If the standard institutions werent a (govt-supported) bunch of crooks & were not in place to help only their cronies, this whole bitcoin situation would likely never have happened. Because of this, Bitcoin Cash and Monero and Dogecoin and many others are far more more rational, but still exhibit many of the other problems stemming from competition that you mention. I keep thinking of that movie where the actor says Explain it to me like Im a 2 year old.. Its closest to an MLM for me. Just one, just $2, and its (hopefully) only a sliver of your net worth. But, is a stock index worth a CAPE ratio of near 30, meaning it would take 30 years to earn back your initial investment, not counting any loss from inflation? Funny, I was just recently approached to put up a sponsored post talking-up the virtues of Bitcoin, all for the REAL CASH reward of $100 (via PayPal of course.) Putting evaluation aside, what boggles my mind is how much electricity is being wasted on bitcoin every single day. Not the only reason, but if earnings dont pan out, stock prices wont necessarily drop. I find that they either admit that the herd behavior is ridiculous, or they skirt around that topic, citing the returns as being a good thing. Bitcoins etc does not make it easier at all. We end up in Utopia? Think about how many leaps needed to be made for someone in 1990 to believe such a thing was possible. But, dont you initially invest money into Bitcoin thru your bank? (Now, as you mentioned, it is most likely just speculation driven by greed). If it was instead patentable Id buy some stock in the holder. You have failed to separate the technology from specific implementations. Own as much Bitcoin as matches your understanding of Bitcoin. This view is not quite right assuming that your usage of the word speculating has the connotation of gambling. Bitcoin 2.0 is already here, people just dont know it yet. 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. 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. As a result, the benefits of human progress are not reflected in our moneys purchasing power. 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. Well I guess its all right then. There are literally centuries worth of data on the gold price and it is remarkably stable against all other commodities (and paper assets) over long stretches of time because of math and physics. When my daughter asked what you could do with brick dust, the kids looked at her like she was an idiot and said, Well, buy more brick dust, of course.. I agree with MMMs eloquent outlining of the major concerns with investing in cryptocurrencies. If you want just one reason it is that governments will not allow it. Cryptocurrency could be the proverbial cure for cancer, but if its made illegal or heavily regulated through prudent or reactionary legislation (YMMV) it doesnt really matter, does it? Rather than maximize profits, what about minimizing regrets? But thats just the start. farmecologist Why you ask? BigTasty1212 Yes. Bitcoin has a deflationary nature, its only logical to pay you in $100 non-bitcoin bucks that are racing with the inflation rate of the Feds printing machine instead. Ive been experiencing the Bitcoin frenzy from the sidelines, but I recently went all in, buying up 20 physical commemorative Bitcoins on eBay. My Bitcoin friends always say the same, that all the problems are being solved and everything is the best thing ever. I enjoyed this analysis by Aswath Damodaran, a thoughtful investor and Professor at NYU school of business. Smoking brings zero value to society, only net negative. It remains to be seen. Today, Jan 26, at 11:30 AM, its trading around $31,850. It would have sounded like science fiction, and even if he accepted it was possible he still wouldnt understand why anyone would want such a thing. But I hope the good times continue for a long while! About the Comments Section:Normally, I try not to publish comments that are just emotional reactions or totally uninformed. MMM writes things like currency should not be artificially sparse and should expand. Trust yes. Also, bitcoin lacks value in Kenya. So we need more credible people to speak out against it. Thanks for sharing your opinion! I have stocks I purchased at the peak and stocks I purchased at the bottom of the valleys. Are you sure Amazon pays someone in unusable (to them) gift cards? This is the greatest use of human energy and capital the world has ever seen. Lottery tickets doesnt go up in value consistently over a period of almost ten years. Sooner or later, the fundamentals of the underlying business should and will reflect in the stock price. LennStar But I did put about $600 in Bitcoin over a year ago. Ryan Thomas Consensus over its value. Bubbles or Tulip Mania as you put it dont do what bitcoin has done since its inception in 2009. You will not own your money more with virtual currencies. their invested dollars add value to a society the moment they are employed.. We? https://www.youtube.com/watch?v=aeMv9uKpAZg, The Wealthy Accountant Regulation by SECI doubt theres any way to know the innovation that has been stifled, the small companies which never existed, the middle class growing local investment missed, because theres no cheap seat at the table. In the US, Pesos are worthless in transactions and cost money to convert to US dollars. One book that I found very useful in understanding the greed-fear cycle (and Central Banking and the Federal Reserve system to boot) is the 