We save up our purchases. 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. Even if you are the only one in the room willing to do it. Adney's first tip is to change how you look at the prices of what you buy. There is a related problem that Bitcoin transactions are too slow and too expensive to be practical. Imagine he same concept but at least an old beta max has some residual value if you still own tapes, Another great comparison. Etrade is going to trade bitcoin futures. gov issued currencies = Human trust and cooperation. That shit is gonna go way way up to 50k! So every time I say Bitcoin/altcoins are a stupid idea, I chuckle. EvoInvestor Also, I wonder the extent of whispering in their ears & kick backs they could/likely do get. Regulation by SECI doubt theres any way to know the innovation that has been stifled, the small companies which never existed, the middle class growing local investment missed, because theres no cheap seat at the table. But anyway.you need a little imagination to see the value it has for the first world, because it has to arise from something other than a replacement for something preexisting. When the common person does it, it can cause very big problems. They cant use these gift cards. Its diversification. And wasnt Apple Pay and all these other card-less apps of paying for goods and services supposed to replace carrying around a physical wallet and/or cash? Its a speculation, pretty much like buying gold. WantNotToWantNot It is subject to crazes and manias. No where have I read South Koreans advocating replacing their currency with a Crypto equivalent. Bitmains S9 efficiency is at ~0.1 J/GHs. I am Mr. Money Mustache, mild mannered retired-at-30 software engineer who later became accidental leader of Ironic Cult of Mustachianism. All valuations based on gold derivatives (paper money) are to varying degrees delusional. Are you willing to bet half a million dollars that this bubble hasnt peaked? Do you have any stats to share? Why? Anytime someone says they are investing in Bitcoin, I have to laugh. You gotta have it. In a world of human trust, putting the wisest and most respected people in a position of Adult Supervision is a useful tactic. January 3, 2018, 1:43 pm, Apparently, Amazon pays people in other countries with Amazon gift cards. Rather like italicising. You cannot have blockchain without bitcoin. Bitcoin is not a bubble, its the pin :), Not looking so good right now However about 6 months ago, I withdrew all my stocks and threw it in altcoins. You guys may enjoy this article about Peter Thiel: https://www.wsj.com/articles/peter-thiels-founders-fund-makes-big-bet-on-bitcoin-1514917433. We clearly see them in Africa, Middle East and Latin America. I dont think so. Mark states he has done this study with no references to any data as to how he arrived at such a conclusion. Or stay in touch with them because they might become millionaires? Absolutely, so Ill proceed with it. I started laughing and said he should take his profits and move on because this will not end well, although inevitably many people will be left holding the bag. It then proceeded to burst in spectacular fashion just ahead of the financial crisis, plunging all the way back to $30 before rebounding. Bitcoin finally surpassed $40K and topped at $41,940 on Jan 8. Then in November I sold it and bought GBTC, which is a OTC fund holding bitcoins. Ive made more per hour than I do at my day job compared to the effort that I have put into this. January 3, 2018, 7:32 am. Yeah, I had watched/listened to lots of Andreas stuff as part of the research for this. It is an honor to be doing this session! MMM has been writing quality PF content for years. January 11, 2018, 4:23 am. MMM calls Bitcoin Stupid and all these things as some kind of Ponzi Scheme! 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? An Interview with Matt Cutts: Can the Government grow a Money Mustache? Id argue strongly that its a good thing. I try to lead people to conclude what I have. Do you really believe that we should go all-in when it comes to trusting our institutional financial establishments? 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. I think that the point being missed in all of this is NOT that people want to evade taxes, but that they are being screwed backwards & forwards by the banks (& the tax evaders-in-chief that run them). Just because the last while has been great, it wont always be that way. Yes there is. @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. People are genuinely mad at me for calling out this speculative aspect (note that I did not criticize blockchain at all, just the idea of uninformed people betting on future price increases for the arbitrary coins). Mr Money Mustache 26-02-2023 Hobbyen. A massive drop in the market is usually based on fear which once subsided, earnings from the 3k companies publicly traded will continue to churn out and eventually prices will come back up. that would be a PE ratio of 1. Same wishes to you on your toilet paper fiat money my friend. Only if you close your ears and go Na-na-na-na-na. A real, usable currency CANNOT have such huge fluctuations. > However EVERY SINGLE BITCOIN TRANSACTION IS PERMANENTLY RECORDED AND TRACEABLE. Is it likely to be worth $0? Woodser Everything is awesome, we cannot fail, it is great! 