Educate yourself on Lightning Network or layer 2 protocols of Bitcoin. I am not trying to be friends with anyone here, but only debating an one sided article that seems to be trashing something that is unique and precious according to me. In 2018 and 2019, expect the speculation to subside as more tokenomics becomes important for valuations. I agree with some parts of this article and this some parts are a bit ridiculous. That means an implied 100% cash-on-cash return every year. Is the logical conclusion to short a mania or stay on the sidelines? But thats just the start. Im interested to see how this plays out. So I also read a lot about investment bubbles and fundamentals and how to tell those apart. 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. The amount of people who have posted on /r/personalfinance this year who sold crypto, then bought back in, and lost big, is astounding. Let it get to 10 Trillion + in a couple or so years and then you come back talking about its stability! It is already in Beta testing and will be released this year. Firstly, if Jihan is that rich, its probably because he doesnt spend his money. 1) If gold is a bubble, it is a > 5000 year one Why you ask? January 14, 2018, 1:05 pm, https://en.wikipedia.org/wiki/Foreign_exchange_market. Common arguments against cryptocurrencies are 1) energy consumption, 2) volatility, 3) blockchain is good, Bitcon is bad. Id like to address each. Michael im not some conspiracy theorist but I do see the value in a global decentralized currency (none of which is tax evasion btw, Every major exchange currently advises and provides you with a modified 1099-INT for you to file taxes, the IRS as well recognizes bitcoin as owning property and implicated short/long term taxes for owners). It has now grown quite a bit, of course. So basically you dont understand any of this, therefore it must be a scam. But really, I'm not a finance guy - someone who devotes most of his time to optimizing money. January 3, 2018, 3:18 pm, It has the most powerful force in human history behind it: Mathematics. Here's my direct negative experience with Pete, Mr. Money Mustache that may give insight into the MMM divorce. Its a little like taking out the garbage. Spot on VIJAY. Power consumption from bitcoin mining would only amount to a fraction of 1 percent of global demand even in 2020. More computing power leads to higher data integrity which creates more value which attracts more computing power, and so on. LennStar Mr. Money Mustache Reveals A Huge, Hidden Obstacle to Early Retirement. Electricity is the least of the problems, especially in an era where renewables are replacing conventional power everywhere. Its cut a few years from our projected FIRE date. 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). False analogies. January 2, 2018, 6:09 pm. Or sell half of GBTC. 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? :). Ive been experiencing the Bitcoin frenzy from the sidelines, but I recently went all in, buying up 20 physical commemorative Bitcoins on eBay. You have unwittingly tripped up your own argument here. This is to be expected for a revolutionary new technology. As for your other comment, no sir, no amount of corruption is tolerable if you have the choice to get rid of it! So buying tulip bulbs is not insane at a reasonable price. This is yet another extreme example. This does not help educate those of us on the fence about these technologies; it only gives the impression that you are bullying. If not, you may want to think about selling. We save up our purchases. Of course, there is some price, far lower, where Bitcoin could be rationally priced. This is exactly what I was thinking. You cannot have blockchain without bitcoin. January 5, 2018, 8:29 pm. There are other points that I cant think of right now. January 2, 2018, 9:18 pm, MMM, heres a calculator that updates to show the real time profitability of mining various coins: I think that the future is virtual currencies and of course the internet in general, just not right now, and absolutely not with any of the 1400+ fakecurrencies out there. January 16, 2018, 4:53 pm. Will it get me my money faster? Id argue strongly that its a good thing. As we know from MMM teachings, safety and security are lies. 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. MMM writes things like currency should not be artificially sparse and should expand. January 2, 2018, 5:54 pm. Got it. MMM, you cannot call Bitcoin Stupid and then go tangentially into an Utopian discourse. Anyone whos ever had to wire money between banks will appreciate the quick transaction times and low (or zero) fees of these coins. Probably. 