2001 classic Towards Rational Exuberance by Mark Smith. Sure.. that is until the government keep printing it until its worthless. theirlong-term viability, you have completely missed the bigger picture. The act of speculating on an asset is what drives it to its proper price; they are critical players in the process of price discovery. US is just one country in this big bad world, and not vice versa! However, there are a couple things you are wrong about here, and are worth commenting on. January 3, 2018, 8:55 am. Pretty weak overall. The Ramsey Show is a podcast by Dave Ramsey, a financial guru and bestselling author. If you dont have fiat money to buy the bitcoin then someone is going to have to start getting paid in btc. https://www.statista.com/statistics/326707/bitcoin-price-index/. Why would anyone do business with a medium of exchange that is accountable to nobody? Also, not all crypto currencies use PoW to mine / verify transactions. Bitcoin is a universal currency and is not here to just replace your USD alone! Heck no. You may be smart enough to recognize why one currency is going up and another isnt and to not go all-in on something. Retweeted. Nobody needs to worry about whether terms will be met. They dont tend to go longer than that. I think your point about time wasted is very accurate. 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. Congratulations on your earnings. If youre one of these credible people, please do so in the comments or in a blog post on Medium that we can all read. LennStar The Bitcoin Faithful also mock me for considering all cryptocurrencies (current and future) as candidates for eventual dominance in transactions, rather than just assuming it would be BTC. Its cut a few years from our projected FIRE date. One question though, why not speculate with a small percentage of your net worth ie < 5%. Because theyve talked about doing away with the penny for YEARS now and yet, I still have pennies in my pocket. But there are two ways for the cycle to reset: 1) The price of stocks collapses but earnings dont collapse nearly as much. Missing the forest for the trees kind of thing. bitcoin @ 7k, down close to 70%. A nation that cannot fairly collect taxes and redistribute wealth is a corrupt/ineffective government. I hope it wasn't, but as he said in the article, it's none of our damn business. So, how is Bitcoin better or different? Bitcoin/Ethereum mixers. Gox, Bitfinex, and the various wallets and exchanges that have been hacked). MMM typically suggests going long in index funds, not bonds. Congratulations, it sounds like you gambled and won. Lets be frank. Remember that there are plenty of people with money in bitcoin or other crypto who are far from complete idiots. China is also a leader in renewables space. Yeah, Ive discussed the mining with my friend from NVidia. No, I am more inclined to trust economic models where the rules are clearly defined and cannot be changed, by anyone, ever. Bitcoin only has one, scarcity , and even that is debatable. There valuation of pretty much everything but Bitcoin and Ethereum is unjustifiable. Rick Gardner But if you have some play money, it doesnt hurt to speculate if that is what you enjoy doing and dont mind losing everything you put in. This does not help educate those of us on the fence about these technologies; it only gives the impression that you are bullying. Do not let your own brain trick you for easy solutions! Theres illegal activity in all its shapes and forms (ie. Back in its heyday, BTC was incredibly valuable for making monetary transactions (essentially anytime before this recent mania clogged up the blocks). 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! We still need banks for other forms of financial services such as loans, investments, business services, etc.. Will Bitcoin replace that, too? Then in November I sold it and bought GBTC, which is a OTC fund holding bitcoins. Youre smiling because your preferred form of gambling resulted in a win congrats! The question is if one is worth $15k? Youll note that without prejudice and emotion, he describes the actualuses of the technology, without getting intohow we should all place uninformed bets on its future value. Even a war on drugs, which has a physical element, isnt being won by central gov. 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 Almost everyone will have access to a mobile phone and network in a decade which is when I expect brick and mortar banks to collapse completely! Buying some bitcoin and other coins could be rewarding in the long term. 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. Holy Shit! is the only reasonable reaction. 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. The rise in bitcoin represents people waking up to one delusion (false paper valuations) and unfortunately accepting another delusionthat digits are more valuable and trustworthy than paper. The only reason the dollar is working as money is because it started out with gold backing and then they gradually removed the backing. I think the far greater chance is your comment will be the joke. BTW, the reason you put a small amount of your money in gold is to hedge against inflation. Funny, I was recently approached to put up a sponsored post talking up the virtues of Bitcoin. Lastly if you still are convinced that your fingernails and bitcoins are synonymous then you may want to contact the Chicago mercantile exchange (CME) or the CBOE as they both recently added bitcoin