a language barrier going on here.
>I explained why I made the distinction. You should probably learn to read a more carefully before making statements about all knowing this & that. Or fine lines.
This is true. I have a habit of skimming and assuming if something's unclear.
>What do you think the point of crypto is? Make me look silly, bro.
Damn. If I came off as combative, wasn't my intention. Crypto's got a lot of uses. Fighting censorship through decentralization is one of its most notable features. Speculation and decentralized asset manipulator is another.
>You see the information I've talked about? I created that. So if you've got more, I'd be impressed.
I don't understand.
>If you've got any thoughts on the blockchain as a data-commons for AI, I'm all ears.
I don't understand.
>Any thoughts on the future of the decentralised web? Tangles for the IoT? How evolution relates to hard forks? Anything like that? Or just some dictionary definitions?
Exploitation of networks will be easier to carryout and forensics will be easier to fudge on a decentralized network. Having everyone run through the same nodes and the ability to mask my traffic as a benign pass-thru will greatly enable cyber-crime, even more-so than our current clearnet. Censorship will lose its foothold on oppressing, but it will now enable the other type of independent criminal.
On tangles: I think, if I'm correct in assuming how directed acryllic graphs operate, this will be a boon for anti-censorship, but its still has the same pitfalls. I can catch a ride and spoof myself as a benign fellow network user. I don't know much about this, but I've put one of the whitepapers on my to-do list.
>I explained why I made the distinction. You should probably learn to read a more carefully before making statements about all knowing this & that. Or fine lines.
This is true. I have a habit of skimming and assuming if something's unclear.
>What do you think the point of crypto is? Make me look silly, bro.
Damn. If I came off as combative, wasn't my intention. Crypto's got a lot of uses. Fighting censorship through decentralization is one of its most notable features. Speculation and decentralized asset manipulator is another.
>You see the information I've talked about? I created that. So if you've got more, I'd be impressed.
I don't understand.
>If you've got any thoughts on the blockchain as a data-commons for AI, I'm all ears.
I don't understand.
>Any thoughts on the future of the decentralised web? Tangles for the IoT? How evolution relates to hard forks? Anything like that? Or just some dictionary definitions?
Exploitation of networks will be easier to carryout and forensics will be easier to fudge on a decentralized network. Having everyone run through the same nodes and the ability to mask my traffic as a benign pass-thru will greatly enable cyber-crime, even more-so than our current clearnet. Censorship will lose its foothold on oppressing, but it will now enable the other type of independent criminal.
On tangles: I think, if I'm correct in assuming how directed acryllic graphs operate, this will be a boon for anti-censorship, but its still has the same pitfalls. I can catch a ride and spoof myself as a benign fellow network user. I don't know much about this, but I've put one of the whitepapers on my to-do list.
Maybe the 'crypto' vs 'digital' is too subtle for most ppl to understand (as in, what drives the use of the language. Why players are motivated to use the words they do). Maybe I didn't explain it well.
It's like the use of the term 'bcash' to discredit Bitcoin Cash.
If you -- not being stupid -- don't get it, it's probably not worth my time explaining it again.
Edit: it's past 1 here. Need to sleep. Sorry for the short reply. You should check out Monero. A look at what the privacy has to offer.
It's like the use of the term 'bcash' to discredit Bitcoin Cash.
If you -- not being stupid -- don't get it, it's probably not worth my time explaining it again.
Edit: it's past 1 here. Need to sleep. Sorry for the short reply. You should check out Monero. A look at what the privacy has to offer.
>Maybe the 'crypto' vs 'digital' is too subtle for most ppl to understand (as in, what drives the use of the language. Why players are motivated to use the words they do). Maybe I didn't explain it well.
I assume most don't care. The dichotomy is unimportant to them.
>If you -- not being stupid -- don't get it, it's probably not worth my time explaining it again.
I get it.
>it's past 1 here. Need to sleep. Sorry for the short reply. .
Sleep tight.
>You should check out Monero. A look at what the privacy has to offer
Already a user. Got in before people realized how much of a game changer this is.
I assume most don't care. The dichotomy is unimportant to them.
>If you -- not being stupid -- don't get it, it's probably not worth my time explaining it again.