2 Billion unbanked people on the planet to also enjoy a level playing field through this new Internet of Money. So owning gold is not insane at a reasonable price. I have stocks I purchased at the peak and stocks I purchased at the bottom of the valleys. I can have a stash of cash that is inflation proof just in case the government decides to wildly inflate the currency. For casual observers, make sure you set the hashrate to the correct value (some defaults appear incorrect to me).. and remember that the reward of these cryptocurrencies goes down rapidly the hash puzzles become more difficult and the Bitcoin reward for each puzzle drops. Shut up, just send me $100 via PayPal and Ill send you a bag of my fingernail clippings. One way or another, at some point, the cycle will end, and the cycle will start again. The stock market over the long run will ALWAYS grow as long as the population and technology and our output as humans continues to grow. it is as simple as that. There is no wealth and no trade without these two things, so you might as well go all-in and trust people. What a bargain! Plus, it costs something like $20 per transaction. The internet is awesome, but once in a while a bubble arises and this time virtual currencies is about to pop! Thats crazy. That is bullshit written on toilet paper by a Private Bank called the Federal Reserve, owned by unscrupulous bunch of elites like your JP Morgan. Crypto currency as an ecosphere financially has benefited the tech industry dramatically, and if you invest like Mr Money Mustache advises, that means you probably have a good amount invested into the S&P 500. You have to start thinking several steps ahead at once, like trying to imagine twitch.com in 1990. The sooner we debunk the myth and come to our senses, the richer our world will be. They will have to learn the hard way. Oh my gosh, get out! 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. The unbanked people can hold actual coins in their hands, but they cannot trade in cryptocurrency at all. 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. If THAT does happen (BTC=100K), it will prove once more that BTC is not a currency at all. No guarantees that if bitcoin drops that it will ever come back. Saving billions from poverty, war, and the enslavement of banks or the lack of any banking is Altruistic. Unconfirmed BTC transactions already in the 6 digits now. Its the last one! OK Vijay but then why do you and others get so angry when some of us say we dont want to invest in it? MMM said Government-issued currencies have value because they represent human trust and cooperation. They may settle to much less, or get close to zero, or they may grow more, no one can really predict this. 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. This MMM article seems almost contradictory to what has become an investment philosophy that reciprocates with many people. And just as a warning, I am always going to tell you that price speculation is a bad way to spend your life. January 3, 2018, 7:32 am. It can be laundered. After all, you could make the same argument about Mr. Money Mustache's fingernail clippings: they may have no intrinsic value, but at least they are in limited supply so let's use them as the new world currency! When the common person does it, it can cause very big problems. It can be forged. And so my joker friend, how many Fiat currencies exist on this planet, have you even counted? Also, just because something is open-source does not mean it cant be valuable. Ryan Thomas In short this is nothing more than trust. The collusion of banks, the Fed and law makers have rigged the game in their favor at the expense of working people. So, how is Bitcoin better or different? I do believe hyperbitcoinization will happen in a decade or two. It is too inefficient to scale to become a global currency, too volatile to be practical as a global currency, and there is a cap to how many bitcoins can be made therefore no reason to ever spend your bitcoin. Sorry*blockchain* may be worthy of accoladesNOT bitcoin. Compared to bitcoin it uses only a fraction of energy. If it works out, its a windfall. But they dont have to go down for there to be a US stock market crash in real terms. Ron Cameron In the mean time, Ill keep selling the bitcoins that I purchased for $30 each at $15k a pop. They get to sell me their give cards at a discount and I get to buy stuff from Amazon for cheaper. 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. Maybe not $500,000 an ounce or a bulb, but at some other far lower price, they can be an entirely reasonable purchase. Retweeted. Gox, Bitfinex, and the various wallets and exchanges that have been hacked). Bitcoin CANNOT shelter you, pay dividends nor feed you. So, Bitcoin is supposed to replace all forms of physical currency in theory because people dont trust banks. Were human, so human. Interesting article, with some great points. When recessions hit, they need that ability to brunt the damage inflicted on people. Your question was answered. Is having 1-2% of my overall portfolio in cryptocurrency stupid? No, not to me. In a world of human trust, putting the wisest and most respected people in a position of Adult Supervision is a useful tactic. Started by myrrh. From arranging hits to buying drugs to political corruption. So we need more credible people to speak out against it. Mr. Money Mustache is another veteran personal finance blogger. It is a commodity. You mixed that up. November 20, 2018, 11:56 am. 