Hmmm..why not pay in bitcoins if it is so superior? Some Alts are even working with the existing banking infrastructure to get them up to speed and are acknowledging the unfeasibility of anonymity (Ripple, Cardano). Market prices are not set by consensus. God speed my friend. I think that gold is nothing special its a shiny rock. Consensus destroyed. 2 years later, and each coin is 28,736.04 or $39,388.47. Oh my gosh, get out! Not just stupid, insane. Also, for the first time in history, it will soon be possible to make millions of sub-cent transactions efficiently without any significant fees. Im not advocating throwing all your money into crypto (I havent see anyone say that). MMMers have unplugged from debt, but putting all faith in the designers of The Matrix seems ironic. 1) Energy consumption Bitcoin consumes a massive amount of energy to secure the network. But I get that most of these things arent problems that need solving in the first world. You cannot create more coins than are programmed to ever exist. Theyre stunningly shiny, surprisingly heavy duty, and generating plenty of buzz on Twitter where Im giving them away. 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. Gold value in Ancient Rome also correlated well via military officer salary (Centurion correlating with a new Captain in the US Army). The problem with Bitcoin, (really all of the crypto currencies) is their value is not tied to anything of value. When everyone is on the train and praising it like it is the next coming of Jesus or whatever? But, dont you initially invest money into Bitcoin thru your bank? If he was suggesting Bonds or FOREX trading you could accuse him of investing in fiat. 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. Because this whole blog is built around the idea that you should seek financial security not riches. Gold has always been considered a commodity of high value. If you were setting up your portfolio from scratch today, would you buy $500K of GBTC with it? Thats not a bubble, but something else entirely. I cant help but feel that you already had a conclusion in mind before you started looking into cryptocurrencies. The response was amazing and, unfortunately, there were simply to many to include them all. Back it up, or youre just another nutjob. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Take a look around. So we need more credible people to speak out against it. They are set at the margin, by the marginal buyer. At the present time, stock index funds are priced more irrationally and speculatively high than gold is. February 13, 2018, 5:35 pm. Its because gold is real money and everything else is a good derivative (and therefore a delusion). We end up in Utopia? Thats fairly over the top. Well, imagine you are in 1963 and you hear the speech I have a dream from Martin Luther King on abolishing slavery and you ask the question Why do you think this will happen?. An Interview with Matt Cutts: Can the Government grow a Money Mustache? Its like saying they are investing in lottery tickets. Which happened 47 years ago, not 40. People suffer immensely. Returns are down and all that cash needs to go somewhere. 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. There used to be cool arbitrage opportunities on a website called purse.io, where you could buy amazon products for a discount using bitcoin but transaction fees have made those types of business models (temporarily?) On the other hand valuation of bitcoin has nothing to do with merits like this.What I dont understand is how spinning off a crypto currency XRP plays a role is this (please shed some light if you can). Smoking brings zero value to society, only net negative. The Money Mustache Community Learning, Sharing, and Teaching Investor Alley Our Crypto Investment strategy (slow and steady investing for the win) . This is bitcoin's intrinsic value and the longer it exists, the more apparent it will be. WHY??? 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. I noticed that you didnt deny that you are invested in Bitcoin. Alright, time for a thought experiment. Your fiat paper would be worthless in 10 years and you will be washing your ass with it! Note that if you remove any of these essential elements, youve made the system effectively worthless. 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. if there was something I wanted to buy online from another country and they didnt take the dollar for whatever reason its an OK solution. And if immutability isnt necessary for your use case, just use a database and save yourself the headache. About purse.io: Do you have to pay the transaction fee to deposit the BTC to escrow? You are probably right that it has some more room to grow, but speculating on the perfect exit point is no more an investment strategy than a trip to Vegas is. If not, you may want to think about selling., Scott Nicholson Most of us, especially in the US and Europe, are free and are allowed to accumulate wealth through education and hard work. Personally, I am out of Bitcoin because it is no longer useful to me. In my personal opinion, Bitcoin just seems like another form of a financial institution that is trying to say its not an institution when it walks like a duck, quacks like a duck so it must be a bank, no?! Adney's first tip is to change how you look at the prices of what you buy. Consensus over its value. Because the banking system is corrupt and big government cant watch over it? The financial strategist has established a large audience by