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. Darn things didnt even pace with inflation. positive change I would say, the world is getting smaller) changes is because it makes things easier. PS. Here's the one I like: 25x the annual amount you spend/4% of your assets. I was thinking that the primary beneficiaries of the current bubble are likely the drug dealers, money launderers, and other criminals that hold bitcoin for actual business transactions. That in turn creates tax revenue, prosperity in a worrying economy for peoples investment portfolios, etc. Ms. Frugal Asian Finance So I also read a lot about investment bubbles and fundamentals and how to tell those apart. 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. Also, for the first time in history, you can create digital collectibles that are unique and non-replicable, just like my Wayne Gretzky rookie card which intrinsic value is about 1 cent of cardboard and ink, but which market value is in the hundreds (but that must be a bubble too). But thats just the software side (Blockchain). 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. OK Vijay but then why do you and others get so angry when some of us say we dont want to invest in it? Not a repeatable strategy though, Im sure. Not going to do this with you.. 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. The problem with most folks here is, if you really want to know Bitcoin you have to Know Computing to really appreciate what this is all about. If THAT does happen (BTC=100K), it will prove once more that BTC is not a currency at all. Tulips. https://t.co/wfi8XTq77s" Im not sure there is suggestion from MMM that cryptocurrencies are fraudulent or indeed even a scam. This is the most blasphemous thing ever to be written by MMM. I guess Petes point here is that block chain protocol has benefits but bitcoin is stupid. Those Adults you referred to in your article had the trust and lost it with their actions. Like every state currency, it derives its worth out of the fact that the state says you can *always* pay your taxes with it About the Comments Section:Normally, I try not to publish comments that are just emotional reactions or totally uninformed. Hearing about every move Bitcoin makes is already more annoying than hearing about the DJIA ever referred to(when we have the S&P500). The reason that people have never owned their own money as you inelegantly put it, is because there is no full faith and credit under this model. You would be one of those skeptics who in 1992 would have said Internet has no future because its present bandwidth cannot even handle an attachment over email! Its not an investment. So when I invest in bitcoin, Im not betting that itll replace dollars anytime soon. Higher energy usage in China means that the nasty, killing coal plants stay online longer. Most of us, especially in the US and Europe, are free and are allowed to accumulate wealth through education and hard work. Is the logical conclusion to short a mania or stay on the sidelines? I think I found the mistake in your reasoning. Looks like I made a big mistake then. Its also dispatchable, which means the generator power output be turned on and off extremely rapidly to meet need. Real investments require production and income. Read through this article for the contrarian view of things: https://seekingalpha.com/article/4134745-bitcoins-path-1-million-bubble-bursting-anytime-soon, Mr. Money Mustache Most pass of judgements without leaving their cushy little towns in the middle of nowhere in the US! Maybe a couple years from now when the mortgage is paid off and we have some play money/money we can afford to lose. Definitely not. An investment is something that has intrinsic value that is, it would be worth owning from a financial perspective,even if you could never sell it. I just dont understand the new economy. This does not help educate those of us on the fence about these technologies; it only gives the impression that you are bullying. Remember 2008? Your risk is your own, but understand that bitcoin is gambling. Why? I buy a stock with the expectation that the company will perform and the value in the future will be higher than it is today. But yes: Bitcoin is silly at current prices. Bitcoins are scarce, your fingernails are not. Id love to see MMM fingernail futures one day on my ticker chart. Overall, it is just as likely to go up as it is down, especially in the near term, and is best to avoid all together unless you just love gambling and dont care about losing money. Taxation does not give money purchasing power. Its like Winston Churchill said: Gold is the silliest, most irrational thing you could ever use as money. Im in the same boat where I dont understand it and it doesnt make sense to me in the real world. Me personally, Im betting on the buck. also look at russian, venezuala and Argentina for more proof of bitcoin. Same wishes to you on your toilet paper fiat money my friend. First: cryptocurrencies have not demonstrated lack of manipulation. Because it is. Monetizing debt and inflating the monetary supply is eroding our purchasing power and wealth. Why does bitcoin have to be the winner? Same with internet search: remember AltaVista, Lycos, Dogpile? (I may buy some to pay my day to day expenses, but I try to minimize the %age of my net worth sitting in cash. MentalArson Our Banker friend goes on to explain that the first Cancer-Pill might initially see some great sales. Government-issued currencies have value because they represent human trust and cooperation. The alternative is front-loading energy consumption in maintaining a currency with predictable fundamentals on top of which society can run. All these ICOs are just insane. Gotta! Real currency ATMs is it funny to watch people withdraw cash to fund their drinking problem. What you are describing is called a silent crash. There is some very interesting technology being developed in the cryptocurrency space right now, so be careful about throwing out the baby with the bath water. Back it up, or youre just another nutjob. So, how is Bitcoin better or different? People are genuinely mad at me for calling out this speculative aspect (note that I did not criticize blockchain at all, just the idea of uninformed people betting on future price increases for the arbitrary coins). 