15% off everything you buy on Amazon basically. Why not one of the other 1500 cryptocurrencies? theirlong-term viability, you have completely missed the bigger picture. You should have just invested in winning lottery tickets instead of bitcoin, they have had a much much higher rate of return. And its back to 12.5K in two days. (Serious question. Mr. But I suppose its money well spent if the bitcoin mining conglomerate is behind it. Max Your Freedom The reason Bitcoin has been driven so high is because its a limited supply. Because the banking system is corrupt and big government cant watch over it? Theyre not very good experts. Gold has always been considered a commodity of high value. Gold is not an investment, but it is an excellent form of money. LennStar Anyway, what would he dump it for? . I dont buy that much stuff. MMM said Government-issued currencies have value because they represent human trust and cooperation. So, they sell it at a discount instead of losing revenue. The reason internet destroys industries (?? Bitcoin mania isnt different from the dot.com mania or any other mania going back to the tulip mania. Andre Kostolany. The only flaw with your fingernail analogy is that most of your devotees would only be too willing to fork over $70,000 for them. Its like Winston Churchill said: Gold is the silliest, most irrational thing you could ever use as money. January 15, 2018, 11:44 am. It makes you want to laugh and cry. They want the price of the asset to go up as well, so they are speculating too. Let me know which one consumes more energy overall? Why? I have stocks I purchased at the peak and stocks I purchased at the bottom of the valleys. But coincidentally, after I got my computer engineering degree I ended up specializing in security and encryption technologies for most of my career. 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. They know him as Mr. Money Mustache -- a gentleman who retired at the ripe age of 30 without a million-dollar salary. A REAL currency must be low risk+ zero (better subzero) return+good liquidity, and all those three things MUST go together. Even if you win some money through dumb luck, you have lost some time and life energy, which means you have lost. Why would anyone do business with a medium of exchange that is accountable to nobody? 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. I dont know if stock prices will go down. The Cryptocurrency bubble is really a replay of the past: A good percentage of Humans are prone to mass delusions which lead to irrational behavior. Gold value in Ancient Rome also correlated well via military officer salary (Centurion correlating with a new Captain in the US Army). Investors who valued Apple and Microsoft and rich now and that is not because they spotted a Ponzi scheme. No shame in that, maybe keep an open mind and try to have a discussion where we all learn something. 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. Why does bitcoin have to be the winner? Crypto is here to stay albeit probably not at insane prices. Mr. Money Mustache: Bitcoin isn't a currency it's like buying Beanie Babies The popular blogger, who retired debt-free at 30, says bitcoin's value is "imaginary." The popular blogger, who. We dont buy average cars or average homes we buy older cars, and smaller homes to cut costs and live a modest life. Its speculation, pure and simple. I cant speak for the whole of Africa being simply a Kenyan but this is mega horse shit. FOMO! 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. 2) lots of other things are used as a store of value (paintings, etc) The kids pulverize the bricks to make brick dust, which is the most valuable currency/commodity in their forest kingdom. This has resulted in the Bitcoin blockchain ledger being nearly immutable. The collusion of banks, the Fed and law makers have rigged the game in their favor at the expense of working people. ), but to include gold bullion is not quite fair. Publicly verifiable voting as well, when the chains are worth trillions. Cryptos appear to be the latest mania and in its current form will most certainly suffer the fate of the other manias that have happened in the past. But I think you meant to write apologize on behalf of half of humanity. The other half of humanity has no internet access at all (internet access just eclipsed 50% of the worlds population this past year), and thus they should not bear any responsibility for the cryptocurrency craze. Your question was answered. The real winners of the gold rush were the ones who sold shovels. January 3, 2018, 7:20 am. 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. 