Spot on VIJAY. My friend who has a Masters in Computer Science inquired with me about investing in Bitcoin before Christmas and I told her essentially what I thought as mania. Bitcoin, although in a bubble, does have *something* behind it: It enables access to secure public ledger transactions. Firstly, if Jihan is that rich, its probably because he doesnt spend his money. Speculation of these underlying earnings is what often pushes stock prices higher. People like planting gardens. Who wants to sacrifice to earn financial freedom when you can just invest in Bitcoin and achieve the same in less than a year. I'm sure this had nothing to do with their personal stake in the outcome." There are third-party solutions, but they add complexity. Doh! and we live in the middle of it. That capability simply did not exist before blockchain-based currencies. Prices would rise, especially if the supply of these pills was limited (just as an artificial supply limit is built right into the Bitcoin algorithm.). You mixed that up. Hmmm..why not pay in bitcoins if it is so superior? And gold has at least *some* practical value you can make attractive jewelry that doesnt tarnish, use it in electronics, dental fillings. Bitcoin is a case study, and they have no idea (or choose not to believe) that theyre headed for the unfortunate future footnotes of that case. I understand the concept of having an idea, building business around it with angel investors and later going public where you and I can invest but I dont understand investing in something like XRP. There is no reliable way to track or trace paper. I think the far greater chance is your comment will be the joke. Its totally different when you lose your money by yourself. Ignore this utterly irrational FUD and embrace the digital world. College, Medical, Cars, houses, Child Care, Stocks, Bitcoin, hell even dining out is all overinflated. There is a reason that central banks own most of the wotlds gold. Tim, do you think Bitcoin cares what the Government thinks or wants? I just recently read that someone in metro Vancouver Canada liquidated $100,000 worth of their retirement savings and used that money to purchase servers for bitcoin mining. With governments coming on board, digital cash will stop money laundering and all these bad things Bitcoin has been associated with. And likewise you can scratch off the idea of any government backed cryptos, because those are by definition centralized. Adeney lives in Longmont, Colorado, and contends that most middle-class individuals can . Compared to bitcoin it uses only a fraction of energy. Consequently, theres a very limited way in which gold can feed you (and bitcoin cant), Uberartist . Unless youre a rogue nation trying to dodge sanctions? This way, whichever direction GBTC goes, you wont be in a regretful situation. Fired & Free A stock is a share of an actual company, bound by rules and regs (however imperfectly administered, at least they exist). This black one here is only $1,000,000,000,000,000. Even if you are the only one in the room willing to do it. I agree with you. gov issued currencies = Human trust and cooperation. http://www.newsbtc.com/2016/06/01/andreas-antonopoulos-explains-blockchain-nothing-without-bitcoin/, Mr. Frugal Toque The $16,728 Social Security bonus most retirees completely overlook. From arranging hits to buying drugs to political corruption. (Then Ill get out, right? The bidding up of prices in pursuit of speculative riches is not fine. Ten years later and the price is still nowhere near that prior high, with it currently trading around $60. Like my double comment? Me, I am willing to speculate some, not on bitcoin as a currency, but on an bitcoin as an idea about the future. Im 100% with you when you say investing in bitcoin (and other cryptocurrencies) isnt smart. OK, But What if Bitcoin Becomes the World Currency? Your fiat paper would be worthless in 10 years and you will be washing your ass with it! Agree, the valuation of these cryptocurrencies are out of whack. Come back after a couple of years to this blog and let us see who is vindicated! January 5, 2018, 1:18 pm, Right and this entire blog is my personal quest to nudge the worlds collective opinions such that ppl value more of the same things I do. Bitcoin/Ethereum mixers. This is really useful for me to hone my thinking about the topic. 