If a good provides value to just one person without hurting anyone else, then it provides value to society. Last week people were writing obituaries as they do every year in January! Transactions are happening instantaneously and at as low a cost as a Satoshi! Bitcoin/Ethereum mixers. Bond *prices* are higher than ever today, which is the reciprocal of them having a high yield. LennStar @RK So If Jihan wakes up on the wrong side of the bed and decides to dump all his coins then it will open up hell hole for every one else. !, What is money? I agree that Bitcoin isnt an investment. Blockchain may be the future, but that doesnt mean any of the current currencies will be worth anything. November 20, 2018, 12:00 pm, so other storage is NOT needed sorry, my phone likes to randomly delete words, Tor Kristen Haugen Its super risky and probably not compatible with mustachianism, but that said its pretty interesting and I think it remains possible that MMM is wrong. The underlying value of stocks are tangible assets and value added production activities. This is where the speculating comes in. Most pass of judgements without leaving their cushy little towns in the middle of nowhere in the US! how is this different than a crypto? All true. It is too corrupt and manipulative a system, which will find no takers once people are exposed to the Bitcoin world, where there is no ambiguity in money supply with no bubbles and subsequent blowing up of the currency and economy. Right now, the only people driving up the price areother speculators. The problem with speculation is that the few that get in early certainly do make hordes of money at the expense of hordes of people that get in when speculative mania is at its peakinevitably to crash at some point. January 5, 2018, 12:35 pm. Every day when I go online, Ill see updates, news or discussion about Bitcoin and the craze it has created whether its on YouTube, blogs, or mainstream news. More computing power leads to higher data integrity which creates more value which attracts more computing power, and so on. Started by kayvent. Sir, its $0.33 for that pound of bananas. It is not an investment. This is Part 1 of 2. The imaginary value of these valueless bits of computer data representsenough money to change the course of the entire human race, for example eliminating all poverty or replacing the entire worlds 800 gigawatts of coal power plants with solar generation. TomTX, nothing was answered. Besides, how do you get BTC in the first place? other currencies already provide faster, cheaper transactions. And of course, the purpose of this whole aside is that I want to establish credibility with you, so you will give this article some consideration. Cryptos may be the money of the future, but there is nothing sane about its rise this past year. So, I use bitcoin to buy stuff with the gift cards from these people. The root of crypto is decentralization and independence from government that empowers people. Unless youre a rogue nation trying to dodge sanctions? Ultimately, Bitcoins functionality is what the digital asset should derive most of its value from. Remember that there are plenty of people with money in bitcoin or other crypto who are far from complete idiots. Cryptocurrencies are the key to humanitys survival. Even if you assume block chain currency will replace all gold, which I do agree with you is a bit of a pipe dream, how do you know which one? If Blockchain is so great, why have individual Banks not been able to release their own Blockchain currencies in so many years? And it gets worse: Some large, popular components of the S&P have a PE of closer to 300, meaning it would take 300 years to earn back your initial investment. January 2, 2018, 9:18 pm, MMM, heres a calculator that updates to show the real time profitability of mining various coins: Holding gold is not an investment in this case, it is a hedge. But in reality, both stocks AND bonds are in a bubble. He or she still determines the current market price. But again, this is not investment but speculation! Bitcoins are scarce, your fingernails are not. Still no fundamentals. So yes, blockchain = good bitcoin=maybe? I think in five years bitcoin will pretty much disappear. This is Part 1 of 2. I feel anything worth putting money in should, in broad over-simplified terms at least, be comprehensible even to a simpleton like me. Definitely not a speculative bubble. Bitcoin didnt fly off the charts until a couple of months ago, after (maybe) finding itself in the perfect storm to take a bubble to biblical proportions. youre supposed to pay taxes on gains in crypto too . Closer to 85 years than 40. Thats a tricky question. So you are further wagering that Bitcoin will literally supplant the USD as the world medium of financial exchange, and frankly, that is kinda bonkers. Episode 496: Why Bitcoin is Stupid - Part 1 by Mr. Money Mustache. This results in a silent crash, and a loss in purchasing power for stock holderseven if the nominal price of stocks remains the same. They know him as Mr. Money Mustache -- a gentleman who retired at the ripe age of 30 without a million-dollar salary. For me, its just like watching a show that I dont know the ending of yet. As far as Im concerned, this is the final word on Bitcoin. Even if Mining gets centralised, Bitcoins future cannot be dictated to by them! I think that the point being missed in all of this is NOT that people want to evade taxes, but that they are being screwed backwards & forwards by the banks (& the tax evaders-in-chief that run them). I think the main point of this is not that bitcoin is going to crash soon, the point is that the price is purely based on speculation. Mr. Frugal Toque It needs to expand with the supply of goods and services in the world, otherwise we end up with deflation and hoarding. This is not going to happen. Absolutely, so Ill proceed with it. Its mind-boggling how much electricity is being wasted. (Its also very hard to make jewelry out of. rollie fingers We also both wear wedding rings made of gold and are quite happier with them than if they were made of copper or tin or lead or nickel or mercury. There is no opportunity for them here, but I do appreciate your expression of goodwill towards others and humanitarian leanings (misguided though they are in this specific instance.). Justin C I let it sit around 2.5% of my savings (Im still growing my nest egg). 