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. How many decades of using toilet paper as a useful medium of exchange are required before you reevaluate your position? Governments can inflate the prices as they wish, how is that model sustainable? Some make the argument that blockchain on its own has some merits that may be so. January 19, 2018, 6:57 pm. Then the mining ist just looking up data in this table. You disagree. January 5, 2018, 7:21 pm, *cough* https://en.wikipedia.org/wiki/Tulip_mania. Plus, it costs something like $20 per transaction. Thanks for your perspective on an interesting topic. 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. January 4, 2018, 2:48 pm. If it works out, its a windfall. 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 again, that value is likely to be closer to $1/bulb than $10,000/bulb. The Internet has become insufferable with all of these Bitcoin Clowns. Most of us, especially in the US and Europe, are free and are allowed to accumulate wealth through education and hard work. Vivek Prasannan ), but not because they did anything useful or produced any money and value to society,. It is, in other words, a valid store of value with properties that support it as a choice. When I hear people taking on debt to invest in Bitcoin, I lose a little faith in humanity. After all, you could make the same argument about Mr. Money Mustachesfingernail clippings: they may have no intrinsic value, but at least they are in limited supplyso lets use them as the new world currency! Personally, I am out of Bitcoin because it is no longer useful to me. We will have to see if that new blockchain style will win out. MMM, Internet has pretty much destroyed every industry it has pitted against. Bitcoins arent duplicable, your fingernails could be replaced by other fingernails and nobody would notice unless they do a mass spectrometry. First: cryptocurrencies have not demonstrated lack of manipulation. The sooner we debunk the myth and come to our senses, the richer our world will be. January 3, 2018, 9:18 pm. I dont mind people investing in Bitcoin because its not my money. https://www.amazon.com/giftcardscams/b?ie=UTF8&node=15435487011, Ryan Schaap MMM tries to give some hints as to the reasoning and also that they try to be . So my question becomes If you want to trade in crypto currency, have you been trading in Yen or Rubles or Pesos?. A currency that unstable cant be realistically used for transactions, even if you forget about its other limitations. The price went on a historic and seemingly unstoppable run all the way to $150 per barrel in 2008. January 3, 2018, 12:58 pm. Do you practice illegal tax evasion as your primary wealth strategy? Sure the BTC reward goes down, but the USD/BTC price keeps rising offsetting the lower reward for the time being. That is what people said 1999/2000 for the dotcom bubble. A currency system is the first and foremost application where blockchain was applied. And its value as a commodity is likely to be a lot more like corn than like gold. This has happened with EVERY speculative event throughout recent history. Do you also believe that you have a prayer of creating an internationally recognized currency that simply skips out on national and international financial accounting laws? Yes, there are still many kinks to be worked out with BTC and there is still too much volatility for it to be taken seriously as stable currency. He appeared on the Kevin Rose podcast as well. I read through your article bordering on rant at many places and would suggest you to go through the following Mr. Money Mustache. I just wish it had come out before the holidays so I could have just pointed family members to it instead of attempting (unsuccessfully!) Ive yet to find anyone who has. Use it or lose it. The thing that stopped me is that shorting it is a *pain in the ass*. The only reason you would be staying in is that you would hopefully still be able to find a bigger sucker when you finally do unload. Not everyone agrees, but it cannot, unlike cryptos, be regarded as stupid. College, Medical, Cars, houses, Child Care, Stocks, Bitcoin, hell even dining out is all overinflated. It also helps to have wise, centralized humans (the Federal Reserve system and other central banks) guiding the system. 