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. Bill Batchelor Im not saying to build a bunker or anything but just diversify your portfolio for different economic times. Its like saying they are investing in lottery tickets. "@origamicyber So true! That is the right way to think about these things. Scott Nicholson Be careful what you wish for. Is Bitcoin eventually going to replace the physical green back dollars and coins in our pockets? But I get that most of these things arent problems that need solving in the first world. Governments have no choice here. Something only has value if ppl place a value on it. I regularly visit flip this home seminars just to network with people who leverage all their credit to gamble on an endeavor they have no experience with. You keep spouting off nonsense. So, I use bitcoin to buy stuff with the gift cards from these people. Evidently you werent invested in Pets.com and other rising stars with no hope of ever getting profitable. Their values float vs the dollar and the end goal is to trade them for dollars. Were human, so human. The internet is awesome, but once in a while a bubble arises and this time virtual currencies is about to pop! Youre confusing outcome with process. An emerging application that will be huge is true ownership and verifiable authenticity of digital goods. This volatility thing that seems to be biting you folks is because Bitcoin is at 200 Billion capitalisation today. Since the Fed can always print as much currency as it wants, I would probably bet on scenario #2 as well, so perhaps were half in agreement. There is no one to be happy but individuals. Bitcoin has very little usage. Read Warren Buffets books. https://twitter.com/SunnyStartups/status/946711941250273280/photo/1?ref_src=twsrc%5Etfw&ref_url=https%3A%2F%2Fcointelegraph.com%2Fnews%2Findia-falsely-condemns-bitcoin-as-ponzi-scheme-flawed-logic, A man is not a financial plan Max Your Freedom Read through TomTXs posts below Michael and you will get to know who started. Right now if bitcoin enjoys the lead, what is there to call it stupid. Mr Money Mustache 26-02-2023 Hobbyen. No? Of course, there is some price, far lower, where Bitcoin could be rationally priced. Sun, these guys are just parroting stuff the banks put out, to suit their points. There is a very good chance that this article will be the butt of jokes 5 years down the road, when the toilet paper fiat currencies are all passe! They grew pretty flowers that we enjoy looking at. It pays you to do scientific calculation work (that many volunteers already do for nothing) on the BOINC network. US is just one country in this big bad world, and not vice versa! Investing means buying an asset that actually creates products and services and cashflow for an extended period of time. Im not going to break the bank, but it sure is fun to be part of giving the world the choice to trust the network when the human institutions have failed. Educate yourself on why Bitcoin and Blockchain cannot be split up. January 2, 2018, 7:25 pm. Google, Amazon and Facebook came out of it. Ive been experiencing the Bitcoin frenzy from the sidelines, but I recently went all in, buying up 20 physical commemorative Bitcoins on eBay. Problem I have with this article is the blatant statement that Bitcoin is Stupid! This is to be expected for a revolutionary new technology. In a world of human trust, putting the wisest and most respected people in a position of Adult Supervision is a useful tactic. Or physical goods if you want to use it to record land or vehicle deeds, etc. (Now, as you mentioned, it is most likely just speculation driven by greed). It is cool. The Cryptocurrency bubble is really a replay of the past: A good percentage of Humans are prone to mass delusions which lead to irrational behavior. So, how is Bitcoin better or different? 0 replies 0 retweets 3 likes. They get to sell me their give cards at a discount and I get to buy stuff from Amazon for cheaper. Gold and tulips and coffee and salt and any other good at a fair price, however, are an entirely different story. MMM writes things like currency should not be artificially sparse and should expand. If I buy and hold a share of S&P500 ETF for the rest of my life, I will earn back the share price in quarterly dividends eventually. 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. Definitely not a speculative bubble. Why does bitcoin have to be the winner? 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. I really would hope that MMM doesnt sell out like most social influencers but regardless not understanding the technology is no excuse for spreading fear, uncertainty and doubt about it. Shes allergic to nickel and tin and lead. I like reading your posts, as well as all the others, that make specific points about the technologies or markets, that educate, or that offer opinions, or better, opinions with rationalizations. MentalArson January 3, 2018, 4:34 pm. Mr. Money Mustache talks about his divorce. The only flaw with your fingernail analogy is that most of your devotees would only be too willing to fork over $70,000 for them. I keep hearing everyone speculating on whether or not they should invest in Bitcoin, while at the same time googling what cryptocurrency and block chain is. Yeah we could all gamble our way to FIRE, this week bitcoin, next week slot machines, poker, etc. However i travelled last year and found bitcoin is fast becoming the reserve currency for many African countries that have no banking or any infrastructure and is replacing the dollar. But yes: Bitcoin is silly at current prices. Not only stocks, but real estate and bonds are expensive as well. It doesnt mean they are in bubbles at any price. Now, when that happens, I am ready either way. 