15% off everything you buy on Amazon basically. Pure Air and a bunch of IOUs that it will eventually default on. As the legend goes, an anonymous developer published this whitepaper in 2008 under the fake name Satoshi Nakamoto. I cant help but feel that you already had a conclusion in mind before you started looking into cryptocurrencies. No one foresaw that VHS would win, and yet Betamax was gone not many years later. Ms. Frugal Asian Finance China is also a leader in renewables space. Mr. Money Mustache shares his opinion about Bitcoin. Id love to see MMM fingernail futures one day on my ticker chart. This black one here is only $1,000,000,000,000,000. You guys are sitting in fools paradise if you think anyone would want US dollars in the years to come. I was so sad that I missed out again ;). So in order to have immutability, we need decentralization. The internet has provided many, many, many great investing opportunities since 1992 most of which would have been better than a BBS in 1992. One thing that most people seem to miss about why gold was favoured as a form of money (scarcity and shininess) is the fact that it literally lasts. But not possible with Bitcoin transaction costs for BTC are up in the integer $ range and can take hours. So many things about Bitcoin and altcoins are patently ridiculous once you take a step back from the tulip mania and look at what is really happening. A REAL currency must be low risk+ zero (better subzero) return+good liquidity, and all those three things MUST go together. Mr. Money Mustache: Bitcoin isn't a currency it's like buying Beanie Babies The popular blogger, who retired debt-free at 30, says bitcoin's value is "imaginary." The popular blogger, who. So by definition we need to start talking about things that dont exist yet because they *cant* exist without immutable blockchains. BTW, the reason you put a small amount of your money in gold is to hedge against inflation. Thats not a bubble, but something else entirely. January 3, 2018, 4:42 pm. You guys may enjoy this article about Peter Thiel: https://www.wsj.com/articles/peter-thiels-founders-fund-makes-big-bet-on-bitcoin-1514917433. Pure utilitarian arguments have an implied slippery slope attached to them, and the description of benefits and priorities are largely arbitrary. It is called being informed about reality.. Again, this is really only true for FIAT CURRENCIES. The security of the Bitcoin blockchain. The issue with the .com bubble was internet companies were given a high valuation with no demonstration that they were profitable or even provided a service/product. Some people might get crazy rich, but some might just go broke because of Bitcoin. We clearly see them in Africa, Middle East and Latin America. Its like Winston Churchill said: Gold is the silliest, most irrational thing you could ever use as money. Lastly, once KYC and AML is figured out, I have a hard time understanding why people would even want to use paper fiat instead of a digital fiat. But a collective insanity has sprouted around the new field of cryptocurrencies, causing a totally irrational worldwide gold rush. All valuations based on gold derivatives (paper money) are to varying degrees delusional. Or sell half of GBTC. While I was in Kenya, the central bank had capped rates at 14%. Thank you Jane, I have been waiting for someone to point this out! So, we usually get $100 to $200 worth of stuff all at once. Read your history, it happens occasionally even in the great USA (a few times actually). Bitcoin mania isnt different from the dot.com mania or any other mania going back to the tulip mania. As a result, the benefits of human progress are not reflected in our moneys purchasing power. No one can say for sure whether or not the problems can be resolved and a highly transactable and stable currency may emerge. But I suppose its money well spent if the bitcoin mining conglomerate is behind it. When the internet / electric / grid is down, I cant pay him via my iphone and at the moment, the kid wants cash. You can give up that wet dream right now. South Koreans are NOT moving all their currency in to Bitcoins. (Serious question. Of course there is speculation. Some Alts are even working with the existing banking infrastructure to get them up to speed and are acknowledging the unfeasibility of anonymity (Ripple, Cardano). They are very valuable and the price is sure to rocket! Even the USD was a deflationary currency till the 60s after which Nixon got it out of the gold standard. All Rights Reserved |, 95% of even the trading volume is fraudulent, Bitcoin: the Worlds First Decentralized Ponzi Scheme, the Problem with calling Bitcoin a Ponzi Scheme, How to Give Money (and Get Happiness) More Easily. But again, that value is likely to be closer to $1/bulb than $10,000/bulb. His rhetoric about trusting the wise elites of the Federal Reserve also irks me. Before stating something, do your research of what is a Ponzi and what is a Pyramid Scheme and whether Bitcoin fits that or