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Say you have a amassed a few bitcoin. Now it's sitting in an hardware walled doing nothing. Is there a better way to generate income rather than it sitting there doing nothing? Collateralized loan? Earn interest? Trade them for S&P500 etf?
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Doing nothing has paid hansomely anon.
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40 sats \ 3 replies \ @anon 25 Feb
Yes, yea it has. Thats all Ive done for for the last couple halvings, but now I would like to put the asset to work. I would like to enjoy some reward from my risks while im still around.
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"Put the asset to work" sounds very fiat minded. Bitcoin is a savings tech, not an investment that generates fiat "returns" for a certain risk. If you want that, sell some btc and buy stocks or real estate or smth, but be prepared to lose purchasing power against your "sleeping" btc.
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Last couple halvings and no reward yet? Are you sure it's bitcoin you're holding?
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The halving returns every 4 years are pretty safe and profitable 🤙🏽
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This is a very fiat mindset. Bitcoin is a new paradigm.
There's no way to make your sats work for you without giving up your keys, and the moment you do they're not your coins anymore. Therefore, all such solutions are unsafe.
Why be unsafe when your sats naturally appreciate in value over time?
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There's no way to make your sats work for you without giving up your keys
Not to be that guy, but technically, providing liquidity to the LN is a way of putting your sats to good use, while keeping control over your keys. But it's not something easy to pull off profitably. So all in all, I agree with the spirit of your message.
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31 sats \ 1 reply \ @anon 25 Feb
I think you skip a key point, while you may keep those keys you have to make them hot and there are other LN risks too. So putting them on the lightning network is not a zero risk move. It might be relatively low risk, especially if you're not a routing node, but you still have some nonzero and unpredictable risk. Even if its just losing sats to forced channel closes. So I see where you are trying to go but I strongly disagree. People saying lightning liquidity is risk free has led to an enormous amount of disillusionment and heartache around lightning. We need to be clear about risks and tradeoffs. Ask some LN veterans who ran self hosted nodes in 2018-2020 or during any high fee environment if you're skeptical.
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Oh i fully agree with you. It's a hot wallet, it's high-risk, especially in a high-fee environment, and very stressful. I speak of experience. I was just being unjustly pedantic on the technicality of having to give up your keys to make your SATs work.
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32 sats \ 1 reply \ @anon 25 Feb
I would try to reframe: Lets say you think you can get 5% on a "low"risk investment leveraging your Bitcoin stack. Well there must be some risk, are you sure its low? Are you sure you can quantify it accurately? For now, lets just blindly assume you can. That 5% is still a fiat lie. You are doing that 5% math based on something like this: I have $1,000 worth of BTC and think I can make $50 per year, so 5%. But that is incorrect. That $1,000 worth of Bitcoin could be worth $10,000 in a few years. So lets redo the math: $50 / $10,000 = 0.5% (0.005) How do you judge that "low" risk investment now that you realize the bitcoin adjusted return is not 5% per year, its really 0.5%? Is it really worth risking your stack for a 0.5% return? Your return is much lower than you realize and your risk is much higher than you realize if you can accept how much higher BTC can go. If you owned real estate in Manhattan in 1920 would it be a smart play to leverage it up when the Great Depression could be around the corner? No but you're so caught up in the roaring 20s that you think they'll go on forever.
*yes I am oversimplifying and not thinking about rate vs APY or compounding etc. but you get the point - this is for illustrative purposes not perfect math
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You'd have my vote.
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The CAGR is your reward for hodling and doing nothing, but if you're looking to risk some capital there obvious ones would be
  • Running a lightning node and selling liquidity, time-consuming and you need technical expertise and a lot of number crunching
  • If the interest rates are attractive, you could borrow against it for a downpayment or the entire cost to purchase real estate and then use that rental income to pay off your loan then you get the bitcoin back and let the rental service the rest of the debt and later maybe buy you some bitcoin to add to your stack
  • Arb trading especially in P2P markets can generate some returns, depending on the market you're in, you could be purchasing cheaper bitcoin and selling on various P2P markets for between 5 - 50% but yeah its time consuming and is basically a second job
  • Going degen and trading options with something like LN markets
  • You can try liquidity pools on Liquid or Rootstock but you could suffer impermanent loss on that
No guarantees, of course, you could end up with fewer Bitcoin, not sure why idle bitcoin is a bad thing, having your money work for you is more of a fiat concept
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Get a loan, buy a new miner, mine more bitcoin, sell miner, pay the loan to get your bitcoin back.
