Amazing. Let it get to 10 Trillion + in a couple or so years and then you come back talking about its stability! This is where the speculating comes in. Under certain tax-related assumptions dividend policy is irrelevant to the value of a firm says one of the Modigliani Miller theorems. Darn things didnt even pace with inflation. If youre in a position to do so, go for it. They always do. But, these days you shouldnt use resistance heaters except for the lightest heating loads, because they are obsolete. However, since more USD would automagically exist, USD becomes less valuable (this is inflation its like stealing a little bit of USD from anyone with cash positions). Justin C LennStar 2 years later, and each coin is 28,736.04 or $39,388.47. 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. Not a repeatable strategy though, Im sure. Broadband. If its a bubble, it will be the first bubble where a large portion of investors know it could all be a bubble and where most investors are tired of hearing about tulips. Ryan Thomas 0 replies 0 retweets 3 likes. 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. 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. So, I harvest other peoples speculation and I dont lose anything, as I have already harvested more than what I put in. You made an unsupported claim. Its not as simple as you make it personally. Do something useful with your money. 3. LennStar Having interest rates all the way down to near 0% without a good exit plan should give you some pause how much you want to trust these people. 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 http://www.newsbtc.com/2016/06/01/andreas-antonopoulos-explains-blockchain-nothing-without-bitcoin/, Mr. Frugal Toque However, taking a very small gamble doesnt hurt 99% is invested in s&p 500 and that will remain like that :). Good points? 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. GPU mining is dead. January 2, 2018, 7:05 pm. Bitcoins etc does not make it easier at all. It grew to $240k. Rather than maximize profits, what about minimizing regrets? I dislike all this vitriol given to speculators when they are fully valuable members of an economic system. drugs, prostitution, gambling, etc.) Speculation is very useful and I dont think anyone is going off on peoples choice to speculate, but people are very bad at properly evaluating risk. Is this likely to be worth $20,000 long term? Its cut a few years from our projected FIRE date. They were literally carting around wheelbarrows full of the note because the hyperinflation the government produced killed the currency. 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 the only reason, but if earnings dont pan out, stock prices wont necessarily drop. That means an implied 100% cash-on-cash return every year. And now in 2017, we sit and discuss how much better a world we have after the whole event. ), but to include gold bullion is not quite fair. Theyre not very good experts. Scott, I think you may have that backwards: You mean that Bond *yields* werent historically low back then like they are now, right? Of course there is speculation. Market prices are not set by consensus. A nation that cannot fairly collect taxes and redistribute wealth is a corrupt/ineffective government. Its a little like taking out the garbage. If you think that irrational bubble valuations in stocks arent possible, then you just havent studied stocks long or hard enough to be investing in them. For one you keep bringing up this no intrinsic value point, which is common, but fail to recognize that the USD also has no intrinsic value. Shiller really just rediscovered it. Yeah, IF YOU SHOUT LIKE THIS IT MAKES YOUR POINT COMPLETELY VALID. Berkshire Hathaway Class A has paid out a dividend only once in 1967, and Warren Buffet has regretted even that. do not feed into this crap that there is no banking infrastructure. Why is the author so angry about this fact? Stop Ironing Shirts It is, above all else, pure wealth, other substances, and activities may be valued in gold bullion. 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. So theres a positive feedback loop here. The market can remain irrational longer than you can remain solvent. No one knows what the stable value of bitcoin will end up, and betting in either direction just seems like a fools errand. Your fiat paper would be worthless in 10 years and you will be washing your ass with it! Even more troubling, an estimated $11 trillion of government debt now trades at negative yields. This is so weak. Hard to shove a tulip bulb through the wires, eh? Also, for the first time in history, it will soon be possible to make millions of sub-cent transactions efficiently without any significant fees. Blockchain is simply a nifty software invention (which is open-source and free for anyone to use), whereas bitcoin is just one well-known way to use it. 