(Then Ill get out, right? To me, the Bitcoin bet is basically a global Paypal that allows anyone in the world to use it. Most of the 1000s of cryptos (and maybe even bitcoin) will fail, but the few that remain will change the world. While silver and copper has been used as a form of money (notably imperial China, it was a silver based society with gold used as a high currency), golds special attributes has always been seen as a form of value storage and trusted trade medium. Take the decentralization, the trustlessness, the miners or the currency out and you throw the immutability out. GPU mining is dead. Might want to polish that up before going public again. 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. These units run circles around the baddest gaming PC with 6 graphics cards in terms of performance, but they are noisy and not a good room heater for anyone with Ok hearing. 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. Some companies are already testing it in main net as well! 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. We dont need to prey on their consumerism also. Andy Stow But thats just the start. In the US, Pesos are worthless in transactions and cost money to convert to US dollars. We will have to see if that new blockchain style will win out. and we live in the middle of it. > . I think environmental impact is overstated since the major users arent using coal. 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). So just relax, lean into it, and grow rich with me. ;). However, governments and institutions are investigating the uses of some platforms, like Ethereum: https://globalnews.ca/news/3977745/ethereum-blockchain-canada-nrc/. If so, this could negate the discount benefit for small purchases. 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. From arranging hits to buying drugs to political corruption. Youre 100% right that fiat currency is only good when people trust itand that trust could be ZERO. Do not let your own brain trick you for easy solutions! Don't look at prices, look at relative prices. 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. Alright, time for a thought experiment. January 3, 2018, 7:32 am. Alright then, do you have all your money invested in cryptocurrencies? There are many reasonable prices for these goods that are non-speculative in nature. 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. Mr. Money Mustache Reveals A Huge, Hidden Obstacle to Early Retirement. Theres no way I could have paid down my debt and netted $14.5k in stocks in less than a year with less than $5k in capital. People like planting gardens. Like every state currency, it derives its worth out of the fact that the state says you can *always* pay your taxes with it They always do.. January 5, 2018, 12:35 pm. People will overbuy it in a frenzy and oversell it when fear sets in. No one foresaw that VHS would win, and yet Betamax was gone not many years later. January 2, 2018, 9:18 pm, MMM, heres a calculator that updates to show the real time profitability of mining various coins: No. Doesnt mean you cant speculate to help you get to FIRE sooner though. Yes, it is true that bonds are *also* in a bubble at the present timeand that the bond bubble is so big that it makes stocks look relatively cheap by comparison. You may be smart enough to recognize why one currency is going up and another isnt and to not go all-in on something. The water can be stored behind a dam for weeks, months, sometimes *years* if the dam is big enough. If you have the courage. For those of us who live in USA and use the USD for our currency, what does it mean to trust that government, which is currently breaching 19 TRILLION dollars in debt (https://en.wikipedia.org/wiki/National_debt_of_the_United_States) while simultaneously reducing its revenue stream (tax breaks for everyone). Thats why wind farms are much more economical in areas with large scale hydro. Why not somebody elses fingernail clippings? 15% off everything you buy on Amazon basically. I advise you look at the 10-year PE ratio. So, I use bitcoin to buy stuff with the gift cards from these people. They saw value in it very early. Thanks for sharing your opinion! While it is true that stocks are probably expensive right now, one thing that doesnt get mentioned enough with Shiller P/E is the E represents the 10-year rolling average inflation-adjusted earnings. Ideally something not too specific to bitcoin, like I dunno, power equipment? January 2, 2018, 6:47 pm. Have you ever taken a look at how correlated the stocks of an index were? https://www.amazon.com/giftcardscams/b?ie=UTF8&node=15435487011, Ryan Schaap Spot on VIJAY. You are just parroting what every novice tells about Money. Ive been thinking of doing just that.. And then I put it off for a few weeks, and the price jumps up exponentially. Its like Winston Churchill said: Gold is the silliest, most irrational thing you could ever use as money. There is a high chance that Bitcoin doesnt remain #1 forever because there are so many cryptocurrencies, many of which with very different applications, including some that arent even based on blockchain technology. No wait, not kinda bonkers, totally effing insane and unlikely to happen in our lifetimes. 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. Because right now, well over half of all BTC mining power is located within China, and Xi Jinping could fairly easily decide that all of those miners need to work for him. At least theyre cute and the grand kids like them! Market prices are not set by consensus. At the moment, theyre incredibly volatile compared to the monetary systems of the developed world. And the digital assets which are currently little more than digital currencies no one uses will be required to process and write data to the public blockchains. Its closest to an MLM for me. Even some cryptocurrencies that currently exist. As far as Im concerned, this is the final word on Bitcoin. This is exactly what I was thinking. In stating that humans have never had a chance to own their own money you have hit on the essential problem with bitcoin and any other monetary alternative. An Interview with Matt Cutts: Can the Government grow a Money Mustache? Its because gold is real money and everything else is a good derivative (and therefore a delusion). Mr. Butler Its like trying to say Bank A is better then Z Bank because it has a fancy new way of getting money. If they talk about investing in BTC or any crypto CURRENCY, I say, well, I think Ill invest in Mexican Pesos. Bitcart.io takes DASH. As such, its an awful means of trade. That is why I also invest in government bonds. 