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. Meanwhile in China there are multiple football fields sized bitcoin farms. According to the index, the amount of energy consumed by mining bitcoin surged about 26 percent in November alone and now totals nearly 36 terawatt hours, enough energy to power about 3.3 million homes. So now that youve got an truly immutable public data store, what do you do with it? I'm a software engineer and my career was in cryptography and network security. The internet. And btw, just switching currency is not going to remove any debt. I was hoping that when bitcoin futures became a real thing, Id be able to short it in a more normal way. What a bad article. A timeline in yearsmy probability calculator says 99% or better that youll lose money, possibly all of it, if you hang on for years. Adeney retired from his job as a software engineer in 2005 at age 30 by spending only a small percentage of his annual salary and consistently investing the remainder, primarily in stock market index funds. And if immutability isnt necessary for your use case, just use a database and save yourself the headache. Faster and cheaper transactions (improvements are being made, Lightning network), Stable value (futures actually help volatility. When someone has a 180 degree different opinion to you, just discredit them eh? If you want to continue the ride, why not let the original investment of $28,000 ride? Even more troubling, an estimated $11 trillion of government debt now trades at negative yields. BTC wont be the winner but with over 1300 coins the winner has likely been created. Why do you think so? Mr. Money Mustache it is as simple as that. Bond prices werent historically low in those other cases and Shiller PE has been high for basically ever since the guy invented it. as long as people in their consciousness believe it is a store of value it is. January 2, 2018, 6:23 pm. If THAT does happen (BTC=100K), it will prove once more that BTC is not a currency at all. You can give up that wet dream right now. Keep fighting the good fight, Vijay. Also, not all crypto currencies use PoW to mine / verify transactions. Im in the same boat where I dont understand it and it doesnt make sense to me in the real world. January 4, 2018, 7:42 am. And what about physical forms of cash for private sales? Except of course, for all the others. Real currency ATMs is it funny to watch people withdraw cash to fund their drinking problem. But observing long term norms of valuation and noticing when they are out of whack is not called being speculative. As should everyone. Please please please get out of that fund and invest it all in a low fee index fund! Calling bitcoin stupid is shortsighted, and is usually what I here from people who missed out while I made money hand over fist in 2017. Is it possible youre confusing the message of this article? That means an implied 100% cash-on-cash return every year. Sounds like a bubble to me. Watch on. Speculating on bitcoin for this reason only really works so long as there is some new greater fool who joins in on the speculation after you have bought. Video compression tech. Update, three years later: Since I wrote this, the imaginary price of Bitcoin has continued to be all over the map it initially dropped over 70%, then it went back up many hundreds of percent, over and over. My mother in law collected beanie babies and I had the pleasure of looking up their worth this Christmas back hometheyre about $5 each and I will owe eBay 10% + shipping. Great post. Your entire new medium of exchange is part of the black market. For those of us who live in USA and use the USD for our currency, what does it mean to trust that government, which is currently breaching 19 TRILLION dollars in debt (https://en.wikipedia.org/wiki/National_debt_of_the_United_States) while simultaneously reducing its revenue stream (tax breaks for everyone). You made an unsupported claim. The thing that stopped me is that shorting it is a *pain in the ass*. Justin C Its a speculation, pretty much like buying gold. Bitcoin mania isnt different from the dot.com mania or any other mania going back to the tulip mania. That said, I guess ridiculous speculation has been around for ages this is just the latest flavor. Amazing. That is bullshit written on toilet paper by a Private Bank called the Federal Reserve, owned by unscrupulous bunch of elites like your JP Morgan. Bitcoins will never degrade over time, your fingernails degrade. Then the mining ist just looking up data in this table. But maybe an iteration of that will be. Good comments Jon. I dont know if stock prices will go down. I know a lot of people in the DOTCOM bubble in the 2000s that were too focused on maximizing profits and lost