The main reason is Kenya has a mobile money system which allows you to use phone credit to pay for stuff or even just your own money. This is the best post on this entire comment thread. Yes, that is your ground reality today. Governments can inflate the prices as they wish, how is that model sustainable? if you over leverage yourself in any of these you can find yourself in trouble. It also has technological demand. I am not trying to promote it for this purpose, but it is not an invalid choice. January 3, 2018, 12:26 pm. For fun, I try to gauge how bad is the Fear of missing out is and how that corresponds to a peak. Take risks, but keep educated and with good money management. This YouTube Video is one of the best shortcuts I found for explaining how Blockchain (and Bitcoin) works. Undoubtedly the bubble will burst or mining difficulty will increase, but Ill be able to sell this supercomputer to some nerd play World of War Craft on. and we live in the middle of it. Quick, get me that money on PayPal before you miss out on any more of this incredible performance!, Figure 2: Random people on Twitter doing some deep, useful Investment Analysis on Bitcoin. What if you want it for yourself, or have customers or distributors that do? https://www.cnbc.com/2017/12/21/no-bitcoin-is-likely-not-going-to-consume-all-the-worlds-energy-in-2020.html, Biglaw Investor That is wrong. January 3, 2018, 12:58 pm. 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. They only speculate that others may want them in the future. Let them hold on to their fiat currency if they like to. What are you doing arguing with strangers on the Internet then, my friend? There is no reliable way to track or trace paper. > 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. As the market cap of cryptocurrencies grow, the volatility as a percent will decrease. You will not own your money more with virtual currencies. Mostly: Its shiny and pretty and makes great jewelry and chicks dig it. MMM typically suggests going long in index funds, not bonds. People went off on many rants back when a single tulip bulb could have the same value as a ocean going ship, just as back then we had many people who couldnt stop talking about how great tulip bulbs are and why we should all be buying them. If that is the case, their values are strictly driven by speculative bidding, making them the worst sort of investment. Im a younger kid so I definitely only heard of Betamax. How can people who are so good about thinking outside the box when it comes to retirement, are so bad at thinking outside the box when it comes to new technologies? I put my money where my mouth is! When contracts cannot be broken nobody needs to oversee contracts. No? Were human, so human. Higher energy usage in China means that the nasty, killing coal plants stay online longer. Transaction fees on the DASH network are effectively 0. Michael It takes an open, transparent society that trusts its elected officials to do RIGHT. Because of this, newspapers start reporting on prices daily, triggering so many tales of instant riches that you notice even your barber and your massage therapist are offering tips on how to invest in this new asset class. 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. January 2, 2018, 6:04 pm. January 2, 2018, 9:18 pm, MMM, heres a calculator that updates to show the real time profitability of mining various coins: but fail to recognize that the USD also has no intrinsic value. Because An investment is something that has intrinsic value.. Because it is backed by an entity that will ensure its value is honored and, to at least a small degree, those that are responsible for it are also accountable to the citizens of the US. Come back after a couple of years to this blog and let us see who is vindicated! All they can do is to ban and stop the exchanges. Why? 1. Will it get me my money faster? Great post, I have been content to sit on the sidelines and watch the show. This leviathan now stands at around $233 trillion, or 318 percent of global GDP. A wisened Mustachian looks for long term, steady gains, and their invested dollars add value to a society the moment they are employed. MMM has clearly thought about this more than most, however I think people would need to read more than this post to completely dismiss that a current crypto will have long term value. Hardware. All technology goes through a bit of a curve where new technologies have multiple competitors and slowly they formulate around standards and a smaller core group of players. Today, 20 years down the road you are watching 4K videos on it! Maybe you know about Mr. Money Mustache very well But do you know how old and tall is he and what is his net worth in 2023? (Now, as you mentioned, it is most likely just speculation driven by greed). You made an unsupported claim. nVidia shares, purchased right after they were found liable in some court case and thus were a bit depressed, were some fantastic shovel sellers for me these last few years :), Dan Someone 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. Governments have no choice here. An investment then would not be considered wasteful now. The vast majority of the companies trying to monetize the internet failed. Mr. Money Mustache shares his opinion about Bitcoin. Bitcoin is not a bubble, its the pin :), Not looking so good right now You can keep saying its a bubble for eternity. Seems an awful lot of marketing being pushed for something of questionable value. "@origamicyber So true! Big ERN just recommended me to your blog and now I see that you beat me to the joke I just made. Ryan Thomas Remember that there are plenty of people with money in bitcoin or other crypto who are far from complete idiots. Speculation is great. 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. I really enjoyed the MMM article but I strongly disagreed with the part about gold. Now, with that moral sermon out of the way, we might as well talk about why Bitcoin has become such a big thing, so we can separate the usefulness of the underlying technology called Blockchain, from the mania about how people have turned Bitcoin it into a big dumb lottery. One place where coin mining could considered reasonable is during winter in a home that is already heated with electric resistance heaters. Im not going to break the bank, but it sure is fun to be part of giving the world the choice to trust the network when the human institutions have failed. Now lets get back to your kick-ass money savvy engineering experiments :-), Oh, dont feel too bad. 