I get it.
>it's past 1 here. Need to sleep. Sorry for the short reply. .
Sleep tight.
>You should check out Monero. A look at what the privacy has to offer
Already a user. Got in before people realized how much of a game changer this is.
Seems like a good opportunity to explain why "that is true". I'm curious what you're thinking.
Each asset can be looked at in terms of use cases. Bitcoin is the first crypto asset. The currency use case. Etherium is a generalised platform -- computing. Others have been created or are in the works.
For any given use case I believe the solution could be done more efficiently with traditional tech. What traditional tech doesn't do is provide resistance to censorship. Governments can take them down. Currencies, social networks, whatever. The raison d'être of crypto is to provide this resilience. That's what the extra resources go to. Crypto is valuable because it's a more resilience-whatever. E.g., Bitcoin is a more resilient money (Monero is better b/c it's private). Assets which can be taken have less value. Platforms which require permission have less innovation. That's the quick answer.
For any given use case I believe the solution could be done more efficiently with traditional tech. What traditional tech doesn't do is provide resistance to censorship. Governments can take them down. Currencies, social networks, whatever. The raison d'être of crypto is to provide this resilience. That's what the extra resources go to. Crypto is valuable because it's a more resilience-whatever. E.g., Bitcoin is a more resilient money (Monero is better b/c it's private). Assets which can be taken have less value. Platforms which require permission have less innovation. That's the quick answer.
> if you're downvoting me for this comment then you don't know what you're talking about. Happy to debate!
Well, it's just that it's fairly obvious what is meant by the headline given the events of the past couple of years and your comment doesn't add anything.
Well, it's just that it's fairly obvious what is meant by the headline given the events of the past couple of years and your comment doesn't add anything.
The words are wrong. The definitions are incorrect. If you don't know the difference then it does add something. That's called ignorance on your part. I've explained the difference.
Edit: & it makes a difference b/c one implies government control & the other control by the individual. Individual freedom. Privacy. Saftey from persecution. Allowing freedom of speech -- without the risk of being defunded by the government.
Edit2: Thank you for your comment.
Edit: & it makes a difference b/c one implies government control & the other control by the individual. Individual freedom. Privacy. Saftey from persecution. Allowing freedom of speech -- without the risk of being defunded by the government.
Edit2: Thank you for your comment.
No, Bitcoin is still a digital currency, even if it's also a crypto-currency.
Also, Paypal is not a currency at all, it's just a bank and payments provider.
Also, Paypal is not a currency at all, it's just a bank and payments provider.
> No, Bitcoin is still a digital currency, even if it's also a crypto-currency.
I believe that's correct. Is the fund investing in non-crypto assets? 'Digital' implies the category 'digital' rather than 'crypto'. It's a subtle difference, but important for when government/gov agencies frame the tech.
My 'Edit2' of the root comment is incorrect.
> Also, Paypal is not a currency at all, it's just a bank and payments provider.
I believe PayPal is seen as having an electronic currency:
https://en.wikipedia.org/wiki/Digital_currency#Centralized_s...
Edit: I'll amend further. The headline is definitionally correct. It's not as precise as I would like since it doesn't convey exactly what the fund is investing in. I think being precise in this matter is important b/c the word use is used to frame the tech as yet-another-digital-thing vs a censorship resistance technology (allowing privacy in an age of increased surveillance & free speech where centralised companies have become the censors). The word 'crypto' has a certain connotation -- which is why I think the SEC won't use it. Or other gov agencies refer to it as 'so-called' crypto currency.
It's also why Coinbase says 'digital currency', I think. There are ppl who try & force the matter when they're being interviewed. Well, I'm forcing the matter back.
---
Edit2 (reply to icebraining):
icebraining, I'm being throttled. Here's my reply,
> A random line in Wikipedia does not make for good evidence about how something is seen.
At least I supplied evidence, vs your naked claim.
> Bloomberg is writing for a general business audience, using a more generic term is normal
Good journalists use 'crypto'. Here's an example from Forbes (general business audience?),
https://www.forbes.com/sites/laurashin/2017/08/10/coinbase-b...
> doesn't imply anything.
I think it does. I've explained above in an edit. You seem to be making a lot of statements without backing anything up with reason.