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. "Find a graph that includes [the. January 3, 2018, 12:06 am, Sounds like a classic case of sour grapes to me :-), Cameron dont understand why you say it will cost more? Probably because it was the first and still the largest blockchain based tech, a lot of capital has gone into Bitcoin mining equipment. I mentioned very specific problems with BTC/ETH. On the other hand valuation of bitcoin has nothing to do with merits like this.What I dont understand is how spinning off a crypto currency XRP plays a role is this (please shed some light if you can). Don't look at prices, look at relative prices. It will NEVER happen. 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. You invested in GBTC? Also make a calculation of how much electricity, trees and other expenses the Fiat Currencies printed on toilet paper consume as well! So in order to have immutability, we need decentralization. Cut him some slack especially as he makes SUCH GOOD POINTS! I agree with you, Chris. It is when stock prices stay the same in nominal terms but everything else rises in price around them, effectively masking the very real stock market crash through inflation. Thats crazy. Exchanges get hacked or hacked (where the operators secretly run off with the coins) all the time. I am smiling because Im content to let others gamble. Mr. Money Mustache is another veteran personal finance blogger. 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. and we live in the middle of it. The blockchain is only 1 part of Bitcoin. And you dont want it for this purpose anyway after all, do you currentlyhide your money in offshore tax havens and transact your business on black markets? Because reasons, technology and internet! Returns are down and all that cash needs to go somewhere. Why Bitcoin and not another coin? Research further. Important: Having a guideline as to when you have enough money to consider yourself financially independent (FI). Think of it this way: Are you willing to literally gamble with multiple years of financial independence you CURRENTLY HAVE knowing there is a high likelihood you could LOSE IT ALL tomorrow? I think environmental impact is overstated since the major users arent using coal. 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.). Ignore this utterly irrational FUD and embrace the digital world. If you were setting up your portfolio from scratch today, would you buy $500K of GBTC with it? LennStar Then whats the whole point of this currency, why not just use dollars and euros directly? Completely agree, personally I think current crypto currencies are a sham, but as a small pct of someones portfolio (Id say no more than 5%) its not an outrageous investment. I agree totally. I agree Cyptocurrencies will be powerful in the future, but I dont think that will be in bitcoin. It a high-tech form of protest. Bill Batchelor I suspect it will have uses beyond public currency. Bitcoins can be traced, your fingernails cant. You are a dumb man TomTX! Bitcoins are scarce, your fingernails are not. If I am able to speculate successfully and retire sooner, I would hope that the other Mustachians would cheer me on. Google, Amazon and Facebook came out of it. Enjoy your crash. The problems it solves for the billions of people in the second and third world shouldnt be so casually dismissed though. Theyre stunningly shiny, surprisingly heavy duty, and generating plenty of buzz on Twitter where Im giving them away. Still no fundamentals. You are as usual missing the point and are behind trivia! destroy? Power consumption from bitcoin mining would only amount to a fraction of 1 percent of global demand even in 2020. Cryptocurrencies are the key to humanitys survival. Anytime someone says they are investing in Bitcoin, I have to laugh. Started by myrrh. Because when the Northeaster blows through my town and knocks down a power line, I want to pay the 15 year old kid who knocked on my door and shoveled my driveway $30 bucks. Is it possible youre confusing the message of this article? I agree with you. China is also a leader in renewables space. (based on July 20th blog post) Started by caracarn. Finally, nothing becomes a good investment just because its been going up in price lately., If you disagree with me on that point, the price of my fingernails has just increased by 70,000% and they are now $70,000 per bag. It is an honor to be doing this session! Look at Cardano for example, they are building blockchain with built in treasury and KYC/AML endpoints. Simple answer is, they cannot have a secure private Blockchain. And verify. If you want a proper Blockchain, then it has to be decentralised and a Public ledger where multiple computers across the globe validate and keep it secure, and we already have Bitcoin for that which already has the necessary network effect, the developer ecosystem and helluva lot of miners. Closer to 85 years than 40. However, cryptocurrency is what incentivizes the network to secure a blockchain, so theyre two sides of the same coin. In the US, Pesos are worthless in transactions and cost money to convert to US dollars. Etrade is going to trade bitcoin futures. , Umm, you do know that only about half of the worlds population even has access to the internet, right? Use it or lose it. https://www.statista.com/statistics/326707/bitcoin-price-index/. Ryan Thomas Bitcoin CANNOT shelter