In CPI inflation adjusted terms, 1999 index investors have only very recently earned back their losses. As should everyone. 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. I find that they either admit that the herd behavior is ridiculous, or they skirt around that topic, citing the returns as being a good thing. The $16,728 Social Security bonus most retirees completely overlook. Go educate yourself first. Lets get this straight: in order for Bitcoin to be a real currency, it needs several things: Bitcoin has none of these things, and even safely storing it is difficult (see Mt. Tulips? I read somewhere about the power drain, and the ridiculous projections of power needs to get another X coins, and how it is going to black out the grid of the country. The real backing of the dollar is the force the U.S. government will use if its debts are called in. This article is pretty below par in its research and very one sided. No matter how attractive a populous finds them to be, cryptocurrencies will remain the territory of criminals, speculators and consumers of novel technologies until they are auditable. I dont feel like making a well-constructed arguments because Im tired and this may make me look like a fool but frankly, I dont care. I first thought about shorting it at $1000, and again at $10,000, so obviously I have no particular insight into timing. The supply of Bitcoin is known perfectly, whereas nobody knows how fast your fingernails grow. It just means that some price levels are reasonable, and some are not. What if anything gives a compelling reason that bitcoin or any one of these other currencies will end up in the group? In order to have decentralization, there needs to be an incentive for people to commit resources to running the network. Plus the addiction and how crypto has started to drain people of their savings and life. Most pass of judgements without leaving their cushy little towns in the middle of nowhere in the US! 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. MMM said Government-issued currencies have value because they represent human trust and cooperation. 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! So I also read a lot about investment bubbles and fundamentals and how to tell those apart. I argue that fiat currency is inefficient because its supply is always increasing. Right! Mr. Money Mustache talks about his divorce. The happiness of society is made of the happiness of individuals and nothing else. The Money Mustache Community . That is when we are talking equality and progress for all! Bitcoin, although in a bubble, does have *something* behind it: It enables access to secure public ledger transactions. Except for ripple coin. FirstPrincipleThinking Hell isnt that why we are here in the first place? Its not as simple as you make it personally. NOTHING HAPPENS! So, I harvest other peoples speculation and I dont lose anything, as I have already harvested more than what I put in. VTSAX returned over 22% last year. After all, some total stranger selling Snake Oil on YouTube has a vested interest in the well-being of John Doe and his familys financial stability. These are preposterous numbers. Hi Financialindependence.. The short answer is they can do nothing about it! January 19, 2018, 6:57 pm. A billion dollar gaming industry creating games worth watching. This is Part 1 of 2. Missing the forest for the trees kind of thing. You all and Mr. Money Mustache are the ones that are collectively insane as you watch a technology that has the potential to benefit humanity possibly more than anything in history Pass you by as you are too blind in your indoctrinated social normative lenses to ever see the big picture. Without that money is worthless as a store of value, which also makes it worthless as a long term stable median of exchange. If your chosen currency doesnt win out it goes to 0 since if it has no users it has no value. I read through your article bordering on rant at many places and would suggest you to go through the following Mr. Money Mustache. It doesnt come right back a couple of years later and soar again to a new price 10 times greater than the previous bubbles high, which is what bitcoin has done after each one of its three or four previous bubbles burst. Buying real estate, gold, stocks, even ETFs and Bitcoins, all of these have risk. Gold has the 2 most important properties to make it function as money, scarcity and intrinsic value. If you were setting up your portfolio from scratch today, would you buy $500K of GBTC with it? They grew pretty flowers that we enjoy looking at. (Or computers or spaceships.) Max Thunder Ive used it a few times and although they take a few days to funnel money to you in the form of Amazon credits, they have always come through. What is the US Dollar pegged to? 1) Adoption curve and network effect, 2) people buying & holding (hodling), 3) people using it to buy stuff or services. But just to provoke you, I would ask you this question: What IS money?!? Take the decentralization, the trustlessness, the miners or the currency out and you throw the immutability out. rollie fingers The idea of have a decentralized monetary system outside of government and banking control is great in my mind. Let me know when you find a buyer for your $70k fingernail clippings. MentalArson Redirecting to /r/mrmoneymustache/comments/mz1sma/thoughts_on_mmm_why_bitcoin_is_stupid/h094ynt (308) You gotta have it. As the money supply increases, purchasing power is concentrated with the money creators at the expense of others holding the currency. So, we usually get $100 to $200 worth of stuff all at once. I dare you to look it up! 