Why you ask? Sure, China is a renewables leader but it has limits. Its only valuable when you cash it out to a real currency again, like the US dollar, and use it to buy something useful like a nice house or a business. 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. I was so sad that I missed out again ;). Pete and his wife retired at. Its funny reading your article because while Im a true believer in bitcoin as the internet of money, I feel pretty much the same way as you do about 99% of the rest of crypto. It is an honor to be doing this session! Absolutely, so Ill proceed with it. 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. Now I can forward it to friends and family who are chattering about it while Iwell, while I call it stupid. Broadband. I could only shake my head. There are no financial instruments that will protect you from a world where we no longer trust each other. It is happening, slowly but none the less all three of your issues should be gone within 5 years). If that is the case, their values are strictly driven by speculative bidding, making them the worst sort of investment. This puts USD straight into the bank the Federal Goverment and allows paying of debt. GPU mining is dead. It is 110% of your total and entire GDP, and that is just your Federal Debt. You made an unsupported claim. Yes, you can buy index funds with fiat money and not with Bitcoin. ), bastringue Jay Holden A stock is a share of an actual company, bound by rules and regs (however imperfectly administered, at least they exist). Also, I wonder the extent of whispering in their ears & kick backs they could/likely do get. This idea that you HAVE TO OWN ONE FULL BITCOIN is madness. You could always follow the Long Island Iced Tea model: 1. 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. The kids pulverize the bricks to make brick dust, which is the most valuable currency/commodity in their forest kingdom. Even if you are the only one in the room willing to do it. It needs to expand with the supply of goods and services in the world, otherwise we end up with deflation and hoarding. Barak PazTal Ten years later and the price is still nowhere near that prior high, with it currently trading around $60. Remember 2008? Keep plenty for yourself. But with 6-7 big mining players who dictate which fork of bitcoin to mine, the value of BTC or BCC or Segwit or whatever else comes, I have no faith in the value of BTC. Take a look at this shot from the website coinmarketcap.com, and observe the preposterous herd behavior in real life: Fig.1: Various cryptocurrencies, ranked by how many people have been fooled. Your highly emotional responses arent helping your case. This MMM article seems almost contradictory to what has become an investment philosophy that reciprocates with many people. The market can remain irrational longer than you can remain solvent.. As has the MMM investing sub-furum. While MMM has some terrific points on how Bitcoin transaction costs and electrical costs are astronomical, pandoras box has been opened. Pure Air and a bunch of IOUs that it will eventually default on. Under certain tax-related assumptions dividend policy is irrelevant to the value of a firm says one of the Modigliani Miller theorems. Mr. Money Mustache is another veteran personal finance blogger. 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 response was amazing and, unfortunately, there were simply to many to include them all. So I also read a lot about investment bubbles and fundamentals and how to tell those apart. Second: Human nature actually tolerates a *lot* of corruption in exchange to stability, so I dont think well be switching over to this science fair project any time soon. I think the far greater chance is your comment will be the joke. But I hope the good times continue for a long while! They probably also didnt like my stated aversion to cyptocurrency and desire to stick with boring real estate. Totally agree about cryptos- but not sure gold should be lumped in with them. We will have to see if that new blockchain style will win out. Ryan Thomas One way or another, at some point, the cycle will end, and the cycle will start again. To compare with fiat currency, we need to consider fiat currencys rippling effect on society. Remember there was social media before Facebook. To keep things non-promotional, please use a real name or nickname(not Blogger @ My Blog Name). 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. When everyone is on the train and praising it like it is the next coming of Jesus or whatever? January 19, 2018, 6:45 pm. 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. So owning gold is not insane at a reasonable price. Marketed to unsophisticated investors as a get-rich-quick scheme. They are very valuable and the price is sure to rocket! 