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. All Rights Reserved |, 95% of even the trading volume is fraudulent, Bitcoin: the Worlds First Decentralized Ponzi Scheme, the Problem with calling Bitcoin a Ponzi Scheme, How to Give Money (and Get Happiness) More Easily. So theres a positive feedback loop here. Its very informative and answers many questions you raise, 2. In 2018 and 2019, expect the speculation to subside as more tokenomics becomes important for valuations. The internet became an amazing avenue for wealth. I am laughing my ass out. (I may buy some to pay my day to day expenses, but I try to minimize the %age of my net worth sitting in cash. January 3, 2018, 9:23 am. I cant help but feel that you already had a conclusion in mind before you started looking into cryptocurrencies. When I started to feel some FOMO, I know we have to be close to peak interest. Bitcoin is the viral buzzword that has the momentum. Ive been experiencing the Bitcoin frenzy from the sidelines, but I recently went all in, buying up 20 physical commemorative Bitcoins on eBay. I understand this is an MMM forum but i mean come on.. you have to recognize that managed risk is a part of building wealth. But at least 98% of MMM readers do not live in countries where this is an issue. The bubble crashed and the internet didnt die. Got it. When contracts cannot be broken nobody needs to oversee contracts. Most MMM readers recognize that there is a serious flaw within the system which is why most of us just reject it. offshore tax haves/ black marketsare companies moving to Ireland for tax sheltering & why does Apple have so much money overseas. What a bargain! Michael Or maybe you dont understand how exchanges work. This is no different from rich wall street people and government controlling fiat currency. Guess what, we can automate all of those jobs with cryptocurrencies. Everything currently is too expensive. Even if you are the only one in the room willing to do it. Why the hell would you have an intermediary like that when buying bitcoins? Crypto currencies are a must have component of your investments and should constitute not more than 10% of your overall investments, based on your risk appetite. I just dont understand the new economy. 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). 3. Episode 496: Why Bitcoin is Stupid - Part 1 by Mr. Money Mustache. Lot of your readers seem to be people who have never even stepped out of their home towns or this continent, and think the World is the US! So, we usually get $100 to $200 worth of stuff all at once. 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. If you dont have the Bitcoin in your own (encrypted, hardware, offline) wallet, you dont actually control the Bitcoin. Id like to address each. Im thrilled to see the godfather speak on this. Shorting bitcoin would just be speculation in the opposite direction. I have to disagree with one of your points here: in a worst-case scenario, if you have enough gold, you may be able to beat it between some rocks to make a serviceable frying pan. That was called new economy. But sometimes they do. 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. (Its also very hard to make jewelry out of. Whether you should get out is a difficult question. In short the author is saying that while some elements of the populous are spuiking the benefits of cryptocurrencies they have not be adopted by broader society except for the purpose of speculation. Peopleve been lusting after gold (god knows why) for millennia because it clearly arouses something inside them. Look at Cardano for example, they are building blockchain with built in treasury and KYC/AML endpoints. For gamblers Bitcoin might make a good short but Im definitely too much of a wimp to try it. One of the 3 points MMM stated it needs. Bitcoin values are delusional. 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. Cmon people its not rocket science. You are correct about your overall analysis: Bitcoin is indeed silly as a store of value from current prices because the number of insanely secure blockchains can always be increased by 1. Cryptocurrencies are extremely risky. Im selling because I agree that cryptocurrencies have entered the bubble phase, but when it comes to theirlong-term viability, you have completely missed the bigger picture. Blockchain isnt just a software protocol, the algorithm guiding it doesnt have to be open source, some cryptoassets pay the miners for securing the network through concepts such as proof of stake and delegated byzantine fault tolerance, some networks support decentralized applications with actual potential and have intrinsic value. Youre confusing outcome with process. 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. Doesnt mean you cant speculate to help you get to FIRE sooner though. Probably. Satoshi, while extreme in his views, watched the housing market collapse due to the fraudulent behavior of the banks and the government that backs them. If you arent selling people around you on the big dream, you probably wont make as high of return. PS. And if immutability isnt necessary for your use case, just use a database and save yourself the headache. Do you think Governments and Regulators have sat on the sidelines so far while Bitcoin is just exploding to a point that MMM had to sit and write a huge article? Educate yourself on Lightning Network or layer 2 protocols of Bitcoin. If I lie to you and take your money, thats one thing. One thing in that seems to be missing in this conversation that Bitcoin maximalists will always point out: Said every speculation sucker since the 17th Century. I can have a stash of cash that is inflation proof just in case the government decides to wildly inflate the currency. MMM says: Cryptocurrencies are useful for anonymity and evading the government which is bad because we need the governemnt and we need to trust each other. That is wrong. Either way I dont think youve fully connected the dots as to why it has value. Places like Singapore, Estonia, Switzerland appear to already working on converting their systems to digital cash. Millennial Boss Looks like I made a big mistake then. 