most of their wealth on paper after the tech crash. I think its a bit of stretch to call Bitcoin a Ponzi scheme. Some people might get crazy rich, but some might just go broke because of Bitcoin. Een of andere blog . For fun, I try to gauge how bad is the Fear of missing out is and how that corresponds to a peak. There you go. So no surprise thats the first one, especially considering you need it to make the system work at all. Ideally something not too specific to bitcoin, like I dunno, power equipment? Well, shit. The worlds governments are not going to let everyone start trading money anonymously and evading taxes using Bitcoin. Also, a currency should not be artificially sparse. youre supposed to pay taxes on gains in crypto too . Is it speculation, sure, but its no different that speculating on the future price of a stock, or oil, or the rental market. positive change I would say, the world is getting smaller) changes is because it makes things easier. As we know from MMM teachings, safety and security are lies. 15 Replies 10705 Views March 26, 2020, 05:23:27 PM . You have unwittingly tripped up your own argument here. Transactions takes as long as for banks (and soon banks will do trasnfers in seconds too, the real life tests have already started) and cost MORE. (Aside from the threats of force that stem from legal tender laws.). Millennial Boss And just as a warning, I am always going to tell you that price speculation is a bad way to spend your life. Im not an IT guy of engineer so I could be wrong, but the energy issue and the safety issues you mention makes Bitcoin tera incognito for all intelligent human beings. As a result, the benefits of human progress are not reflected in our moneys purchasing power. Started by myrrh. Ryan Thomas Even a war on drugs, which has a physical element, isnt being won by central gov. rollie fingers Mark states he has done this study with no references to any data as to how he arrived at such a conclusion. Bond *prices* are higher than ever today, which is the reciprocal of them having a high yield. I have seen several bubbles grow and then burst, and one thing you learn is that an actual bubble rises like crazy and then totally pops. Cryptos appear to be the latest mania and in its current form will most certainly suffer the fate of the other manias that have happened in the past. . In this way, dollars are the ultimate speculation. February 13, 2018, 5:35 pm. 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. In stating that humans have never had a chance to own their own money you have hit on the essential problem with bitcoin and any other monetary alternative. January 2, 2018, 7:09 pm. Or sell half of GBTC. And even if that was true, there are still many forms of private sales going on everyday where people dont want a traceable form of payment / exchange. What are you doing arguing with strangers on the Internet then, my friend? However when every Joe on the street becomes an expert in an assetthen its suspect and you dont need to be clairvoyant to know that this will not end well. I dont think so. This article is pretty below par in its research and very one sided. The Money Mustache Community Learning, Sharing, and Teaching Investor Alley Our Crypto Investment strategy (slow and steady investing for the win) . I am of the opinion all of Fiat will get wiped out in a decade or two! It will NEVER happen. Sure, China is a renewables leader but it has limits. Noticed this ad on the corner of a website recently because we ALL need daily updates on an obscure piece of niche software technology! Feel free to throw in some early questions. Its rising because people are buying it up, hoping someone else will buy it at an even higher price later. January 4, 2018, 7:28 am. January 4, 2018, 9:20 am. Is the theory that eventually there wont be anymore banks? Why not one of the other 1500 cryptocurrencies? Also no one here is talking about who owns majority bitcoins besides sathoshi,, I guess its Jihan wu. You will also have to pay a fee to transfer from the exchange to your wallet. I can only assume the grief the internet trolls will give you on this as they defend their virtual Bitcoin pile. Then it started falling as people cashed out. Bitcoin is the viral buzzword that has the momentum. Please drop the bullying and come back to join the conversation. Are you saying wisened mustachians own no stock or ETF of any tobacco companies? Ms99to1percent Even if you win some money through dumb luck, you have lost some time and life energy, which means you have lost. They could also plateau until earnings catchup with prices. However EVERY SINGLE BITCOIN TRANSACTION IS PERMANENTLY RECORDED AND TRACEABLE. , Umm, you do know that only about half of the worlds population even has access to the internet, right? We have never in history had such expanding currency supply backed by NOTHING. Use it or lose it. A lot less then the advertisements made for taking those things