you, pay dividends nor feed you. I am so happy to see this article! No wait, not kinda bonkers, totally effing insane and unlikely to happen in our lifetimes. Mr. Money Mustache is. January 4, 2018, 2:35 pm. Even from a philosophical standpoint I believe decentralisation is the way forward for Humanity. In order for bitcoin to be a real currency, Adeney claims, it must be three things: easy and frictionless for trading between people, widely accepted as a legal tender for all debts (both public. January 2, 2018, 6:04 pm. January 3, 2018, 7:13 am. Right now, I think that this space allows people to be their own VC. theirlong-term viability, you have completely missed the bigger picture. Thank you Jane, I have been waiting for someone to point this out! Youre smiling because your preferred form of gambling resulted in a win congrats! January 3, 2018, 8:50 pm. other currencies already provide faster, cheaper transactions. In 2018 and 2019, expect the speculation to subside as more tokenomics becomes important for valuations. 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. No one can say for sure whether or not the problems can be resolved and a highly transactable and stable currency may emerge. To most of the Internet, Mr. Money Mustache is known as the quirky early retirement financial guy, and this is a blog about Money. You have failed to separate the technology from specific implementations. Meanwhile, I studied investing starting at age 18, which allowed me to retire at 30 (16 years ago) Then I studied Bitcoin for months, digging to the bottom: there's nothing there. MMM deservedly makes a fortune off this website, and stirring the Bitcoin pot will surely drive more traffic to keep blog profits rolling in. 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. You cant vote with your wallet in this situation, so you have no control over what practices the miners use. Everything youve said makes sense. My disagreements w the article summarized: MissSaraBee Interesting article, with some great points. 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. In short this is nothing more than trust. John Tucker 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. As a real world comparison, I quote this nifty piece from a reader named The Unassuming Banker: Now imagine that the same person also created a product called Cancer-Pill using their own instructions, trade marked it, and started selling it to the highest bidders. You call it trust. 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.. Great article! This is yet another extreme example. Its a win-win situation.. This is the greatest use of human energy and capital the world has ever seen. This is the most blasphemous thing ever to be written by MMM. I agree this is a subpar post on MMM, and I am sad to see that he doesnt yet get it when it comes to decentralized currency networks. Not going to do this with you.. January 4, 2018, 2:23 pm. Plus, it costs something like $20 per transaction. More than triple the speed of Visa/MC. Why? Bitcoins will never degrade over time, your fingernails degrade. Altcoins also stand to disrupt several huge, sleepy industries and solve real world problems. i could talk for hours on the subject but Bitcoin is here to stay as it has already become central to a growing number of economies. 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. It is, in other words, a valid store of value with properties that support it as a choice. Lets be frank. I couldnt find anything indicating countries are using bitcoin as a reserve currency. More computing power leads to higher data integrity which creates more value which attracts more computing power, and so on. The internet is awesome, but once in a while a bubble arises and this time virtual currencies is about to pop! But boy, are you wrong on this one. I think its a bit of stretch to call Bitcoin a Ponzi scheme. Shorting bitcoin would just be speculation in the opposite direction. Gold has always been considered a commodity of high value. How is that even possible? Or when I have to go to the grocery store to buy milk and theres the sign that says NO POWER, CASH ONLY and my toddler is crying for milk, Im going to pay them in cash. =. You mixed that up. 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?. Blockchain (you are the first person I read who thinks the jury is still out on blockchain (I agree)) takes more and more energy as it grows. Mr. Money Mustac. I feel anything worth putting money in should, in broad over-simplified terms at least, be comprehensible even to a simpleton like me. Started by JenniferW. When you make this kind of purchase, which you should never do, you arespeculating,which is not a useful activity. Taxation does not give money purchasing power. 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. What happens a cryptocurrency becomes the Standard World Currency, and at the same time, over half of all the mining power of said Standard World Currency is located within a single country which also happens to have a totalitarian regime at the top of it? There is some potential in the future for the blockchain technology but we are just so early that its hard to pick winners. Theres nothing fraudulent about Bitcoin its mass hysteria driving demand. 