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. Buying it is not necessarily speculative. Crypto is here to stay albeit probably not at insane prices. BigTasty1212 Started by kayvent. Chris Urbaniak That said, Im still not so sure. People will overbuy it in a frenzy and oversell it when fear sets in. I have no issue with the block chain. Agree, the valuation of these cryptocurrencies are out of whack. The market can remain irrational longer than you can remain solvent.. Speculation is great. Your in effect speculating on a winner even if you do believe the technology is the future. Bitcoins are all the same, they are not numbered, they dont rot and dont have a shelf life. 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. Im not an IT guy of engineer so I could be wrong, but the energy issue and the safety issues you mention makes Bitcoin tera incognito for all intelligent human beings. A currency that unstable cant be realistically used for transactions, even if you forget about its other limitations. Which happened 47 years ago, not 40. TO_Ont This one is just simply incorrect. Well said, Bill. Looks like I made a big mistake then. It stays below the prior high for decade at least, sometimes forever. Thanks, MMM! Good points. 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. If cryptocurrency takes off, its much more likely that the winning one hasnt even been created yet, if history holds. I thought it was pretty genius when back home. A REAL currency must be low risk+ zero (better subzero) return+good liquidity, and all those three things MUST go together. I like the way he analyzes investments. 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. ..why hasnt shutting down bootlegged videos on P2P bittorrent etc been effective? But youre entitled to your opinion nonetheless. Unless, of course, it starts rolling *in* terrible new earnings compared to price, which is certainly possible. Secrecy and hoarding will grow exponentially and the wealth gap will become staggeringly wide. Talk of being blissfully ignorant! Will it get me my money faster? :) If youd like a link, just holler! Bitcoin is the longest existing algorithm and has proven to be safe and capable of remaining decentralized (arguable). I have accepted lifes nudge and opened up several pages of your blog and am working through them right after this, The Vigilante Well then Biglaw Investor, youd better stop using websites or stop supporting any company that does big data research, because thats consuming considerably more electricity and its not fundamentally vital to us existing. You are a noble man ! Why not one of the other 1500 cryptocurrencies? Thats not a bubble, but something else entirely. Why not somebody elses fingernail clippings? Gold has always been considered a commodity of high value. Yeah we could all gamble our way to FIRE, this week bitcoin, next week slot machines, poker, etc. 3. So by definition we need to start talking about things that dont exist yet because they *cant* exist without immutable blockchains. Remember there was social media before Facebook. Consensus over its value. Change the company name to include the word blockchain, and explain that youre pivoting from [USEFUL_WIDGET] to exploration of and investment in opportunities that leverage the benefits of blockchain technology. Your risk is your own, but understand that bitcoin is gambling. Also, just because something is open-source does not mean it cant be valuable. Like. Either way how about not alienate people based off their investments and act like an actual human being instead of a sociopath? 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. Also appreciate the utility of sending value to anyone anywhere with an internet connection without asking a middleman for permission doing financial surveillance on you. Im 100% with you when you say investing in bitcoin (and other cryptocurrencies) isnt smart. http://www.newsbtc.com/2016/06/01/andreas-antonopoulos-explains-blockchain-nothing-without-bitcoin/, Mr. Frugal Toque People fall in love with works of art. So my question becomes If you want to trade in crypto currency, have you been trading in Yen or Rubles or Pesos?. 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). The comment about 1999 investors didnt receive their investment back from stocks until this year well, for the rest of us that dont invest 100% of our money in the stock market in one instance AND we reinvest dividends, this type of situation is almost impossible. Some of them have no earnings at all. You will not own your money more with virtual currencies. Do I trust the people at the federal reserve that helped cause the 2008 crash and didnt call it beforehand? 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. There is a reason that central banks own most of the wotlds gold. Congratulations on your earnings. Who would help the poor, elderly and uneducated those without BTC? Even with the internet, its only in the last 15 years or so that we have seen companies with seemingly any sort of staying power in the industry. Bitcoin and altcoins consume a ridiculous amount of energy. A similar dynamic is at play with stocks: Is $1 of ongoing future earnings worth sacrificing $1 today? $100 per post is pretty motivating. 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. January 3, 2018, 4:56 pm. You basically have to first deposit a lot of money (as a reserve) onto bitcoin exchange sites, which themselves are only loosely regulated and would probably become insolvent if bitcoin crashed. Blog readers. But how do you know youre investing in Amazon, and not Pets.com? Subsequently, some 70 years later, Im still using that toilet paper to finance my retirement, buy cars, houses and all sorts of things? But boy, are you wrong on this one. 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. Moneymeister 16-02-2023 WIDM 2023: mijn mening en verdenkingen tot nu toe. 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