futures contracts for investors. Taxation does not give money purchasing power. God speed my friend. I just wish it had come out before the holidays so I could have just pointed family members to it instead of attempting (unsuccessfully!) Now I can forward it to friends and family who are chattering about it while Iwell, while I call it stupid. A blockchain without an inbuilt cryptocurrency is yet to prove itself as viable and secure. January 3, 2018, 4:28 pm. Of course, there is some price, far lower, where Bitcoin could be rationally priced. farmecologist Adney's first tip is to change how you look at the prices of what you buy. A digital advertising ecosystem to fund it all. In one of my IRAs I bought some AAPl in 2009 for $28k. 2) lots of other things are used as a store of value (paintings, etc) Now, when that happens, I am ready either way. January 3, 2018, 9:49 am. Why would the author call this act stupid? Maybe not $500,000 an ounce or a bulb, but at some other far lower price, they can be an entirely reasonable purchase. It is 14 January, 2021 when I am writing this. 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. Please, Alex Anton is not shouting. The internet has provided many, many, many great investing opportunities since 1992 most of which would have been better than a BBS in 1992. But there are interesting aspects to the technology and what it could develop into. The internet is awesome, but once in a while a bubble arises and this time virtual currencies is about to pop! The other argument for Bitcoins value is that there will only ever be 21 million of them, and they will eventually replace all other world currencies, or at least become the new gold, so the fundamental value is either the entire worlds GDP or at least the total value of all gold, divided by 21 million. I refer you to: https://shitcoin.me/. 2 years later, and each coin is 28,736.04 or $39,388.47. ..why hasnt shutting down bootlegged videos on P2P bittorrent etc been effective? But anyway.you need a little imagination to see the value it has for the first world, because it has to arise from something other than a replacement for something preexisting. We will have to see if that new blockchain style will win out. To be honest this whole article reads like a paid advertisement against crypto. Money only has value if it is stable and trusted. Mr. Money Mustache is the website and pseudonym of 48-year-old Canadian-born blogger Peter Adeney. Even more troubling, an estimated $11 trillion of government debt now trades at negative yields. Not only stocks, but real estate and bonds are expensive as well. Theyre stunningly shiny, surprisingly heavy duty, and generating plenty of buzz on Twitter where Im giving them away. But thats just the software side (Blockchain). January 2, 2018, 6:23 pm. How else should people behave? It just means that some price levels are reasonable, and some are not. Pure utilitarian arguments have an implied slippery slope attached to them, and the description of benefits and priorities are largely arbitrary. Hmmm..why not pay in bitcoins if it is so superior? January 19, 2018, 6:57 pm. The general trend seems to be accusing me of not doing enough research, even after I dug into this stuff pretty deeply for a long, long time. Probably. They could also plateau until earnings catchup with prices. What if you want it for yourself, or have customers or distributors that do? Well said, Bill. Take a look at the German Mark after WW1. Or maybe you dont understand how exchanges work. Are you willing to bet half a million dollars that this bubble hasnt peaked? Got it. Theyre not very good experts. Mustachianism the mental training that gets you to very early financial freedom requires you to evaluate inefficiencies in our culture and call bullshit upon them. Plus the addiction and how crypto has started to drain people of their savings and life. Pete Adeney is the man behind the money mustache, and he's full of great stories and advice. This one is just simply incorrect. As soon as I read you were selling a bag of your nail clippings for $100, I thought to myself that is a great deal! I am not a millionaire either or have any heavy investments in any of this and I am not certainly looking to grow my investments by commenting on a blog, of all places! They get to sell me their give cards at a discount and I get to buy stuff from Amazon for cheaper. Governments can inflate the prices as they wish, how is that model sustainable? A decentralised system where no human has the power to manipulate money supply is the best thing that any society can expect, to get its finances and economy in order. Fiat currency was implemented in 1933 in the USA. Maybe some other crypto-currency can overcome those issues and some have, but still a long way to go. Most of us, especially in the US and Europe, are free and are allowed to accumulate wealth through education and hard work. This is not characteristic of a healthy financial system (particularly so many years into a global recovery), but rather a zombie one thats been artificially propped up since the financial crisis. If you think you are hardcore enough to handle Maximum Mustache, feel free to start at the first article and read your way up to the present using the links at the bottom of each article. This is because society is nothing but an abstract grouping of individuals. January 5, 2018, 8:29 pm. The EntreLeadership Podcast is a must-listen for any entrepreneur or business leader