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. 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. You will be amazed at the rate at which internet connection is going up in the poorest of countries. Sure.. that is until the government keep printing it until its worthless. I know, when you received hundreds of emails eventually you just have to buckle and say, Okay, damn it I will write it up. This is not going to happen. In the field of personal wealth, this means walking your children past the idling lineup of your neighbors Mercedes SUVs, over the snowy grass and up to the door of the school and being confident that you are doing the right thing. No, I am more inclined to trust economic models where the rules are clearly defined and cannot be changed, by anyone, ever. The blockchain is only 1 part of Bitcoin. I imagine that we are both smiling at this point. positive change I would say, the world is getting smaller) changes is because it makes things easier. Bitcoin has just 200 billion capitalization currently. In one of my IRAs I bought some AAPl in 2009 for $28k. 2. No. Unless youre a rogue nation trying to dodge sanctions? February 13, 2018, 5:35 pm. But if it goes down, I wont put anymore money into it. But in reality, both stocks AND bonds are in a bubble. Sounds like a bubble to me. False analogies. A boy named Sue Back it up, or youre just another nutjob. Sorry, PoF, Im staying away from your Bitcoins until I see a Tweet about the ones filled with chocolate. In my opinion crypto prices are ahead of their real use value today as they factor in the potential. In short this is nothing more than trust. In the US we call it the full faith and credit of the United States. MMM eludes to the crux of the issue surrounding the long term sustainability of the current generation of cryptocurrencies when he discusses the fact they are heavily unregulated and difficult to track for governments (everywhere). Bitcoin is actually a saviour that provides the world an opportunity to get out of total mess without fighting a WW3! Take the decentralization, the trustlessness, the miners or the currency out and you throw the immutability out. The unbanked people can hold actual coins in their hands, but they cannot trade in cryptocurrency at all. 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. Either one will get your CAPE ratio back into whack. LennStar Rick Gardner John Tucker To compare with fiat currency, we need to consider fiat currencys rippling effect on society. Bitcoin has its flaws and needs to improve as you mentioned: They could also plateau until earnings catchup with prices. Sir, its $0.33 for that pound of bananas. MMM says: There is no intrinsic value in cryptocurrencies. Vijay, I think you should sell every non-bitcoin asset you own, borrow as much money as you possibly can, and buy as many bitcoins as possible. There is no intrinsic value in ALL FIAT CURRENCIES. Lastly if you still are convinced that your fingernails and bitcoins are synonymous then you may want to contact the Chicago mercantile exchange (CME) or the CBOE as they both recently added bitcoin futures contracts for investors. So, I use bitcoin to buy stuff with the gift cards from these people. Take a look at the German Mark after WW1. Your fiat paper would be worthless in 10 years and you will be washing your ass with it! Things arent as crazy as 2000, but this is the 2nd highest peak of all time. 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. That is when we are talking equality and progress for all! January 2, 2018, 9:45 pm. Simple answer is, they cannot have a secure private Blockchain. i thought the same last year as to Westerners it makes no sense, we have bank accounts, credit cards, houses etc and that is correct (today at least). 8. 15 Replies 10705 Views March 26, 2020, 05:23:27 PM . 1) If gold is a bubble, it is a > 5000 year one So I also read a lot about investment bubbles and fundamentals and how to tell those apart. Thanks, MMM! There is some potential in the future for the blockchain technology but we are just so early that its hard to pick winners. That is where we are with Bitcoins. About half a trillion dollars worth of gnashing and rending. December 10, 2018, 5:45 pm, Dang! =. 2) Prices rise so much that earnings increase while stock prices remain the same. (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). Besides, your use of the terms fiat currencies and toilet paper tell us where you really stand.

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