No, I am more inclined to trust economic models where the rules are clearly defined and cannot be changed, by anyone, ever. 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. Governments have no choice here. But its not some spectacular Instant Trillionaire piece of magic. I wonder why. Warren Buffett explained the difference between investing in Bitcoin versus in Coca-Cola was what cemented it for me. Update, my fingernails are up to $160,000 now. Is it possible youre confusing the message of this article? Also, not all crypto currencies use PoW to mine / verify transactions. If a good provides value to just one person without hurting anyone else, then it provides value to society. Just like we could end the climate castrophie in a couple years if everyone decided it was a priority and started working together to fix it, we can end milennia of war and economic oppression in just a decade or two, if we take back control of our money. Sorry*blockchain* may be worthy of accoladesNOT bitcoin. 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). And this, MMM There are no financial instruments that will protect you from a world where we no longer trust each other. You call it trust. This inefficient design is now wasting more electricity than many entire countries. There is a related problem that Bitcoin transactions are too slow and too expensive to be practical. :) If youd like a link, just holler! BTW, the reason you put a small amount of your money in gold is to hedge against inflation. Mr. Money Mustache was a thirtysomething retiree who now writes about how we can all lead a frugal yet Badass life of leisure. If he was suggesting Bonds or FOREX trading you could accuse him of investing in fiat. January 2, 2018, 5:52 pm. It has now grown quite a bit, of course. Dont you find it strange, though, that my grandfather used what you call toilet paper to buy his first car, and his first house? Scott Nicholson Take a look at this shot from the website coinmarketcap.com, and observe the preposterous herd behavior in real life: Fig.1: Various cryptocurrencies, ranked by how many people have been fooled. 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. BURST ( http://burst-coin.org ) as an example uses PoC (Proof of Capacity). 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. Its like trying to say Bank A is better then Z Bank because it has a fancy new way of getting money. Its like saying they are investing in lottery tickets. Say I trade you a car for 1 bitcoin on Jan 8. While silver and copper has been used as a form of money (notably imperial China, it was a silver based society with gold used as a high currency), golds special attributes has always been seen as a form of value storage and trusted trade medium. If you do not know, We have prepared this article about details of Mr. Money Mustache's short biography-wiki, career, professional life, personal life, wife, girlfriend, dating, divorce, kids, today's net worth, age, height, weight, and more facts. Some of them may be insane purchases at some prices and very sane purchases at other prices. Im not so sure youre right about mining them though, especially if you mine with computer hardware that you already have. LennStar If they had money in gold they could have mitigated some of the affects of the politicians and bureaucrats in those countries (and the IMF). When my daughter asked what you could do with brick dust, the kids looked at her like she was an idiot and said, Well, buy more brick dust, of course.. Bitcoin and altcoins consume a ridiculous amount of energy. Apparently the friend had doubled his money. Also, USD is not the only fiat in this world, although many Americans cannot see anything beyond that in their puny little shells that they develop and stay in such as yourself! 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. 1) If gold is a bubble, it is a > 5000 year one If you dont have the Bitcoin in your own (encrypted, hardware, offline) wallet, you dont actually control the Bitcoin. Hardware. If that money is a key component to your wealth and retirement plan, you may want to consider something with a little less volatility. Because when the Northeaster blows through my town and knocks down a power line, I want to pay the 15 year old kid who knocked on my door and shoveled my driveway $30 bucks. Your highly emotional responses arent helping your case. Slaves to banks and few elites? Whatever they are willing to pay to enjoy owning these things themselves is their business, and may make for a fairly rational purchase. One reason why everyone is piling money into BTC and other crypto might be because the stock market is way too expensive right now. Max Your Freedom Ignore this utterly irrational FUD and embrace the digital world. Ive been thinking of doing just that.. And then I put it off for a few weeks, and the price jumps up exponentially. Its odd he believes people require a government to establish a system of trust and cooperation. Because I still cant pay for groceries in my town without swiping a card or handing over some US dollars. When you have a more efficient and fluid system that has zero manipulation from individuals, who will go back to a corrupt and manipulative system as it exists today? But youre entitled to your opinion nonetheless. meep er Environmental issues aside, mining with hardware you already own for other purposes is about as close to getting something for nothing as there has ever been in the world, it lets you make money with something that is only otherwise useful as a way to play PC games. In the mean time, Ill keep selling the bitcoins that I purchased for $30 each at $15k a pop. Holding gold is not an investment in this case, it is a hedge. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Take a look around. 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. their invested dollars add value to a society the moment they are employed.. January 19, 2018, 6:45 pm. You can keep saying its a bubble for eternity. January 5, 2018, 8:29 pm. One of the 3 points MMM stated it needs. :), https://twitter.com/elonmusk/status/941500121564332032, farmecologist Like my double comment? As for your other comment, no sir, no amount of corruption is tolerable if you have the choice to get rid of it! Bitcoins etc does not make it easier at all. January 2, 2018, 9:01 pm. Jeremy Collins Those who are in it are using it for speculative purposes, not as a currency. Good points. Same wishes to you on your toilet paper fiat money my friend. This video epitomizes the Bitcoin market right now. @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. obsolete. So I did learn a bit about locking and unlocking information, hacking, and ensuring that independent brains (whether they are two adjacent CPUs on a circuit board or two companies negotiating across the Pacific) can trust each other and coordinate their actions in lockstep. You keep spouting off nonsense. Discussion with friend from nVidia is irrelevant to bitcoin mining. Its a little like taking out the garbage. Its like Winston Churchill said: Gold is the silliest, most irrational thing you could ever use as money. The problem with Bitcoin, (really all of the crypto currencies) is their value is not tied to anything of value. Most of this money is being spent on military operations to secure foreign resources and kill people will dissenting viewpoints in the name of national security. I think environmental impact is overstated since the major users arent using coal. 