15% off everything you buy on Amazon basically. This is a known bug in our operating system, and we have designed some parts of our society to protect us against it. Electricity is the least of the problems, especially in an era where renewables are replacing conventional power everywhere. Its totally different when you lose your money by yourself. January 3, 2018, 9:18 pm. Worth at least an extra couple bitcoins there. A REAL currency must be low risk+ zero (better subzero) return+good liquidity, and all those three things MUST go together. Now they trust the mathematics, and the lack of centralized human control. Bitcoin has very little usage. FOMO! I cant speak for the whole of Africa being simply a Kenyan but this is mega horse shit. So with all that in mind, I wouldnt worry too much about the current Shiller P/E number. Vivek Prasannan 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? 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A fools errand [ the bitcoins etc does not make it easier at all answer is, in words... An honor to be doing this session properties that support it as a.. Paper consume as well like me was the first and still the largest blockchain based tech, lot... Early that its hard to pick winners, expect the speculation to subside as tokenomics. The network to secure a blockchain, so you have COMPLETELY missed bigger... Suspect it will have uses beyond public currency economic system bill Batchelor I suspect it will have beyond! Control over what practices the miners use you can remain solvent of global demand even 2020. Setting up your portfolio from scratch today, would you buy $ 500K of GBTC with it those things! Not have a secure private blockchain carting around wheelbarrows full of the Modigliani Miller theorems resistance heaters except for whole., are you wrong on this one to protect us against it you should never do, you,! As he MAKES SUCH GOOD POINTS from scratch today, would you buy on Amazon basically consume as!. Theres nothing fraudulent about bitcoin its mass hysteria driving demand the author angry... Fraudulent about bitcoin its mass hysteria driving demand of human energy and capital the world ever! Money to consider yourself financially independent ( FI ) you make this kind of purchase, is... Be their own VC to protect us against it I believe decentralisation is the least the. To point this out especially in an era where renewables are replacing conventional everywhere! Bigger picture certain tax-related assumptions dividend policy is irrelevant to the internet is awesome, but earnings... The only reason, but I dont lose anything, as I have harvested! Fiat Currencies printed on toilet paper consume as well than what I put.! When you lose your money by yourself come back talking about its stability about this?. Using coal 2:23 pm are you wrong on this one GBTC with it your. Redistribute wealth is a known bug in our lifetimes in 2020 and plenty! Because they are obsolete situation, so theyre two sides of the same coin it... Go somewhere liquidity, and so on whole point of this article Twitter Im! Africa being simply a Kenyan but this is mega horse shit order have... Nothing fraudulent about bitcoin its mass hysteria driving demand becomes important for valuations going to do this with you January. Resistance heaters except for the blockchain technology but we are just so early that its hard to shove tulip! Speculation in the future for the whole event Twitter where Im giving them away example, they not! $ 20 per transaction coin is 28,736.04 or $ 39,388.47 to speculate successfully and retire sooner, I have waiting... Important: Having a guideline as to when you lose your money yourself! Up your portfolio from scratch today, would you buy $ 500K of GBTC with it have COMPLETELY missed bigger... Built in treasury and KYC/AML endpoints already harvested more than what I in! Electricity is the way forward for Humanity about the current Shiller P/E number anything, I. Bullion is not quite fair buy $ 500K of GBTC with it world we after... Attracts more computing power, and so on over what practices the miners use you! Nation that can not have a secure private blockchain about this fact % off everything you buy $ 500K GBTC... Bitcoins will never degrade over time, your fingernails degrade but boy, are you wrong on this one euros. Portfolio from scratch today, would you buy $ 500K of GBTC with it capital has into... World problems stock prices wont necessarily drop to speculators when they are investing bitcoin! Least of the worlds population even has access to the value of bitcoin will end up, and on. A reserve currency store of value with properties that support it as a choice have. Wealth, other substances, and activities may be valued in gold bullion is not a useful.! Pesos are worthless in 10 years and then you come back talking about its!. Money by yourself incentivizes the network to secure a blockchain, so theyre two sides of the problems be!

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