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. Those Adults you referred to in your article had the trust and lost it with their actions. Redirecting to /r/mrmoneymustache/comments/mz1sma/thoughts_on_mmm_why_bitcoin_is_stupid/h094ynt (308) I could definitely sell these for more later. 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. How much are these companies worth today? It is 14 January, 2021 when I am writing this. So basically you dont understand any of this, therefore it must be a scam. Buying some bitcoin and other coins could be rewarding in the long term. No one can say for sure whether or not the problems can be resolved and a highly transactable and stable currency may emerge. 1 Replies 290 Views February 10, 2023, 05:55:08 AM . Real currency ATMs is it funny to watch people withdraw cash to fund their drinking problem. Bitcoins can be traced, your fingernails cant. Im not trying to convince anyone that bitcoin is the savior of the world but to put total trust in ones government, one that has a history of corruption is ignorant. 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?. Why should it not be? If you arent selling people around you on the big dream, you probably wont make as high of return. Which is fine, but this trust-less nature of Bitcoin is what the early adopters valued. All true. For fun, I try to gauge how bad is the Fear of missing out is and how that corresponds to a peak. Note that if you remove any of these essential elements, youve made the system effectively worthless. You cant vote with your wallet in this situation, so you have no control over what practices the miners use. Youre confusing outcome with process. I had no idea the market capitalization of Bitcoin and the other crypto-currencies are so high. No bubble lasts that long and keeps growing exponentially. And then follow that thread all the way back to the fact that the future blockchain(s) all of these future uses are built on are going to be continuations of the most valuable blockchains of today because valuable blockchains are a prerequisite for the data integrity required for high value use cases. And you should be prepared for it. Anybody can make a pill, and it costs only a few cents per dose. 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. And yet this is exactly whats happening with Bitcoin. Plus, it costs something like $20 per transaction. Why? That said, Im still not so sure. The worlds governments are not going to let everyone start trading money anonymously and evading taxes using Bitcoin. Its a huge money maker if you can bet that youre not the bigger fool. MissSaraBee Its interesting that you state the high water mark was $700,000, but now its $500k. January 3, 2018, 8:02 am. Mr. Money Mustache shares his opinion about Bitcoin. Index fund investing is both the simplest and the highest performing way to invest your money. This is to be expected for a revolutionary new technology. It then proceeded to burst in spectacular fashion just ahead of the financial crisis, plunging all the way back to $30 before rebounding. Its a win-win situation.. (namely, cultural values and living conditions which have been shown through study to increase our subjective wellbeing scores, or Science if you want a shorthand for it). Funny, I was recently approached to put up a sponsored post talking up the virtues of Bitcoin. There is some behavioral economics at play in dividend policy in that firms that issue dividends generally have a sound, stable business with secure cash flows; the market recognizes that and probably trades the stock at a slight premium, but that does not mean that investing in firms that do not issue dividends constitutes speculating. The happiness of society is made of the happiness of individuals and nothing else. So you are further wagering that Bitcoin will literally supplant the USD as the world medium of financial exchange, and frankly, that is kinda bonkers. Governments can inflate the prices as they wish, how is that model sustainable? Remember Altavista, Boo, Aol and Geocities, should I have bought those you mean? So, I PayPald you the $100 for your fingernail clippings before I got to the part about them going for $70,000. Started by myrrh. If you have the courage. Seems an awful lot of marketing being pushed for something of questionable value. No? Mr. Butler He pulled this off by living on a small percentage of his income as a software engineer, and diligently . Its not going to consume ALL the worlds energy? Its hard to quantify the lost energy and human potential, but the cost is real. Its very informative and answers many questions you raise, 2. Moneymeister 16-02-2023 WIDM 2023: mijn mening en verdenkingen tot nu toe. All valuations based on gold derivatives (paper money) are to varying degrees delusional. I agree with Pete. 2 Billion unbanked people on the planet to also enjoy a level playing field through this new Internet of Money. Then the mining ist just looking up data in this table. Be careful what you wish for. FullTimeFinance January 2, 2018, 6:04 pm. I enjoy and appreciate your blog and the core messages you send the world, and thanks for raising this fascinating subject. The alternative is front-loading energy consumption in maintaining a currency with predictable fundamentals on top of which society can run. 0 replies 0 retweets 3 likes. You have unwittingly tripped up your own argument here. Another interesting side-effect of bitcoin mining: big sales of computer graphics cards, and theft of electricity and cloud computer services. Research Ethereum further. 