away from you. Vijay, what MMM is saying is that cryptocurrencies like Bitcoin cannot presently operate as currencies. Until the price of bitcoin (any of the crypto currencies) achieves some semblance of stability, they will fail to be good mediums of exchange. Id like to address each. Sorry, PoF, Im staying away from your Bitcoins until I see a Tweet about the ones filled with chocolate. Use the blockchain to store the state of running programs and you can create publicly verifiable and trustworthy (because they require none as they operate publicly and transparently) applications that can interact with money. January 5, 2018, 8:29 pm. Not everyone agrees, but it cannot, unlike cryptos, be regarded as stupid. They probably also didnt like my stated aversion to cyptocurrency and desire to stick with boring real estate. God speed my friend. Anyway, if your argument were correctwhich it partially isthen you of all people should be against fiat money systems like the US dollar in its current form. Mr. Butler Personally, I think this article shows that Mr Adeney has had his blog hijacked by the Anti-satoshi ;). However, taking a very small gamble doesnt hurt 99% is invested in s&p 500 and that will remain like that :). Nope I am not a skeptic, and also since I was there then (with pre-internet BBS). Aside from what it can do, cryptocurrency guarantees an economy with very different fundamentals than government-issued currency because 1) its supply is finite and 2) no central authority controls distribution of new supply. If you ever want to see what a real bubble looks like, please look at a long term chart of stocksor dollars for that matterpriced in gold. Most of the 1000s of cryptos (and maybe even bitcoin) will fail, but the few that remain will change the world. I was kinda hoping he'd mention if his frugality was a factor or not. So, all of the normal, previous ways of saving have been destroyed & the banks/corrupt bankers get bailed out, over & over & the regular people are sick of it. I believe this is currently the second longest expansion in US history. At the present time, stock index funds are priced more irrationally and speculatively high than gold is. Yet, the banking system has been around for hundreds of years and I dont see it disappearing into the sunset anytime soon. Pure Air and a bunch of IOUs that it will eventually default on. It also has technological demand. I even read about these things for fun, with Simon Singhs The Code Book and the Neil Stephenson novel Cryptonomicon being particularly fun shortcuts to pick up some of the workings and the context of cryptography. that would be a PE ratio of 1. How else should people behave? Have you ever taken a look at how correlated the stocks of an index were? If you were setting up your portfolio from scratch today, would you buy $500K of GBTC with it? He is typing in capital letters to draw attention to specific words. Of course there is value in regulations, too. (Serious question. The paper dollar is anonymous! Nixon just took away the last vestiges of the gold standard. Exchanges and funds get looted (or looted by the operators) all the time. If a good provides value to just one person without hurting anyone else, then it provides value to society. Plus, it costs something like $20 per transaction. (which is more Mustachian..), Michelle, Mr Buffetts advice is clearly correct I mean, its Warren Buffett were talking about. Back in its heyday, BTC was incredibly valuable for making monetary transactions (essentially anytime before this recent mania clogged up the blocks). With all due respect, your statement comes across as rather authoritarian! I dont think attacking how Bitcoin is being used is a good argument because of this. By exchanging dollars or euros for a fee? Inexpensive computers thousands of times more powerful than the best you could buy for $10K in 1990. 3) If you are retired, with enough to last you the rest of your life even in cash, then you have eliminated most risks (market crash etc) but not all- the currency you hold your wealth in can fall greatly. 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. On the other hand, if youre cool with allowing remote-controlled robots to kill 3rd world women and children in your name, then keep using only US Dollars. Thats a lot of electricity that can be used to power 3.3 million homes wasted. There are sure going to be a lot of people gnashing their teeth and rending their garments when the bottom falls out of this market. WHY??? This is why bitcoin was created in the first place. Banks and elites will remain even with Bitcoin, and if it goes your way it will probably the miningfarms and people who collect the most. January 3, 2018, 8:06 am. Again, only in nominal terms. If I lie to you and take your money, thats one thing. >The poorest in Sub-Saharan Africa earns the same money that you sitting in Manhattan, NY do.

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