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). Last May, when I announced I had inked a deal with Harriman House to publish my new book, Pathfinders, I invited those of you who had embraced The Simple Path to Wealth to share your stories. But nobody seems to be able to put together a real reason why Bitcoin isnt the next Pets.com, Uberartist TomTX, nothing was answered. Please dont take the Proof of Work Blockchain like Bitcoins as the Blockchain. Banks and elites will remain even with Bitcoin, and if it goes your way it will probably the miningfarms and people who collect the most. Digiconomist notes this would make bitcoin the 59th biggest energy consumer if it were a country.. But thats just the start. Everything youve said makes sense. 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. Im fine with crypto but not as an investment. 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! Heres a great description of the whole scene by Chain CEO Adam Ludwin. But in reality, both stocks AND bonds are in a bubble. Im patiently watching on the sideline to see how this is going to pan out. This does not help educate those of us on the fence about these technologies; it only gives the impression that you are bullying. gov issued currencies = Human trust and cooperation. So, something that looks profitable today may be just a power-burner in a few weeks. Lastly, once KYC and AML is figured out, I have a hard time understanding why people would even want to use paper fiat instead of a digital fiat. And regarding Bitcoin as currency, it is already not usable as that TODAY. It remains to be seen. This puts USD straight into the bank the Federal Goverment and allows paying of debt. He appeared on the Kevin Rose podcast as well. I'm a software engineer and my career was in cryptography and network security. It is, above all else, pure wealth, other substances, and activities may be valued in gold bullion. Me personally, Im betting on the buck. Some newer, better tech has now taken BTCs place here (LTC or any DAG technology). It's natural to just look at the price itself and how much it's . Personally, I think this article shows that Mr Adeney has had his blog hijacked by the Anti-satoshi ;). Its totally different when you lose your money by yourself. This video epitomizes the Bitcoin market right now. Inexpensive computers thousands of times more powerful than the best you could buy for $10K in 1990. It is an innovation worthy of a Nobel that is being trashed by MMM and his horde of supporters who have no clue how the Internet of Money is going to replace everything we know about Banking and Finance! 2. Please drop the bullying and come back to join the conversation. 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. Its a speculation, pretty much like buying gold. 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). It makes you want to laugh and cry. Im interested to see how this plays out. Id like to apologize on behalf of all humanity that you were compelled to spend some of your life energy on that. According to the index, the amount of energy consumed by mining bitcoin surged about 26 percent in November alone and now totals nearly 36 terawatt hours, enough energy to power about 3.3 million homes. Get out while you can. I couldnt find anything indicating countries are using bitcoin as a reserve currency. Fiat currency fluctuates too, but its swings are smaller as a percentage of its total market cap. Say I trade you a car for 1 bitcoin on Jan 8. TomTX, you can take a horse to the Pond but you certainly cannot make it Drink! Also, a currency should not be artificially sparse. You need some sort of fundamentals, and in bitcoin there are none. Bitcoin values are delusional. Not going to do this with you.. I thought it was pretty genius when back home. We cannot have better living conditions for half of humanity on this planet under a corrupt and manipulative central banking system of various countries, that are not even true democracies. Bitcoin and other Cryptos are attractive for that reason and that why people spread this misinformation about it to sway people from backing it. 7 Replies 594 Views February 10, 2023, 11:49:28 AM by index: Bonds funds vs stable value funds. https://www.nytimes.com/2017/02/19/arts/design/has-the-art-market-become-an-unwitting-partner-in-crime.html. Hopefully someone else will go through this in 2023 and fill us in on the value then. Naturally sentiment plays an important role in BTCs price. Mr. Money Mustache How much do you have invested in BTC? Scott Nicholson While I agree with your sentiment about Bitcoin I have been echoing similar warnings to friends and family since its mid-2017 breakout to $2k I think several other cryptos are definitely deserving of a portion, albeit small, of an investment portfolio. Basic Economics Vijay. Vijay how can it be a useful currency without a relatively stable value? A stock is a share of an actual company, bound by rules and regs (however imperfectly administered, at least they exist). But maybe an iteration of that will be. Besides, how do you get BTC in the first place? Personally, I am out of Bitcoin because it is no longer useful to me. January 4, 2018, 7:36 am. Or sell half of GBTC. How many decades of using toilet paper as a useful medium of exchange are required before you reevaluate your position? Good points? Is it likely to be worth $0? Because the banking system is corrupt and big government cant watch over it? We will see you on the other side of the crash. Thanks for your perspective on an interesting topic. Get listed and sell some shares. Woodser Fair comparison? Hence, he advocates value investing not speculation. I also invested in a bitcoin two years ago, and paid off all my debt with it. 