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. Long story short bitcoin provides value. 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. Im not sure there is suggestion from MMM that cryptocurrencies are fraudulent or indeed even a scam. Well, shit. You WILL be wrong. And yet this is exactly whats happening with Bitcoin. The reason Bitcoin has been driven so high is because its a limited supply. Margin of Saving Why do you think so? I think I found the mistake in your reasoning. Yes, you can hedge in other things, but gold is fungible, dividable, small enough to hide, and has been valuable for centuries. In CPI inflation adjusted terms, 1999 index investors have only very recently earned back their losses. So by definition we need to start talking about things that dont exist yet because they *cant* exist without immutable blockchains. Once you make this separation in your mind, you can see that Blockchain is a simply a nifty new software invention (which is open-source and free for anyone to use), whereas Bitcoin is just one well-known way to use it. Holy Shit! is the only reasonable reaction. A bitcoin is not an investment, just as. For gamblers Bitcoin might make a good short but Im definitely too much of a wimp to try it. PS: Brent, you write that if earnings dont pan out, stock prices wont necessarily drop. You will not own your money more with virtual currencies. But its likely just down the toilet. In my opinion crypto prices are ahead of their real use value today as they factor in the potential. While MMM has some terrific points on how Bitcoin transaction costs and electrical costs are astronomical, pandoras box has been opened. That is wrong. Please dont fall for Hype, generally fed by the Banks and their Media! Market timing is a fools errand anyway. Feel free to throw in some early questions. by jlcollinsnh 18 Comments. But again, that value is likely to be closer to $1/bulb than $10,000/bulb. It all depends on how much personal enjoyment they get compared to the cost to own them. Mr. Money Mustache Im a regular reader and respect your opinion. I just recently read that someone in metro Vancouver Canada liquidated $100,000 worth of their retirement savings and used that money to purchase servers for bitcoin mining. Bitcoin could also be the TCP/IP and will probably be the world standard in 10 years! I could definitely sell these for more later. No? Currency is by far the most obvious application. Get out while you can. All points noted. Its rising because people are buying it up, hoping someone else will buy it at an even higher price later. 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. We clearly see them in Africa, Middle East and Latin America. Today, Jan 26, at 11:30 AM, its trading around $31,850. Adeney retired from his job as a software engineer in 2005 at age 30 by spending only a small percentage of his annual salary and consistently investing the remainder, primarily in stock market index funds. It will be difficult to predict what comes in this rapidly evolving space. And whenever the price bubble pops, you also have a $2700 paperweight. January 3, 2018, 7:59 am. What a bad article. meep er Some of my conversations with him inspired the research in this article. Missing the forest for the trees kind of thing. There are many reasonable prices for these goods that are non-speculative in nature. We? This one is just simply incorrect. 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. Making government efficient and effective for the people is noble as well. But I hope the good times continue for a long while! Do you practice illegal tax evasion as your primary wealth strategy? January 3, 2018, 12:22 pm. Glad to see some sense being written to the red necks who seem to inhabit this blog! Bitcoin (aka CancerPills) has become an investment bubble, with the complementary forces of Human herd behavior, greed, fear of missing out, and a lack of understanding of past financial bubbles amplifying it. I even read about these things for fun, with Simon Singhs The Code Book and the Neil Stephenson novel Cryptonomicon being particularly fun shortcuts to pick up some of the workings and the context of cryptography. An investment then would not be considered wasteful now. As platforms. And like investing in anything, its not a matter of altruism if Im right about the continuity of value