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107 sats \ 0 replies \ @Atreus 25 Feb
These are the initial thoughts that lead to you losing your bitcoin 😀
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As others said: do nothing.
Bitcoin is static supply asset. So as things get more efficiently produced, more automatized and cheaper to produce, you get to enjoy that with hard money such as bitcoin.
The 'searching for yield' is an old mindset induced by fiat world, in which you need yield to even stay equal.
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Don't chase yield.
Just do nothing.
Many people have lost many Bitcoin by foolishly thinking that they need to generate a yield with their Bitcoin. This is a fiat mindset brought about by inflation eroding the purchasing power of soft money.
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5 sats \ 0 replies \ @OT 25 Feb
You can use BTC to put up liquidity for join market and get a small yield over time. It's not much though and might not be worth the risk of leaving it in a hot wallet.
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I would never feel comfortable putting my stack on the line. Just me tho
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Buy a home and rent it.
Start a business.
Basically create value with it.
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dont trade security for yield, however if you want to allocate a small % of you stack there is atomic finance passive strategy or 2x long trades. Joinmarket or LN liquidity can also be concidered but never take out of cold storage for the promise of a few %APY. you will lose.
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The notion of "putting money to work" and "yield" encompass a fiat based mind set developed in order to "keep up with inflation". If you have a deflationary asset like Bitcoin and low time preference, the amount of bitcoin obviously remains the same, but buying power increases over the long term. It really is a new money paradigm. We are still in the era of cheap Bitcoin. Stay humble and stack.
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Do nothing it’s a bearer asset and should be treated as such. Don’t be an idiot like me. I staked some and lost it all. Picking up quarters in front of a steamroller never ends well!
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It's actually about which side of the coin you can see. There are two perspectives for your questions. One represents the notion of 'On Doing Nothing' and the other one which you want to achieve is ' Something is better than nothing'.
TBH Bitcoin is a juggernaut. Bitcoin is basically a sound money that would even appreciate while sitting idle. Idleness is a virtue of Bitcoin so it's best you go with the first ideology and don't overreact and enjoy 'your peace of mind' as the fruit of Bitcoin idleness.
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0 sats \ 0 replies \ @KLT 25 Feb
I agree with everyone else. Bitcoin gives you the opportunity to just go about your life while your stack appreciates significantly against fiat. It’s like if someone in 1900 put a gold coin in the closet for 20 years, it would be worth more without them chasing yield. The paradigm shift that bitcoin brings will take a long time to digest, but now I can just focus on family, doing great work all while my stack appreciates without me having to pull some financial scheme out of my ass.
Most bitcoins aren’t stolen, they’re lost.
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Doing nothing? That's what I used to think too and how I lost some on Celsius. The BTC gains purchasing power as fiat around it loses value. Now I just buy, hold, and spend as needed but my low time preferences are reduced as I realize that I'm going to be needing to sell BTC to buy whatever I want. Is it that important or should I wait until it gets cheaper?
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Trade for Sp500? Are you out of your mind? So that you can start losing purchasing power against bitcoin? You bitcoin it's there giving you time. Fiat need yield and interest that is paid with inflation. Sell your bitcoin for something that can change your life. Like a house, if you can get a small loan using bitcoin as collateral better. But my advice is, bitcoin is savings tech, you don't gamble your savings. Keep it for retirement,for some hardship in life, for your kids, or to buy something life changing.
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Using the bitcoin to operate a lightning routing node, collecting routing fees is one option. It is not an idle role, but it can leverage idle bitcoin to generate income.
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You can receive yield on your Bitcoin by lending them out to Nexo.
Not that I'd do that, but it's an answer to your question.
Been regularly listenig podcast in fountain and it contributes like 30% of my earning each day and other games that gives 300 sats a day (max), well stacking SATs is another word of "be patient'
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Selling liquidity on JoinMarket
the reason for yield is risk.
JoinMarket is a hot wallet - and your "yield" will be way under 0.2% annual. But you will be helping to restore the fungibility. Without fungibility, your bitcoin will be worthless in the long run.
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