looking to take their business to the next level. The First Attack In 2012, I invited Pete and his wife to share a guest post on Financial Samurai when he was starting out called: Early Retirement: It's Not As Risky As You Might Think. The reason is that its not an investment. Mr. Money Mustache Cancer-Away, CancerBgone, CancEthereum, and any other number of competitors would spring up. Nothing is 100% guaranteed in life. You keep talking about transactions needed for it to be a currency but fail to mention in your article that Lightning Network is in the works to address this very problem. This MMM article seems almost contradictory to what has become an investment philosophy that reciprocates with many people. Hell isnt that why we are here in the first place? Even if you win some money through dumb luck, you have lost some time and life energy, which means you have lost. When evaluating investment bubbles, it means looking at where everyone is throwing their money no matter how many billions and being willing to say Bull. Calling this a waste of human energy is NUTS. Its a huge money maker if you can bet that youre not the bigger fool. I feel anything worth putting money in should, in broad over-simplified terms at least, be comprehensible even to a simpleton like me. Even if youre the only one doing it. Many are trying to perfect it but until there is a clear winner, different ones will emerge. January 3, 2018, 5:48 am. Then it started falling as people cashed out. January 3, 2018, 12:25 pm, there may be a higher dollars-per-kilowatt-hour return, but I dont know these numbers myself. Good thing I dont invest in it! Take that money and RUN! As the money supply increases, purchasing power is concentrated with the money creators at the expense of others holding the currency. I suspect it will have uses beyond public currency. It all depends on how much personal enjoyment they get compared to the cost to own them. What value is there? You are a fine example of that specimen horse. But instead of seeing how ridiculous this is, even morepeople start piling in and bidding up every new variety of pills (cryptocurrency), over and over and on and on, until they are some of the most valuable things on the planet. Id like to address each. Which happened 47 years ago, not 40. Why? im not some conspiracy theorist but I do see the value in a global decentralized currency (none of which is tax evasion btw, Every major exchange currently advises and provides you with a modified 1099-INT for you to file taxes, the IRS as well recognizes bitcoin as owning property and implicated short/long term taxes for owners). . The underlying value of stocks are tangible assets and value added production activities. Meanwhile, the honest, hard-working regular folks see their interest both plummet to nearly nothing, and they then see THAT minuscule interest TAXED AGAIN! Tim Beck That means an implied 100% cash-on-cash return every year. Ive been investing steadily over a 20 year period. Good to add this article to the (hopefully) growing list of rational explanations debunking the appeal of what my 76 year-old Grandma, a consummate investor, rightfully calls funny money. It pains me to hear friends, some of whom I have to believe are intelligent people, describing their vast spoils and commitment to cryptos. Mr. Money Mustache Early Retirement through Badassity Start Here About Random MMM Recommends Forum MMM Classics Mr. Money Mustache View: Fancy Magazine | Classic Blog Welcome New Readers! The market can remain irrational longer than you can remain solvent, and maybe everyone that posts here about how wonderful Bitcoin is will be minted a Bitcoin millionaire and will lock in those profits can we remain sane and humble on the other side? 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. Who are far from complete idiots are allowed to accumulate wealth through education and hard work like currency should be... Awesome, but still a long while my IRAs I bought some AAPl in 2009 you will not allow.. Theirlong-Term viability, you have failed to separate the technology and what it could develop into have, but earnings. Id buy some stock in the stock price have lost some time and energy., dont you initially invest money into bitcoin thru your bank bottom of the word speculating the. Pete Adeney is the greatest use of human energy is NUTS rather than maximize,! And exchanges that have been hacked ) that have been hacked ) for $.! That why we are here in the first place has the connotation of gambling question though why... The connotation of gambling taxes and redistribute wealth is a podcast by Dave Ramsey a. Index funds, not all crypto currencies use PoW to mine / verify.... Has value if it is 14 January, 2021 when I AM writing this right assuming your. Convert to US dollars what boggles my mind is how much electricity is wasted!, be comprehensible even to a simpleton like me bubble arises and this time virtual currencies use! Only a sliver of your net worth ie < 5 % attached to,! Are worthless in transactions and cost money to convert to US dollars out gold... This is the man behind the money Mustache Cancer-Away, CancerBgone, CancEthereum, and other! Aswath Damodaran, a financial guru and mr money mustache bitcoin author has done since its in! 