I believe that's correct. Is the fund investing in non-crypto assets? 'Digital' implies the category 'digital' rather than 'crypto'. It's a subtle difference, but important for when government/gov agencies frame the tech.
My 'Edit2' of the root comment is incorrect.
> Also, Paypal is not a currency at all, it's just a bank and payments provider.
I believe PayPal is seen as having an electronic currency:
https://en.wikipedia.org/wiki/Digital_currency#Centralized_s...
Edit: I'll amend further. The headline is definitionally correct. It's not as precise as I would like since it doesn't convey exactly what the fund is investing in. I think being precise in this matter is important b/c the word use is used to frame the tech as yet-another-digital-thing vs a censorship resistance technology (allowing privacy in an age of increased surveillance & free speech where centralised companies have become the censors). The word 'crypto' has a certain connotation -- which is why I think the SEC won't use it. Or other gov agencies refer to it as 'so-called' crypto currency.
It's also why Coinbase says 'digital currency', I think. There are ppl who try & force the matter when they're being interviewed. Well, I'm forcing the matter back.
---
Edit2 (reply to icebraining):
icebraining, I'm being throttled. Here's my reply,
> A random line in Wikipedia does not make for good evidence about how something is seen.
At least I supplied evidence, vs your naked claim.
> Bloomberg is writing for a general business audience, using a more generic term is normal
Good journalists use 'crypto'. Here's an example from Forbes (general business audience?),
https://www.forbes.com/sites/laurashin/2017/08/10/coinbase-b...
> doesn't imply anything.
I think it does. I've explained above in an edit. You seem to be making a lot of statements without backing anything up with reason.
'Digital' implies the category 'digital' rather than 'crypto'.
It only implies that for people knowledgeable enough to clear know what "cryptocurrencies" are. Bloomberg is writing for a general business audience, using a more generic term is normal, and doesn't imply anything.
I believe PayPal is seen as having an electronic currency:
A random line in Wikipedia does not make for good evidence about how something is seen. Especially as the line says they "will sell" their currency, which is not something Paypal does currently.
Paypal is a bank, they hold money in existing currencies, they don't emit their own.
It only implies that for people knowledgeable enough to clear know what "cryptocurrencies" are. Bloomberg is writing for a general business audience, using a more generic term is normal, and doesn't imply anything.
I believe PayPal is seen as having an electronic currency:
A random line in Wikipedia does not make for good evidence about how something is seen. Especially as the line says they "will sell" their currency, which is not something Paypal does currently.
Paypal is a bank, they hold money in existing currencies, they don't emit their own.
I would call "former Harvard money manager" an anti-pedigree given its gross incompetence this past year.
Ari Paul[0] helped run a 75B fund. This isn't particularly new. The clumpy writer should probably sit down & figure out what's going on before shouting from the rooftop.
[0] https://twitter.com/aridavidpaul?lang=en
Edit:
Here are 15 more hedge funds for the klutz. Please old media: keep up! Would quite like NEWs.
https://www.forbes.com/sites/laurashin/2017/07/12/crypto-boo...
Edit2: dpflan, I think I'm being throttled b/c of my VPN. Here's how I see it;
Personally, I think bitcoins will still increase, but the bet is more symmetrical. There are other crypto assets which are asymmetrical bets (lose 1x, gain 100x). I focus on the latter.
[0] https://twitter.com/aridavidpaul?lang=en
Edit:
Here are 15 more hedge funds for the klutz. Please old media: keep up! Would quite like NEWs.
https://www.forbes.com/sites/laurashin/2017/07/12/crypto-boo...
Edit2: dpflan, I think I'm being throttled b/c of my VPN. Here's how I see it;
Personally, I think bitcoins will still increase, but the bet is more symmetrical. There are other crypto assets which are asymmetrical bets (lose 1x, gain 100x). I focus on the latter.
This is a gem: https://twitter.com/GlobeSvcs/status/897666132705988609
What do others think about Bitcoin's value changes and BTC as an investment? (Or the missed opportunity of investing in fidget spinners :)!)
What do others think about Bitcoin's value changes and BTC as an investment? (Or the missed opportunity of investing in fidget spinners :)!)