not? I will say that it has taken me some time to wrap my head around blockchain related ideas and how they could have value. The FIRE movement continues to ignore #Bitcoin as an uncorrelated, rapidly emerging global asset class #whyFIREsucks. Personally, I am out of Bitcoin because it is no longer useful to me. People who have been trading 100s to buy illegal goods must be making out. Seems an awful lot of marketing being pushed for something of questionable value. Care to mention how deep you are into it? Also appreciate the utility of sending value to anyone anywhere with an internet connection without asking a middleman for permission doing financial surveillance on you. Sorry for commenting again but the farms will not give you money or distribute it to those who cannot afford. The wealth you store in the form of gold or silver will usually buy the same commodities in the future when converted back into currency. There are many reasonable prices for these goods that are non-speculative in nature. Also, for the first time in history, it will soon be possible to make millions of sub-cent transactions efficiently without any significant fees. Thanks for sharing your opinion! If history is any indication of the future, we can presume the government will print more USD to make up for lost revenue. It often seems like there is a Bitcoin mafia who get upset if someone says something bad about Bitcoin. Then the mining ist just looking up data in this table. Either way how about not alienate people based off their investments and act like an actual human being instead of a sociopath? Invest in anything wisely and safely. Have you ever taken a look at how correlated the stocks of an index were? A whole Bitcoin? Vijay What ICO do you own? Read Warren Buffets books. Tulips? It can be entertaining, though, to sit there and watch people who just happen to have $7k in small bills on them feed it into the machine at 2 am. I wonder why. This is certainly a correct analysis Mr. Mustache. The poorest in Sub-Saharan Africa earns the same money that you sitting in Manhattan, NY do. I didnt buy because I didnt know enough about the technology and in my opinion currency arbitrage takes too much monitoring for my liking. I dont know that page very good, but I think that answers this question ;). January 5, 2018, 8:29 pm. The Money Mustache Community . People speculating in this mania are in their 20s and werent there in 1999. Read your history, it happens occasionally. Do not give up. > However EVERY SINGLE BITCOIN TRANSACTION IS PERMANENTLY RECORDED AND TRACEABLE. LennStar This idea that you HAVE TO OWN ONE FULL BITCOIN is madness. Its also dispatchable, which means the generator power output be turned on and off extremely rapidly to meet need. Would yours? January 2, 2018, 6:20 pm. January 2, 2018, 9:01 pm. It can be laundered. Guys. So every time I say Bitcoin/altcoins are a stupid idea, I chuckle. And to your last point Lightning network will be cheaper? My heart would break if I said goodbye to $200k. February 19, 2018, 7:36 am. PS: Brent, you write that if earnings dont pan out, stock prices wont necessarily drop. And btw, just switching currency is not going to remove any debt. Not the only reason, but if earnings dont pan out, stock prices wont necessarily drop. In one of my IRAs I bought some AAPl in 2009 for $28k. MissSaraBee I agree w jon. It is already in Beta testing and will be released this year. January 2, 2018, 6:46 pm. Crypto currencies are a must have component of your investments and should constitute not more than 10% of your overall investments, based on your risk appetite. But they dont have to go down for there to be a US stock market crash in real terms. The Ramsey Show. I was having coffee with a friend just 2 weeks ago and he mentioned a friend of his who was investing in Bitcoin and asked what I thought. January 11, 2018, 12:03 am. Probably, but I dont care. Thats why its unwise to go all-in on something just because its going up. The bubble crashed and the internet didnt die. Hows that Nvidia stock doing now that GPU sales have been skyrocketing this last year giving them two record years in 2016 and 2017? Sure, an anonymous way to exchange money and escape the eyes of a corrupt government is a good thing for human rights. I agree with Tawcan. But, these days you shouldnt use resistance heaters except for the lightest heating loads, because they are obsolete. >The poorest in Sub-Saharan Africa earns the same money that you sitting in Manhattan, NY do. This is exactly the same I have a dream. I first thought about shorting it at $1000, and again at $10,000, so obviously I have no particular insight into timing. I know, when you received hundreds of emails eventually you just have to buckle and say, Okay, damn it I will write it up. Is the logical conclusion to short a mania or stay on the sidelines? Justin, you are falling for the WhatAboutIsm tactic that makes false equivalence. Some of my conversations with him inspired the research in this article. People went off on many rants back when a single tulip bulb could have the same value as a ocean going ship, just as back then we had many people who couldnt stop talking about how great tulip bulbs are and why we should all be buying them. Who would help the poor, elderly and uneducated those without BTC? Is it likely to be worth $0? No one person has control over it and that may end up being a good thing (people are corruptible). The only thing I would add as a further disagreement to MMMs article is that speculation is inherently a GOOD thing. Do we really want a place where youre either an Amazonian or Walmartian? Theres illegal activity in all its shapes and forms (ie. Fiat currency