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. This is Part 1 of 2. That is wrong. I dont think so. More? Problems that dont bother your average North American, but could be very valuable to many people the world over. The fees are incredible. This is the most blasphemous thing ever to be written by MMM. Be careful what you wish for. gov issued currencies = Human trust and cooperation. Even as these banks show SKY-HIGH PROFITS, they mostly evade their share of tax via loopholes. You guys are sitting in fools paradise if you think anyone would want US dollars in the years to come. This puts USD straight into the bank the Federal Goverment and allows paying of debt. @RK 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. I just hope my tax dollars arent used to bail these folks out. So long as you have the self control / personality to only invest what you can easily afford to lose and to not let it consume your time and energy (not true of most people but more so mustachians) then there seems to be a potentially large upside. But there are interesting aspects to the technology and what it could develop into. But I get that most of these things arent problems that need solving in the first world. I mentioned very specific problems with BTC/ETH. January 3, 2018, 7:36 am. $100 per post is pretty motivating. But consider some things that will live up the hype.. like improved immunotherapies for cancer or Crisprs ability to cheaply edit DNA line by line. I was hoping that when bitcoin futures became a real thing, Id be able to short it in a more normal way. 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? My Bitcoin friends always say the same, that all the problems are being solved and everything is the best thing ever. ): the Problem with calling Bitcoin a Ponzi Scheme. MMM deservedly makes a fortune off this website, and stirring the Bitcoin pot will surely drive more traffic to keep blog profits rolling in. Bitcoins can be traced, your fingernails cant. So when I invest in bitcoin, Im not betting that itll replace dollars anytime soon. Hurry! When everyone is on the train and praising it like it is the next coming of Jesus or whatever? Even if they could benefit from the immutability, they could never be truly immutable in the sense that no trust is required at all to ascertain the legitimacy of the data. As a result, I have cashed out on their misfortune. The most useful comments are those written with the goal of learning from or helping out other readers after reading the whole article and all the earlier comments. You have unwittingly tripped up your own argument here. January 15, 2018, 9:20 am. Scott Nicholson The amount of people who have posted on /r/personalfinance this year who sold crypto, then bought back in, and lost big, is astounding. I dont invest in Bitcoin, but Ive had this sob story in the back of my mind about how I missed out when I decided sometime pre-2010 to NOT mine Bitcoin. You know what else they have at bars? Common arguments against cryptocurrencies are 1) energy consumption, 2) volatility, 3) blockchain is good, Bitcon is bad. But it is a valuation technique that goes back practically as long as there have been stock markets.). Nothing wrong with speculation, as long as you are doing so responsibly and understand the risks. I think I found the mistake in your reasoning. I can trade with anyone in the world for a low price (not necessarily with bitcoin as the price has gotten expensive but with other currencies). Worth at least an extra couple bitcoins there. Rather like italicising. FirstPrincipleThinking 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. All these ICOs are just insane. 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. I can see scenarios where some of these platforms develop staying power and become increasingly valuable for the actual work that they are needed to accomplish. Its cut a few years from our projected FIRE date. It certainly is for day traders in short term. E.g. Im sorry MMM, but the consensus is that your fingernails are worth nothing (you couldnt even pay me to hold them), and that 1 BTC is worth more than your bike. Not saying thats why he wrote the article, but just that there are certain advantages to being an Internet Celebrity, one of which is that everything you write turns to gold, er, uh, bitcoin, er, uh, whatever. Not just stupid, insane. Vivek Prasannan ), bastringue Sooner or later, the fundamentals of the underlying business should and will reflect in the stock price. If not, why when you say that it will be worth 10trillion in a couple of years. They always do. Also appreciate fungibility. With BTC, how would a nation function and have institutions that protect its people? But yes: Bitcoin is silly at current prices. A stock is a share of an actual company, bound by rules and regs (however imperfectly administered, at least they exist). So, I harvest other peoples speculation and I dont lose anything, as I have already harvested more than what I put in. A lot of jobs today exists only to oversee things. Thats pretty much it. Good comments Jon. Those who are in it are using it for speculative purposes, not as a currency. Trust yes. Today, Jan 26, at 11:30 AM, its trading around $31,850. They only speculate that others may want them in the future. Thats fairly over the top. So, I PayPald you the $100 for your fingernail clippings before I got to the part about them going for $70,000. I think in five years bitcoin will pretty much disappear. He or she still determines the current market price. *pop*. January 3, 2018, 12:48 pm. 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. I agree that Bitcoin isnt an investment. Im patiently watching on the sideline to see how this is going to pan out. Right now, the only people driving up the price areother speculators.
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