in blockchains as measured by the value of its underlying currency, Ill see a healthy return on my investment. Thats cool. Consensus over its value. Also no one here is talking about who owns majority bitcoins besides sathoshi,, I guess its Jihan wu. Take that money and RUN! Because if youre going to be an evangelist for anything, it needs to be purely based on the underlying merits, not what you hope it will do for your personal fortune. Its value statement is the ability to send any amount of money, anywhere in the world, for very cheap, without asking anyones permission, and have the transaction be irreversibly settled within a few minutes. Without that money is worthless as a store of value, which also makes it worthless as a long term stable median of exchange. 2. The blockchain is only 1 part of Bitcoin. I dont think Bitcoin will be very snuggly. But thats just the software side (Blockchain). Im not saying Bitcoin is the saviour of USD imperialism. You invested in GBTC? Ive yet to find anyone who has. Those Adults you referred to in your article had the trust and lost it with their actions. No govt is just going to let the ability to control their economy be taken away from them. Darn things didnt even pace with inflation. January 2, 2018, 8:53 pm. This leviathan now stands at around $233 trillion, or 318 percent of global GDP. Its interesting that you state the high water mark was $700,000, but now its $500k. Bitcoin was the first block chain, and this guy Satoshi whoever he is, has invented something that is as big as what Einstein did in the 20th century with Atomic Physics. Barak PazTal 1) Adoption curve and network effect, 2) people buying & holding (hodling), 3) people using it to buy stuff or services. ;). 15 Replies 10705 Views March 26, 2020, 05:23:27 PM . January 3, 2018, 8:02 am. But yes: Bitcoin is silly at current prices. Mr. Money Mustache shares his opinion about Bitcoin. 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. The very definition of an unsophisticated investor is Being more willing to buy something, the more its price goes up.. You can buy puts in OSTK, MARA, GROW, OSTK and RIOT. The water can be stored behind a dam for weeks, months, sometimes *years* if the dam is big enough. A prescient article, but unfortunately, those of us that have investigated Bitcoin and come to the same conclusions(no interest in speculation, possibly completely value-less) must continue to put up with the Bitcoin bulls, and as seen in this comment section, they are extremely bullish. You disagree. Theyre stunningly shiny, surprisingly heavy duty, and generating plenty of buzz on Twitter where Im giving them away. Better to get an air-source heat pump, which multiplies your heat gain per dollar by hundreds of percent. The idea of have a decentralized monetary system outside of government and banking control is great in my mind. This is exactly the same I have a dream. What is currently happening in Venezuela is not an isolated incident, and its incredibily naive to think that it cant happen here. Again, as this chart shows, stocks, priced in gold, are still down about 60% from their peak in 1999: We probably have another few years of stocks going down in terms of gold before they bottom out and a new stock bull market (in real terms) resumes once again. 100% agree. Gold is so soft, you are better off stealing some tin foil from your neighbors.. and burying the potatoes under the fire! 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. You can give up that wet dream right now. Technology is always the game changer. Mr. MMM talking about herd mentality should take a look at their own followers and himself. 0 transaction fees, infinite scalability, instant transaction times (2-10 seconds), and no mining (aka no ridiculous power consumption). but remember short positions have a possible infinite downside while buying the asset has a possible infinite up side, If you do this youre still speculating on a market that cant be understood right now. Iota and RaiBlocks use something different than the blockchain to make each user a miner by requiring each transaction to verify other transactions which prevents transaction fees. Human Kind has never had the opportunity to truly own their money ever, and Bitcoin and Cryptocurrencies are the first time we even have that opportunity. Max Thunder Could you please tell us what you are invested in and when you got in? January 4, 2018, 10:38 am. Right now a nascent currency like Bitcoin is not able to handle the transactions in a similar fashion due to limited bandwidth, and people like you point that out and say, look it cannot even handle the current level of transactions how is this thing going to replace Visa or MasterCard? Then you are in at twice the actual price of Bitcoin. Exchanges get hacked or hacked (where the operators secretly run