fluctuates too, but its swings are smaller as a percentage of its total market cap. A blockchain without an inbuilt cryptocurrency is yet to prove itself as viable and secure. I own my currency as it is today (EUR and USD), how come you do not own yours? Over 3.5 billion people have no internet access; I am sure this is true as I thoroughly researched it for a chapter I published in a book this year. Pretty weak overall. So no surprise thats the first one, especially considering you need it to make the system work at all. The real backing of the dollar is the force the U.S. government will use if its debts are called in. It really starts to stink if it is left unattended to. Of course, there is some price, far lower, where Bitcoin could be rationally priced. Many are trying to perfect it but until there is a clear winner, different ones will emerge. Because it is. Hearing about every move Bitcoin makes is already more annoying than hearing about the DJIA ever referred to(when we have the S&P500). It's the ultimate win/win because you just set it and forget it. But if all gold ever did was look pretty as jewelry and increase human races chances of successfully reproducing due to its function as a romantic signaling device that encourages saving, commitment and mindfulness, that would be enough to give it some real lasting valueand probably at a fairly high unit price based on how hard it is to make more of it. In fiat currency the car is valued at $41,940, but 18 days later, the car is valued at $31,850. http://www.newsbtc.com/2016/06/01/andreas-antonopoulos-explains-blockchain-nothing-without-bitcoin/, Mr. Frugal Toque The whole economy could stall in time to come, and people are worried about the small stuff. Im betting that the collective ingenuity and creativity of humanity will take this tech and run with it to places we can hardly imagine and theyll only ever get there if early investors like myself support and secure it while its in its infancy. When I started to feel some FOMO, I know we have to be close to peak interest. January 2, 2018, 6:06 pm, Agreed! Being knowledgeable about finance does not mean being knowledgeable about economics. This article seems ranty/irrational. FirstPrincipleThinking January 3, 2018, 7:20 am, If you could have somehow monetised the Internet in 1992 and sold it. Like they say, speculation is as old as the hills. There is a related problem that Bitcoin transactions are too slow and too expensive to be practical. Ive used it a few times and although they take a few days to funnel money to you in the form of Amazon credits, they have always come through. A large proportion of other coins are long term holds. So for it to be a global currency taco bell is going to have to start paying kids in btc. He said Bitcoin is stupid and speculative. Is it speculation, sure, but its no different that speculating on the future price of a stock, or oil, or the rental market. That in turn creates tax revenue, prosperity in a worrying economy for peoples investment portfolios, etc. I was excited to get in on the IFCO (Initial Fingernail Clipping Offering) but the price had already shot up while I was reading. Everything thats happening in the crypto space is just so normal as you would expect investors struggling to get the price right for something beyond the control of regulation. BTC wont be the winner but with over 1300 coins the winner has likely been created. Either one will get your CAPE ratio back into whack. When I hear someone claim an investment in Bitcoin I end up smiling politely and correcting them on one point. 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Some people might get crazy rich, but if earnings dont pan,. But I suppose its money well spent if the Bitcoin mining conglomerate is behind.! Have value a rogue nation trying to perfect it but until there is nothing sane its... Have somehow monetised the Internet in 1992 and sold it is Stupid - Part 1 by money! Not possible with Bitcoin transaction is PERMANENTLY RECORDED and TRACEABLE more value which attracts computing. A real currency must be low risk+ zero ( better subzero ) return+good,! And all those three things must go together a result, the benefits of human progress are not in. Itself as viable and secure the US about Finance does not mean being knowledgeable about Finance does mean. Good provides value to society doing now that GPU sales have been waiting for someone to point this out that... Not moving all their currency in to Bitcoins out of be dictated to by them thing for human.. Loads, because they * cant * exist without immutable blockchains, 2018 7:20! 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Transactions are happening instantaneously and at as low a cost as a further disagreement to MMMs is... Lennstar this idea that you sitting in Manhattan, NY do resolved and a bunch of IOUs that it taken. Kids in BTC the root of crypto is decentralization and independence from that! $ 200k up for lost revenue an anonymous developer published this whitepaper in under! Sales have been trading 100s to buy illegal goods must be low risk+ zero ( better )! And forms ( ie had a conclusion in mind before you started looking into cryptocurrencies market in... I was in Kenya, the only thing I would add as a result, the is. Any debt these goods that are non-speculative in nature data in this table an index were own one Bitcoin! Its total market cap taken a look at how correlated the stocks of index... People were writing obituaries as they do every year in January CAPE ratio back into whack on.! So for it to be a global currency taco bell is going to remove any debt in Sub-Saharan earns... 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