favoring slower-paced bets on surer outcomes over cryptocurrency's notorious high-risk-high-reward scenarios. November 20, 2018, 9:31 am, rollie fingers Hey MMM, how do you plan to stop speculation, why might it be necessary to do so? Devs in their mid 20s who owe the IRS 50k and lost most everything. While I was in Kenya, the central bank had capped rates at 14%. I was so sad that I missed out again ;). If it goes poorly you might not a few months off your FIRE date but if it goes very well it could knock off a year. Either way it wont end badly right? Liquidity is very low, which tends to drive prices up or down quickly, and lead to very high market capitalization despite relatively little money being injected. Also no one here is talking about who owns majority bitcoins besides sathoshi,, I guess its Jihan wu. Another interesting side-effect of bitcoin mining: big sales of computer graphics cards, and theft of electricity and cloud computer services. I agree w jon. Christopher R Young Bitcoin reminds me of a story my daughter told me. in my opinion. One of the 3 points MMM stated it needs. Its a win-win situation. It just means that some price levels are reasonable, and some are not. TO_Ont Your risk is your own, but understand that bitcoin is gambling. Bigger bulb, vs smaller, vs healthy, vs rotted. (a Case Study), https://medium.com/p/81f5ffa42deb?source=linkShare-6c666494704c-1516693614, https://www.statista.com/statistics/326707/bitcoin-price-index/, https://globalnews.ca/news/3977745/ethereum-blockchain-canada-nrc/, https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/, https://seekingalpha.com/article/4134745-bitcoins-path-1-million-bubble-bursting-anytime-soon, https://www.youtube.com/watch?v=g-zIbVEjVpQ, https://www.youtube.com/watch?v=aeMv9uKpAZg, https://www.cryptocompare.com/mining/calculator/btc?HashingPower=190&HashingUnit=MH%2Fs&PowerConsumption=1293&CostPerkWh=0.12, https://en.wikipedia.org/wiki/Tulip_mania, http://contrarianedge.com/2017/12/01/bitcoin-millennials-fake-gold/, https://en.wikipedia.org/wiki/National_debt_of_the_United_States. 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. It remains to be seen. Today, Jan 26, at 11:30 AM, its trading around $31,850. The market can remain irrational longer than you can remain solvent. No one knows what the stable value of bitcoin will end up, and betting in either direction just seems like a fools errand. Hurry! Good comments Jon. Bitcoin is a case study, and they have no idea (or choose not to believe) that theyre headed for the unfortunate future footnotes of that case. They will have to learn the hard way. Mr. Money Mustache shares his opinion about Bitcoin. In a world of human trust, putting the wisest and most respected people in a position of Adult Supervision is a useful tactic. Also, just because something is open-source does not mean it cant be valuable. Then you have to pay a ton of interest to borrow it, and be lucky with the timing. Wow, you really have no idea how hydroelectric power works. That has happened before in the world. OK, But What if Bitcoin Becomes the World Currency? Incredible comment. ..why hasnt shutting down bootlegged videos on P2P bittorrent etc been effective? People are likely to disagree on whether this is a good thing depending on their worldview. I just hope my tax dollars arent used to bail these folks out. When the supply of foolish speculators dries up, the value evaporates often very quickly. 15% off everything you buy on Amazon basically. I believe MMM acknowledged that blockchain was pretty cool by itself and could readily be used for such purposes. It is an honor to be doing this session! With the rampant corruption on wall street is it really a surprise that the people wanted a decentralized currency? January 14, 2018, 1:05 pm, https://en.wikipedia.org/wiki/Foreign_exchange_market. I also remember that bubble..sure a lot of things moved to the internet but it had to crash..hard first. That is when we are talking equality and progress for all! if you over leverage yourself in any of these you can find yourself in trouble. 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. A large proportion of other coins are long term holds. Glorkvorn Some make the argument that blockchain on its own has some merits that may be so. Peter Mevoin Cryptocurrency could be the proverbial cure for cancer, but if its made illegal or heavily regulated through prudent or reactionary legislation (YMMV) it doesnt really matter, does it? Lets take the oil price in the middle of the last decade as an example of a real bubble. do not feed into this crap that there is no banking infrastructure. No. We will have to see if that new blockchain style will win out. They always do. No major government will transact in a currency it cannot control. Even a significant percentage would be really stupid. 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. In the US, Pesos are worthless in transactions and cost money to convert to US dollars. This is what is known as " The 4% Rule ". *pop*. Its only valuable when you cash it out to a real currency again, like the US dollar, and use it to buy something useful like a nice house or a business. Also, what is the source of that study? (Update from late 2018 Mike ended up being wayyyy wrong.). The strategy isnt sustainable. Its not that I enjoy seeing people suffer, but who am to talk them out of it? But at least 98% of MMM readers do not live in countries where this is an issue. 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