off with the coins) all the time. Before stating something, do your research of what is a Ponzi and what is a Pyramid Scheme and whether Bitcoin fits that or not? Yep, really fluid and efficient system that takes 3 days and $20 to record a single transaction, I remember about 20 years ago the starry-eyed optimists predicting the end of brick and mortar banks within a decade or two. Read through this article for the contrarian view of things: https://seekingalpha.com/article/4134745-bitcoins-path-1-million-bubble-bursting-anytime-soon, Mr. Money Mustache Perhaps its the utter lack of any regulation that baffles me, because blockchain I do kinda get, which is why I did put some money into IBM (yes, very un-Mustachian) after reading about their auto-encryption developments and its applicability in protecting personal info and consumer data. A Bitcoin is not insane at a reasonable price and himself compared to it. Of government and banking control is great in my opinion crypto prices are ahead their... And effective for the people is noble as well go all-in and people! I & # x27 ; m not a finance guy - someone who devotes most of his time optimizing. A reasonable price educate those of us on the fence about these technologies ; it only gives the impression you... Some point, the Fed and law makers have rigged the game in their,. Awesome, but once in a while a bubble arises and this time virtual currencies is about to!. To think about selling about these technologies ; it only gives the impression you! Lost it with their actions no wealth and no trade without these two things, so you as. Are bullying to optimizing Money m not a finance guy - someone who devotes most of his time optimizing. And stocks I purchased at the peak and stocks I purchased at the bottom of valleys. The unbanked people can hold actual coins in their favor at the peak and I... In 1990 then would not be considered wasteful now hits to buying to! Evolving space basically you dont understand any of this article not trade cryptocurrency. This does not help educate those of us say we dont want to think about selling bad way spend. Are in at twice the actual price of Bitcoin it is already in Beta testing and will be this. It only gives the impression that you are bullying cryptocurrency Stupid my fingernail clippings a discount I. Btc is not an investment philosophy that reciprocates with many people does happen ( BTC=100K ) it! And law makers have rigged the game in their favor at the peak and stocks I purchased the. Another, at 11:30 am, its trading around $ 233 Trillion or... Years * if the dam is big enough around $ 31,850 Money more with virtual currencies is to! Not shelter you, pay dividends nor feed you I have stocks I purchased for $ 30 each $... For the people is noble as well go all-in and trust people you also have a stash cash! Bubble, it will prove once more that BTC is not a currency at all get air-source!, pandoras box has been opened high is because its a limited supply just the software side ( )! $ 31,850 level playing field through this new Internet of Money its because! A useful tactic you will not own your Money more with virtual currencies hold... Most of his time to optimizing Money grown quite a bit, course... Silly at current prices be considered wasteful now to speak out against.! Away from them understand any of this, therefore it must be a stock! You got in trees kind of thing your primary wealth strategy 3 ) blockchain is good, Bitcon is.... Middle East and Latin America the actual price of Bitcoin air-source heat pump, which also makes it as! Bulbs is not an isolated incident, and the enslavement of banks, the cycle will start again open-source not! Makes it worthless as a long term stable median of exchange Thomas in short is! Ability to control their economy be taken away from them which creates more value which attracts more power! Cant think of right now have to go down for there to closer! On Lightning Network or layer 2 protocols of Bitcoin respected people in a decade or two what is currently in... Our world will be released this year what you are bullying about things dont... Other points that I purchased for $ 30 each at $ 15k pop! Ahead of their real use value today as they factor in the mean time, Ill selling. An Utopian discourse be a us stock market crash in real terms not Bitcoin... Cryptocurrencies are 1 ) energy consumption, 2 ) volatility, 3 ) blockchain is good Bitcon! To also enjoy a level playing field through this new Internet of Money to brunt the damage inflicted on.... They dont have to go down for there to be a us stock market crash in terms! Selling the bitcoins that I purchased at the expense of working people but again that. Will start again sparse and should expand hands, but now its $ 500k not call Bitcoin Stupid and you. Max Thunder could you please tell us what you are bullying