1 Replies 290 Views February 10, 2023, 05:55:08 AM . Sorry for commenting again but the farms will not give you money or distribute it to those who cannot afford. January 10, 2018, 11:01 am. Is this likely to be worth $20,000 long term? Blockchain is just a computer protocol, which allows two people (or machines) to do transactions even if they dont trust each other or the network between them. Even if they made a hundred trillion dollars next year, you wouldnt see any of it unless you sold your stock to someone willing to pay a higher price for it (or they started paying dividends). Mr. Frugal Toque Bitcoin is used for some pretty awful things, the accountant at my dads prior employer stole $500,000+ and likely hid it from the authorities. MMM calls Bitcoin Stupid and all these things as some kind of Ponzi Scheme! You could recreate your AAPL stocks again if you want and still keep the rest in GBTC? Human Kind has never had the opportunity to truly own their money ever, and Bitcoin and Cryptocurrencies are the first time we even have that opportunity. These are all things that people have bought in the past, and driven to completely irrational prices, not because they did anything useful or produced any money and value to society, but solely because they thought they would be able to sell them to someone else for more in the future. This volatility thing that seems to be biting you folks is because Bitcoin is at 200 Billion capitalisation today. 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. Videos of Andreas Antonopoulos on Bitcoins in Youtube. The potential upside outweighs the risk of the initial cost. I did Control F, and verified that MMM never used the word Ponzi or Pyramid, and in fact Vijay, you were the first person to bring up the Ponzi Scheme topic, and then you linked some article (which I did not care to read). Just one, just $2, and its (hopefully) only a sliver of your net worth. Yeah, IF YOU SHOUT LIKE THIS IT MAKES YOUR POINT COMPLETELY VALID. We plan to spice up our investments then, we will have $90K/yr extra to invest and wont mind taking maybe 10% of that and play/gamble with it :-). But boy, are you wrong on this one. Start (or have) a company that produces and sells something people actually buy. Dont know if youve seen JP Searss satire of Bitcoin but I think you might appreciate it. January 3, 2018, 9:04 pm. dont understand why you say it will cost more? 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. I dont think so. Silicon Valley is out to eat Wall Streets Lunch and this tech will defy all ideas of finance that have come before. I am already looking forward to looking back and laughing at all the companies who did away with their normal businesses to become mining companies. The worlds governments are not going to let everyone start trading money anonymously and evading taxes using Bitcoin. Thats a lot of electricity that can be used to power 3.3 million homes wasted. 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! As such, its an awful means of trade. 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. The real test of if you should be a cryptocurrency supporter:would you be exactly as passionate and spend the same amount of time thinking about it,if Bitcoin were still an obscure piece of code, worth less than one cent, and offered no chance of ever earning you any money? 2 Billion unbanked people on the planet to also enjoy a level playing field through this new Internet of Money. No. If not, you may want to think about selling., Scott Nicholson Its a win-win situation.. Anyone whos ever had to wire money between banks will appreciate the quick transaction times and low (or zero) fees of these coins. He said Bitcoin is stupid and speculative. I have been to Greece, and would advice you to go to some such place to understand what happens when fiat currencies die. Dit is je geld nu waard als je een jaar geleden Bitcoin, goud of andere assets kocht. Justin, you are falling for the WhatAboutIsm tactic that makes false equivalence. This is not going to happen. One of my coworkers at MMM-HQ works for nVidia, and part of his job is hunting down mining thieves who comandeer virtual servers (cloud computing) to mine coins on their behalf. 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. Westerners will not see the benefit for sometime as we have no purpose ourselves for bitcoin but once it becomes a single global currency that can be used in every shop of the world then everyone will be holding bitcoin. Unfortunately for most people that think they are missing out on everything, they are being lead to Coinbase and only buying the cheapest tokens available, namely Litecoin because Ethereum and Bitcoin have gotten so expensive. So we need more credible people to speak out against it. Probably, but I dont care. Tim Beck Glad to see some sense being written to the red necks who seem to inhabit this blog! The problems it solves for the billions of people in the second and third world shouldnt be so casually dismissed though. November 20, 2018, 12:00 pm, so other storage is NOT needed sorry, my phone likes to randomly delete words, Tor Kristen Haugen January 14, 2018, 1:05 pm, https://en.wikipedia.org/wiki/Foreign_exchange_market. Bitcoins can be traced, your fingernails cant. 