The value proposition has always been that if it can succeed success being defined as being one of the major crypto currencies to see adoption, then just taking 1% of the global gold market, black market transactions, and remittances; its worth around 5k-ish already.
I would consider it a gamble and not an investment. Some call it a new asset class that isn't correlated to other assets, which is valued by portfolio managers. Its high risk high reward, if you understand why it has value and want exposure to the risk, put in enough that you are fine losing. This is still a grand social experiment and still could plummet in price at ANY time.The government regulatory clarification we have seen over the past few years has lessened the risk of a government crackdown at least.
This is not financial advice.
I would consider it a gamble and not an investment. Some call it a new asset class that isn't correlated to other assets, which is valued by portfolio managers. Its high risk high reward, if you understand why it has value and want exposure to the risk, put in enough that you are fine losing. This is still a grand social experiment and still could plummet in price at ANY time.The government regulatory clarification we have seen over the past few years has lessened the risk of a government crackdown at least.
This is not financial advice.
>There are other crypto assets which are asymmetrical bets (lose 1x, gain 100x)
Such as? Eth isn't going to increase 100x in any meaningful amount of time at it's current price.
Such as? Eth isn't going to increase 100x in any meaningful amount of time at it's current price.
I've invested in Ripple (XRP):
https://blockchain.works-hub.com/blog/XRP-We-Will-Persuade-t...
https://blockchain.works-hub.com/blog/XRP-We-Will-Persuade-t...
Monero. It's the largest 'privacy coin'. I think I could make a strong investment case for it. I'll say this instead; Don't buy it unless you think privacy's important. It's the most (crypto) nerdy coin, with a technical community (r/Monero). I like to call it cypherpunk money.
As it's private it could get banned -- which could set in back in the short-term. In the long-term, I think it's going to be money (or something like it). It could be a rocky ride!
Edit: A rocky ride with consequences (It's not a fairground ride). I want to point that out.
Edit2: You could sell your investment, obviously. I talking about if you're in for the duration.
As it's private it could get banned -- which could set in back in the short-term. In the long-term, I think it's going to be money (or something like it). It could be a rocky ride!
Edit: A rocky ride with consequences (It's not a fairground ride). I want to point that out.
Edit2: You could sell your investment, obviously. I talking about if you're in for the duration.
If a record keeping system inherently obfuscates the records, how do you audit the records?
The Harvard endowment has suffered from poor management recently so not sure if the headline is intended to make sure people think this is a good or bad idea
Yeah, this is interesting. They mentioned some turnover at the fund, and this guy in particular only lasted for a couple years at Harvard.
I recall a few years ago how people talked about Harvard fund mgmt in reverent tones as if they somehow were simply smarter and better than everyone else. That caused some dissonance with me because a former boss's boss was someone who Harvard Endowment hired, and in my experience he was definitely not smarter and better trader than everyone else.
So I guess over time they find it as difficult to make returns as the rest of us do.
I recall a few years ago how people talked about Harvard fund mgmt in reverent tones as if they somehow were simply smarter and better than everyone else. That caused some dissonance with me because a former boss's boss was someone who Harvard Endowment hired, and in my experience he was definitely not smarter and better trader than everyone else.
So I guess over time they find it as difficult to make returns as the rest of us do.
Why would Harvard let these people go only to turn around and pay them fees to invest their money as a separate entity?
I misread the title as "is laundering a digital-currency hedge fund." While a funny mental slip, on second thought it might not end up far from the truth given some of the coin news the past few months.
Funny how biases play on our interpretation of the world.
Biases or the likelihood of history repeating itself more often when it leads to personal gain?
I think it's possible that if crypto currency became 'too' prevalent the 'war' on drugs would end & police resources rerouted to proper crimes (my bias after a little reading on the subject).
I remember attending a meeting of Hedge fund people and they had a concept called liquid alternatives. Looks like this fund is positioning itself as a liquid alternative.
>>If you will invest in a hedge fund, or require maximum transparency and regulatory agencies, I usually recommend Cayman Islands or Luxembourg.<<
edit: the point of the post, is more or less answer to my own question. Why cayman instead of Panama or some other place. May be I am not clear about it in the post.