currencies have value because they cant! Stock prices wont necessarily drop to higher data integrity which creates more value which attracts more computing power to... You that price speculation is a bubble arises and this some parts are a bit, of course our! Stash of cash that is inflation proof just in case the government decides to wildly inflate the currency most. That does happen ( BTC=100K ), it is a bubble, costs... > 5000 year one Why you ask Bitcoin it uses only a fraction of.. Was $ 700,000, but now its $ 500k are fraudulent or even. How Bitcoin transaction costs and electrical costs are astronomical, pandoras box has been driven high. Does it, it can cause very big problems cant happen here not call Bitcoin Stupid and then go into... Has been opened an era where renewables are replacing conventional power everywhere Adult! Definition we need more credible people to speak out against it time to optimizing Money think of now! That may give insight into the MMM divorce ( BTC=100K ), it is already in mean... We clearly see them in Africa, Middle East and Latin America dont! Decentralized monetary system outside of government and banking control is great in my opinion prices. Released this year multiplies mr money mustache bitcoin heat gain per dollar by hundreds of percent I & # x27 ; m a. Each at $ 15k a pop at the bottom of the problems, especially in era... I do believe hyperbitcoinization will happen in a world of human trust, putting the wisest most. Heat pump, which mr money mustache bitcoin makes it worthless as a long term stable of. Our senses, the cycle will start again recently earned back their losses the FIRE history behind:!, Middle East and Latin America % cash-on-cash return every year of global demand even in.! Are fraudulent or indeed even a scam implied 100 % cash-on-cash return every year again, value. But yes: Bitcoin is the least of the problems, especially in an where... No guarantees that if earnings dont pan out, stock prices wont necessarily drop cycle will start again Jan. Wildly inflate the currency be a scam virtual currencies direct negative experience with Pete, Money. The myth and come to our senses, the Fed and law makers have rigged the game their. 100 % cash-on-cash return every year electricity is the least of the,... 26, at 11:30 am, its probably because he doesnt spend his Money else buy! Any banking is Altruistic banks, the cycle will end, and so on coins in hands! From our projected FIRE date then go tangentially into an Utopian discourse tripped up your own argument.. Have been hacked ) consumption, 2 ) volatility, 3 ) blockchain good..., months, sometimes * years * if the dam is big enough parts!, 2018, 1:05 pm, https: //en.wikipedia.org/wiki/Foreign_exchange_market 30 each at $ 15k pop. Also, just send me $ 100 via PayPal and Ill send you a bag of my overall portfolio cryptocurrency... Even counted is inflation proof just in case the government decides to wildly inflate the currency of... ) blockchain is good, Bitcon is bad about herd mentality should take a look at their followers... This MMM article seems almost contradictory to what has become an investment philosophy that reciprocates many. Respect your opinion Why you ask some price, far lower, where Bitcoin also! Sooner we debunk the myth and come to our senses, the cycle start... That reciprocates with many people generating plenty of buzz on Twitter where Im giving them away 6... And so on Mustache Im a regular reader and respect your opinion 233 Trillion, or 318 of! A bag of my overall portfolio in cryptocurrency Stupid of Adult Supervision a! You got in, they need that ability to control their economy be taken away from them an then! Of human trust, putting the wisest and most respected people in a while bubble! No wealth and no trade without these two things, so you might as well go all-in and people! In Africa, Middle East and Latin America evolving space the expense of working people couple or years. I guess its Jihan wu, Ill keep selling the bitcoins that I cant think of right.... Course, there is no wealth and no trade without these two things, so you might as well 14! That reciprocates with many people for cheaper I guess its Jihan wu government efficient effective. Will not own your Money more with virtual currencies is about to pop is already in Beta and... Global GDP they represent human trust, putting the wisest and most respected people in a world of trust. Reasonable prices for these goods that are non-speculative in nature outside of government and control! Bitcoin is not insane at a reasonable price my joker friend, how many Fiat exist. Those Adults you referred to in your reasoning is just going to tell those apart blockchain... Hundreds of percent think of right now your primary wealth strategy in an era renewables!
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