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. MMM, Internet has pretty much destroyed every industry it has pitted against. My gosh, where do you these people come from? January 3, 2018, 12:58 pm. Back in its heyday, BTC was incredibly valuable for making monetary transactions (essentially anytime before this recent mania clogged up the blocks). That said, I guess ridiculous speculation has been around for ages this is just the latest flavor. 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. Big banks get crushed, millions of americans were underwater on their homes and forces to foreclose and then they get a bailout from the US of A paid for by yours truly, the average american tax payer. Tim Beck January 3, 2018, 8:50 pm. Good points. Everything currently is too expensive. 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 4, 2018, 7:36 am. February 19, 2018, 7:36 am. We end up in Utopia? February 13, 2018, 5:35 pm. There are other points that I cant think of right now. Bitcoin isnt that though. Many more rants when the price of internet companies skyrocketed even though there was no evidence of current or future profits, and many more people claiming there was no ceiling because the internet revolutionizes how businesses operate and profits dont matter. 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! Until the price of bitcoin (any of the crypto currencies) achieves some semblance of stability, they will fail to be good mediums of exchange. theirlong-term viability, you have completely missed the bigger picture. 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? US is just one country in this big bad world, and not vice versa! Trust is important. January 15, 2018, 9:20 am. It is not an investment. But if it goes down, I wont put anymore money into it. All these ICOs are just insane. The Ramsey Show is a podcast by Dave Ramsey, a financial guru and bestselling author. My disagreements w the article summarized: If you cant grasp the difference between the two, then by all means sink your capital into crypto-currencies as they are currently valued. I dare you to look it up! Better to get an air-source heat pump, which multiplies your heat gain per dollar by hundreds of percent. An Aside: Why should we listen to you, Mustache? 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. Long time reader, first time commenter (ha). Justin C If so, this could negate the discount benefit for small purchases. So if you are buying and holding, say, Google stock, you are just speculating. I dont think Bitcoin will be very snuggly. Your examples exactly prove the point: social media is great, but the first ones to take off werent the winner remember SixDegrees, Friendster, MySpace? Thats a tricky question. Bitcoin finally surpassed $40K and topped at $41,940 on Jan 8. I am of the opinion all of Fiat will get wiped out in a decade or two! Bitcoin has just 200 billion capitalization currently. WHY??? I own my currency as it is today (EUR and USD), how come you do not own yours? ie beauty counter for nerds. Full faith and what? However, in 2004 when Facebook was being launched it was looked at as a funny little friend site. farmecologist I totally agree that Cryptocurrency is not a long term investment strategy, diversifying is absolutely key. 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. Im just a mere boring community banker by trade and I get dismissed for speaking out about bitcoin because I just dont understand the new economy. Bitcoin didnt fly off the charts until a couple of months ago, after (maybe) finding itself in the perfect storm to take a bubble to biblical proportions. They saw value in it very early. Just like gold, tulip bulbs, Beanie Babies, 1999 dotcoms without any hope of a product plan, pre-construction pricing Toronto condominiums you have no intent to occupy or rent out, and rare baseball cards are not investments. positive change I would say, the world is getting smaller) changes is because it makes things easier. As a result, the benefits of human progress are not reflected in our moneys purchasing power. Liked. There are third-party solutions, but they add complexity. Why the hell would you have an intermediary like that when buying bitcoins? TomTX, nothing was answered. Alright then, do you have all your money invested in cryptocurrencies? 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). 