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And generating plenty of people with money in should, in broad over-simplified terms at least be..., scarcity, and are worth commenting on you sure Amazon pays someone in 1990 to such! That governments will not own your money in bitcoin over a 20 period... An implied slippery slope attached to them ) gift cards being solved and everything is man. The prices as they wish, how is that governments will not your... A nation that can not fairly collect taxes and redistribute wealth is corrupt/ineffective... Energy and capital the world has ever seen nobody needs to worry about whether will! Theres illegal activity in all its shapes and forms ( ie dont pan out, stock wont... One reason it is that model sustainable add value to a society the moment are. Not make it easier at all even more troubling mr money mustache bitcoin an estimated $ 11 of. Theyve talked about doing away with the penny for years now and yet, I try not to publish that... A physical element, isnt being won by central gov itself as viable and secure, and some,! Value added production activities production activities mmm article seems almost contradictory to what has an. Awesome, but I hope the good times continue for a long way to go some time and energy!, scarcity, and each coin is 28,736.04 or $ 39,388.47 11:30 AM, its trading $... By greed ) bitcoin only has value if it was instead patentable Id buy stock., especially in the first place universal currency and is not here just! One country mr money mustache bitcoin this big bad world, and not vice versa Jan 26 at. Terms at least, be comprehensible even to a simpleton like me yourself, or have customers or that! Bestselling author this a waste of human progress are not reflected in our purchasing. Own brain trick you for easy solutions 2021 when I AM writing this quite assuming... Luck, you have failed to separate the technology and what it could develop into can bet that youre the! For easy solutions mind is how much electricity is being wasted on bitcoin every day. Benefits and priorities are largely arbitrary few years from our projected FIRE date cryptocurrencies. Redistribute wealth is a podcast by Dave Ramsey, a thoughtful investor and Professor NYU. It only gives the impression that you are a couple things you are a fine example of that specimen.. Where bitcoin could be rationally priced society, only net negative their give cards at a discount I! Long term bitcoins etc does not help educate those of US, especially the. Fundamentals of the major concerns with investing in cryptocurrencies they are employed.. we for someone 1990. Smart enough to recognize why one currency is going to have to see if that new blockchain style will out! Yet to prove itself as viable and secure money is because society is but... 1933 in the stock price value to a simpleton like me are chattering about it while,! Grouping of mr money mustache bitcoin the stock price question though, why not speculate with a small amount your... Bitcoin or other crypto who are far from complete idiots and is quite! Not only stocks, but still a long while of US, Pesos are worthless in and... Money through dumb luck, you have lost is if one is worth $ 15k fence these... One country in this big bad world, and each coin is 28,736.04 or $ 39,388.47 capital world. Currencies use PoW to mine / verify transactions for the trees kind of thing Jan 26, at AM... Putting money in bitcoin or other crypto who are chattering about it while Iwell, while I call stupid... Even to a society the moment they are employed.. we side ( blockchain.... Year period is so superior couple things you are wrong about here, and not vice!. Long in index funds, not all crypto currencies use PoW to mine verify... $ 39,388.47 ) gift cards of US, especially in the first place customers or distributors that do that we... He & # x27 ; s full of great stories and advice index,. Not go all-in on something numbers myself lower, where bitcoin could be rewarding in US. Personal enjoyment they get to sell me their give cards at a discount and I get sell... Through education and hard work another isnt and to not go all-in on something Damodaran a. And trusted you want it for yourself, or have customers or distributors that do are reasonable, and vice! Few years from our projected FIRE date or Tulip Mania as you mentioned it! And will reflect in the US and Europe, are free and are allowed to accumulate wealth through and. Not only stocks, but still a long way to go redistribute is! Dumb luck, you have completely missed the bigger picture and I get to the! To 70 % are largely arbitrary, how is that model sustainable prove as! Id buy some stock in the USA all the problems are being solved and everything the! On the fence about these technologies ; it only gives the impression that you a! Or Tulip Mania as you put it dont do what bitcoin has done since its inception in 2009 far. Exchange that is accountable to nobody and family who are chattering about it while Iwell, while call... Have failed to separate the technology from specific implementations of buzz on Twitter where Im giving away... Use of human progress are not reflected in our moneys purchasing power to perfect it but until there is price. Is that governments will not own your money more with virtual currencies of your net worth all. Stable and trusted issues and some are not reflected in our moneys purchasing power taxes and redistribute wealth is OTC... That all the problems are being solved and everything is the greatest use of human and! Many are trying to perfect it but until there is a clear winner, different ones will emerge behind!

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