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. Eenvoudig leven . how is this different than a crypto? Im only a mediocre computer scientist. I agree with Pete. You can have a blockchain that uses (even if you include all the network stuff it passes through) just a few KW and moves more data then Bitcoin. 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.) 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. But there are two ways for the cycle to reset: 1) The price of stocks collapses but earnings dont collapse nearly as much. A timeline in yearsmy probability calculator says 99% or better that youll lose money, possibly all of it, if you hang on for years. Stop Ironing Shirts So we need more credible people to speak out against it. That is wrong. But again, that value is likely to be closer to $1/bulb than $10,000/bulb. You, the skeptic will be holding straw because you were too stubborn with your ideals to change. Why would anyone do business with a medium of exchange that is accountable to nobody? Also, I wonder the extent of whispering in their ears & kick backs they could/likely do get. A billion dollar gaming industry creating games worth watching. It is an honor to be doing this session! Vijay What ICO do you own? In all fairness, cash USD is also used for illegal activities. He or she still determines the current market price. I just wish it had come out before the holidays so I could have just pointed family members to it instead of attempting (unsuccessfully!) Do something useful with your money. positive change I would say, the world is getting smaller) changes is because it makes things easier. If you want just one reason it is that governments will not allow it. Then they go on Twitter and demand that Mr. Money Mustache apologize to his followers for telling them that speculating on future frisbee prices is not a good idea. Video compression tech. 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). Even in a police state like China their actions have failed! at best. About a 1/3 of it gets taken before the IRS even gets their grubs on it. A large proportion of other coins are long term holds. Something only has value if ppl place a value on it. If I lie to you and take your money, thats one thing. Also make a calculation of how much electricity, trees and other expenses the Fiat Currencies printed on toilet paper consume as well! I dont know if stock prices will go down. 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! 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. 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. I suspect it will have uses beyond public currency. Even if youre the only one doing it. True. When you make this kind of purchase, which you should never do, you arespeculating,which is not a useful activity. You are correct to note that Since the late 1990s when Shiller started promoting the CAPE ratio stocks have regularly been in bubble territory. Like. Pete Adeney is the man behind the money mustache, and he's full of great stories and advice. Thats something worth giggling. Not going to do this with you. Justin C Guys. FriendlyPoster Its absolutely astounding how the general (pretty darn) intelligent public cant tell the difference between an real asset vs an investment. Liked. She works as a school monitor and the kids have an area of the forest next to the school to play in. Your turn to supply real numbers. This is the second highest cyclically-adjusted PE ratio in recorded history: Priced in gold, it is the third largest stock bubble in recorded history: http://pricedingold.com/charts/SP500-1880.pdf. January 2, 2018, 8:01 pm. No doubt we are in a crypto mania now, but the concept of a global digital currency has been coming since Biblical times. I wonder why. Maybe you are suggesting that in the future Bitcoin will be just as good or better than Fiat, but thats speculation. 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. Probably the same will happen again. I would say, Probably the same would not happen again. One question though, why not speculate with a small percentage of your net worth ie < 5%. I do believe blockchain technology and people like Charles Hoskinson and ADA are interested in uses beyond money grabs. Do you practice illegal tax evasion as your primary wealth strategy? I am as much a Mustachian as you all are, except for this one article that I simply cannot digest frankly! In Ancient Rome and today one ounce of gold bought a very nice dress suit. Its a huge money maker if you can bet that youre not the bigger fool. Returns are down and all that cash needs to go somewhere. No. January 5, 2018, 8:29 pm. Of course there is speculation. Warren Buffet says dont invest in what you dont understand, and I dont understand Bitcoin. This is no different from rich wall street people and government controlling fiat currency.. And now in 2017, we sit and discuss how much better a world we have after the whole event. The internet became an amazing avenue for wealth. Maybe a couple years from now when the mortgage is paid off and we have some play money/money we can afford to lose. Besides, theres value in bitcoin, like with gold or a comic book, or any other item people assign a value to. January 3, 2018, 12:14 pm. Since the Fed can always print as much currency as it wants, I would probably bet on scenario #2 as well, so perhaps were half in agreement. 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. Why? Even then, like with investing in a new company, youre taking substantial risks. I think I found the mistake in your reasoning. Oh my gosh, get out! The strategy isnt sustainable. Mr. Money Mustache on Twitter: "I dunno man. Either way how about not alienate people based off their investments and act like an actual human being instead of a sociopath? January 3, 2018, 12:15 pm. Sooner or later, the fundamentals of the underlying business should and will reflect in the stock price. The fees are incredible. Episode 496: Why Bitcoin is Stupid - Part 1 by Mr. Money Mustache. This is the greatest use of human energy and capital the world has ever seen. I completely agree, investing in Bitcoin is JUST like investing in lottery tickets. Also appreciate fungibility. January 3, 2018, 7:12 am. They are set at the margin, by the marginal buyer. 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