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. Noticed this ad on the corner of a website recently because we ALL need daily updates on an obscure piece of niche software technology! January 3, 2018, 8:06 am. Mr. Money Mustache is a thirty-something retiree who now writes about how we can all live a frugal, yet awesome, life of leisure. In fiat currency the car is valued at $41,940, but 18 days later, the car is valued at $31,850. Is it likely worth closer to $0 than to $20,000? Finally, someone in here who understands economics and not just personal finance! Sure.. that is until the government keep printing it until its worthless. In other words, if you truly need it to buy stuff, and thus you need to buy coins from some other person in order to conduct important bits of world commerce that you cant do any other way. With the rampant corruption on wall street is it really a surprise that the people wanted a decentralized currency? Do you think Governments and Regulators have sat on the sidelines so far while Bitcoin is just exploding to a point that MMM had to sit and write a huge article? Youre not going to get rich by collecting metals, but you might stay rich with them. Ryan Thomas That said, I guess ridiculous speculation has been around for ages this is just the latest flavor. I have stocks I purchased at the peak and stocks I purchased at the bottom of the valleys. Maybe some other crypto-currency can overcome those issues and some have, but still a long way to go. Scott, I think you may have that backwards: You mean that Bond *yields* werent historically low back then like they are now, right? January 3, 2018, 7:36 am. And nothing that can go on forever, does. January 19, 2018, 6:57 pm. Now I can forward it to friends and family who are chattering about it while Iwell, while I call it stupid. Do I trust the people at the federal reserve that helped cause the 2008 crash and didnt call it beforehand? When we talk about Bitcoin, or Ethereum or any other digital coin, for that matter, neither ponzi nor pyramid are perfectly accurate descriptions for how these systems actually work., The cryptocoins represent a new kind of scam, a Nakamoto Scheme: https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/. I own my currency as it is today (EUR and USD), how come you do not own yours? While some businesses have established arrangements whereby you can pay for some goods or services using cryptocurrencies there appear to be a novelty by and large. Youre confusing outcome with process. If it goes poorly you might not a few months off your FIRE date but if it goes very well it could knock off a year. Is having 1-2% of my overall portfolio in cryptocurrency stupid? No, not to me. The Ramsey Show is a podcast by Dave Ramsey, a financial guru and bestselling author. Seeing ATMs shows that it is slowly on the cusp of becoming more widely adapted and accepted. Be careful what you wish for. There are many prices where gold or tulips are a totally rational purchase. If youre in cryptos early, that difference skyrockets in favor of cryptos. And wasnt Apple Pay and all these other card-less apps of paying for goods and services supposed to replace carrying around a physical wallet and/or cash? 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. Closer to 85 years than 40. Then you are in at twice the actual price of Bitcoin. Well, imagine you are in 1963 and you hear the speech I have a dream from Martin Luther King on abolishing slavery and you ask the question Why do you think this will happen?. January 3, 2018, 5:30 pm. Mr. Bitcoin (aka CancerPills) has become an investment bubble, with the complementary forces of Human herd behavior, greed, fear of missing out, and a lack of understanding of past financial bubbles amplifying it. If that money is a key component to your wealth and retirement plan, you may want to consider something with a little less volatility. I enjoyed this analysis by Aswath Damodaran, a thoughtful investor and Professor at NYU school of business. (see: Long Island Iced Tea Corp. becoming Long Blockchain Corp.). Its the last one! The sooner we debunk the myth and come to our senses, the richer our world will be. That is why I also invest in government bonds. In the mean time, Ill keep selling the bitcoins that I purchased for $30 each at $15k a pop. About purse.io: Do you have to pay the transaction fee to deposit the BTC to escrow? but fail to recognize that the USD also has no intrinsic value. Speculation is fine, as long as you are using only money you are willing to lose. The bubble crashed and the internet didnt die. You sound like I poop-obsessed wing nut. Couldnt have said it any better myself. Just because the recent past has been good times doesnt mean it will stay that way. So for it to be a global currency taco bell is going to have to start paying kids in btc. In my personal opinion, Bitcoin just seems like another form of a financial institution that is trying to say its not an institution when it walks like a duck, quacks like a duck so it must be a bank, no?! 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