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. Thanks, MMM! Gold value in Ancient Rome also correlated well via military officer salary (Centurion correlating with a new Captain in the US Army). Simple answer is, they cannot have a secure private Blockchain. This is a non-sarcastic answer: The same could be said of buying a Powerball ticket every week. Even a significant percentage would be really stupid. Given that he vouched for Blockchain, but not for the hype over Bitcoin itself, you seem to be overreacting. If FIRE is your goal, Id get out. It also could be a bubble, but the crypto billionaires (the few or the hundreds who end up winning) will still need to buy their Doritos and Gameboys and lambos and helicopters, and Ill own shares in those companies no matter which currency is used. Mr. Money Mustache on Twitter: "I dunno man. It is cool. I always remember one sound arguments on investing that goes something like if they need to over explain the product and their business model, then Im not buying it.. 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. Understanding the motivation is a big part of understanding Bitcoin. I can 100 percent guarantee you that my mom and pop will still be using fiat paper, and so will I, and so will the worlds governments. 1) Adoption curve and network effect, 2) people buying & holding (hodling), 3) people using it to buy stuff or services. The security of the Bitcoin blockchain. Look up ethereum and Eos and read deeply on how fundamental this decentralised future beholds. For me, the answer is wealth rule #1 from MMM: You Dont Try to Gamble Your Way to Wealth, http://www.mrmoneymustache.com/2013/09/20/wealth-advice-that-should-be-obvious/. Putting blind faith in Government backed currency because Uncle Sam said it is worth something, is a thing of the past. Cryptocurrencies are extremely risky. No govt is just going to let the ability to control their economy be taken away from them. Pete Adeney is the man behind the money mustache, and he's full of great stories and advice. And it gets worse: Some large, popular components of the S&P have a PE of closer to 300, meaning it would take 300 years to earn back your initial investment. Why not somebody elses fingernail clippings? So just relax, lean into it, and grow rich with me. Its definitely useful for me to hear opposing views though and Im hungry for intelligent people to discuss it. Cancer-Away, CancerBgone, CancEthereum, and any other number of competitors would spring up. Also true. More than triple the speed of Visa/MC. Videos about Personal Finance, Early Retirement, and Other Stuff. Me, I am willing to speculate some, not on bitcoin as a currency, but on an bitcoin as an idea about the future. It is accumulated by countries, banks, and careful funancial entities. Ive personally stayed away having learned these lessons in a past life. 3. 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). Even more troubling, an estimated $11 trillion of government debt now trades at negative yields. Hows that Nvidia stock doing now that GPU sales have been skyrocketing this last year giving them two record years in 2016 and 2017? I believe MMM acknowledged that blockchain was pretty cool by itself and could readily be used for such purposes. Take risks, but keep educated and with good money management. Its diversification. Trust IS the value of Bitcoin. Rather than maximize profits, what about minimizing regrets? Bitmains S9 efficiency is at ~0.1 J/GHs. at best. 26 Replies 18313 Views March 27, 2020, 01:47:17 PM by talltexan: How do you press your kids to learn money habits? This bubble is going to break, the environmental waste is awful, and CNBC legitimizing this as investing with ticket symbols must stop. It can be laundered. OK, But What if Bitcoin Becomes the World Currency? Trust yes. However about 6 months ago, I withdrew all my stocks and threw it in altcoins. January 2, 2018, 5:54 pm, I considered investing in Bitcoin back in the summer, but decided to spend my time doing other Mustachian things such as enjoying the outdoors and spending quality time with family and friends. Some guy on the internet Consensus over its value. For this article, I have set the bar much lower to show you the religious conviction that crypto speculators have. I just want to point out that since Bitcoin is maxing out its current number of transactions per second, the waste of energy is actually tied to the price of a Bitcoin, not the number of transactions (the more a single bitcoin is worth, the more energy each miner is willing to spend trying to complete transactions, which earns them a bonus paid in bitcoins). Bitcoin and the cycle will end, and it costs something like 20... Progress are not reflected in our moneys purchasing power them all noticed this on! Replies 18313 Views March 27, 2020 mr money mustache bitcoin 01:47:17 pm by talltexan how. 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