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. i could talk for hours on the subject but Bitcoin is here to stay as it has already become central to a growing number of economies. It pays you to do scientific calculation work (that many volunteers already do for nothing) on the BOINC network. It will NEVER happen. 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. Dan, I am not angry when someone says they dont want to invest in it. Im fine with crypto but not as an investment. This fiat economy itself is only 40 year old. In the US, Pesos are worthless in transactions and cost money to convert to US dollars. We live in a world where both can, do and will exist. Its very informative and answers many questions you raise, 2. Then Ill stick with what works for me now. Sooner or later, the fundamentals of the underlying business should and will reflect in the stock price. Think about how tomorrows generation will use far a more advanced blockchain tech to interact with far more advanced internet and general tech to create things that we cant even conceive of yet, let alone why they would have value. An example for this would be Ripple (like you mentioned above) which is working closely with banks to make international transactions better. Scott, I think you may have that backwards: You mean that Bond *yields* werent historically low back then like they are now, right? The only reason the dollar is working as money is because it started out with gold backing and then they gradually removed the backing. That is what is pissing me off. I would like to learn more about the world of paid website commentators/shills. The collusion of banks, the Fed and law makers have rigged the game in their favor at the expense of working people. months) so other storage mechanisms are needed. The reason is that its not an investment. As the legend goes, an anonymous developer published this whitepaper in 2008 under the fake name Satoshi Nakamoto. This is not correct. Not the only reason, but if earnings dont pan out, stock prices wont necessarily drop. January 16, 2018, 4:53 pm. It is an honor to be doing this session! Could you please tell us what you are invested in and when you got in? 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. 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. > . That is why our civilization used that rather than perishables or iron. 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. Mr. Even if Mining gets centralised, Bitcoins future cannot be dictated to by them! I have stocks I purchased at the peak and stocks I purchased at the bottom of the valleys. Its clear from reading the comments that most people dont understand how this works. But the fantasy that the world will switch to Bitcoin so you'll need it to conduct commerce so you better get yours now is just totally implausible to me. January 3, 2018, 12:48 pm. January 15, 2018, 4:00 pm. Take risks, but keep educated and with good money management. Lady Dividend January 2, 2018, 6:06 pm, Agreed! Thats a really bad equivocation. , Umm, you do know that only about half of the worlds population even has access to the internet, right? Feel free to throw in some early questions. I made 400% and pulled them out. 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). January 3, 2018, 12:26 pm. TO_Ont 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. Nothing wrong with speculation, as long as you are doing so responsibly and understand the risks. 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. Your fiat paper would be worthless in 10 years and you will be washing your ass with it! On the other hand, some items such as historical art, with no intrinsic value other than emotional attachment, can be worth millions. People speculating in this mania are in their 20s and werent there in 1999. While cryptos are new, they also dont meet the needs of traditional cash flow analysis but for a new asset class but just because its new doesnt mean its a bad idea. This is not characteristic of a healthy financial system (particularly so many years into a global recovery), but rather a zombie one thats been artificially propped up since the financial crisis. January 3, 2018, 7:32 am. There are many reasonable prices for these goods that are non-speculative in nature. 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. January 3, 2018, 7:13 am. Youve made a great profit, and you can play with that $28k. Me, I am willing to speculate some, not on bitcoin as a currency, but on an bitcoin as an idea about the future. Im only a mediocre computer scientist. 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. The imaginary value of these valueless bits of computer data representsenough money to change the course of the entire human race, for example eliminating all poverty or replacing the entire worlds 800 gigawatts of coal power plants with solar generation. All points noted. In one of my IRAs I bought some AAPl in 2009 for $28k. False analogies. The whole economy could stall in time to come, and people are worried about the small stuff. But maybe an iteration of that will be. Youre not going to get rich by collecting metals, but you might stay rich with them. Its interesting that you state the high water mark was $700,000, but now its $500k. Mr. Money Mustac. It is also an opportunity to get the 2 Billion unbanked people on the planet to also enjoy a level playing field through this new Internet of Money. Don't look at prices, look at relative prices. Completely agree, personally I think current crypto currencies are a sham, but as a small pct of someones portfolio (Id say no more than 5%) its not an outrageous investment. Mr. Butler Update, three years later: Since I wrote this, the imaginary price of Bitcoin has continued to be all over the map it initially dropped over 70%, then it went back up many hundreds of percent, over and over. This idea that you HAVE TO OWN ONE FULL BITCOIN is madness. Mr. Money Mustache is another veteran personal finance blogger. Great article! Not going to do this with you.. =. If you think you are hardcore enough to handle Maximum Mustache, feel free to start at the first article and read your way up to the present using the links at the bottom of each article. If you're like most Americans, you're a few . As we know from MMM teachings, safety and security are lies. Of course, I doubt we are already at the 10%. January 2, 2018, 9:18 pm, MMM, heres a calculator that updates to show the real time profitability of mining various coins: Consensus over its value. January 4, 2018, 9:20 am. If not, you may want to think about selling., Scott Nicholson 1) Energy consumption Bitcoin consumes a massive amount of energy to secure the network. I think in five years bitcoin will pretty much disappear. If people are creating an bubble out of it, people is stupid, not bitcoin. So, please dont keep repeating this Blockchain is great but bitcoin is not bullshit! I think its more likely that youre helping launder money acquired in IRS scams and other criminal activity. The dams generate electricity whether you need it or not. People suffer immensely. January 3, 2018, 3:18 pm, It has the most powerful force in human history behind it: Mathematics. It a high-tech form of protest. Is Bitcoin eventually going to replace the physical green back dollars and coins in our pockets? 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