Tim, do you think Bitcoin cares what the Government thinks or wants? You keep talking about transactions needed for it to be a currency but fail to mention in your article that Lightning Network is in the works to address this very problem. An Aside: Why should we listen to you, Mustache? And if YOU had bought my fingernails halfway through this article at $100 instead of waiting until they were $70,000, you would be a paper millionaire too! It is not an investment. Ten years later and the price is still nowhere near that prior high, with it currently trading around $60. That's right -- it really does not matter (to me) why they split up. Tim Beck Remember 2008? 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. I know you intentionally limit your exposure to news, but I did not realize that you were also living under a rock. Hence, he advocates value investing not speculation. A currency that unstable cant be realistically used for transactions, even if you forget about its other limitations. Is this likely to be worth $20,000 long term? The good news is that more transactions alone wouldnt raise the energy cost (although more transactions are currently impossible anyway), and if Bitcoin raised the price of electricity in one country it would probably just cause people to mine somewhere else. other currencies already provide faster, cheaper transactions. When contracts cannot be broken nobody needs to oversee contracts. Shit. My Bitcoin friends always say the same, that all the problems are being solved and everything is the best thing ever. Ryan Thomas 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. If you think its a great investment, go ahead and buy some / a lot we are not stopping you. Staying the Course in War-Time. Hows that any different. Ive been investing steadily over a 20 year period. I couldnt find anything indicating countries are using bitcoin as a reserve currency. The amount of people who have posted on /r/personalfinance this year who sold crypto, then bought back in, and lost big, is astounding. Ive yet to find anyone who has. Then it started falling as people cashed out. That is about a 24% drop in 18 days. Mr. Money Mustache was a thirtysomething retiree who now writes about how we can all lead a frugal yet Badass life of leisure. Bitcoin values are delusional. 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? That shit is gonna go way way up to 50k! People suffer immensely. TO_Ont This inefficient design is now wasting more electricity than many entire countries. Since when was that a down year? Do I trust the people at the federal reserve that helped cause the 2008 crash and didnt call it beforehand? There are dozens more data points just like these. Use this 500K wisely and make our planet better! Everything youve said makes sense. Comparing bitcoin to tulip bulbs is intellectually lazy or deliberately misleading. So for it to be a global currency taco bell is going to have to start paying kids in btc. 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. Well thats all due to the crypto currency craze. Guys. 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. However, investing in Bitcoin now seems more along the lines of investing in a BBS in the early 90s. January 2, 2018, 8:53 pm. January 3, 2018, 12:48 pm. Today, Jan 26, at 11:30 AM, its trading around $31,850. Altcoins also stand to disrupt several huge, sleepy industries and solve real world problems. They are very valuable and the price is sure to rocket! Evan Drake April 2, 2018, 7:38 am. Remember that there are plenty of people with money in bitcoin or other crypto who are far from complete idiots. My heart would break if I said goodbye to $200k. And nothing that can go on forever, does. The reason is that its not an investment. Mr. Money Mustache is. The Bitcoin Faithful also mock me for considering all cryptocurrencies (current and future) as candidates for eventual dominance in transactions, rather than just assuming it would be BTC. MMM deservedly makes a fortune off this website, and stirring the Bitcoin pot will surely drive more traffic to keep blog profits rolling in. I wouldnt! I want to know will it make my day to day life easier? Are you sure Amazon pays someone in unusable (to them) gift cards? I had no idea the market capitalization of Bitcoin and the other crypto-currencies are so high. 2 Billion unbanked people on the planet to also enjoy a level playing field through this new Internet of Money. Not everyone agrees, but it cannot, unlike cryptos, be regarded as stupid. In Ancient Rome and today one ounce of gold bought a very nice dress suit. Id love to see MMM fingernail futures one day on my ticker chart. I think I found the mistake in your reasoning. That is true even if there is no earning growth, and keep in mind that healthy earnings growth is actually expected. 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. Sure, China is a renewables leader but it has limits. It isnt enough to live off of, but its definitely nice to have a net $500 or so in my pocket at the end of each month. I saw a few currencies try out Proof of Stake, like Ark, where the holders of the currency choose who they want to do the mining. Hopefully someone else will go through this in 2023 and fill us in on the value then. Ron Cameron January 4, 2018, 2:35 pm. Im thrilled to see the godfather speak on this. Bitcoin could also be the TCP/IP and will probably be the world standard in 10 years! Bitcoin dropped 20% overnight, so it is not currently a very reliable store of value. It takes an open, transparent society that trusts its elected officials to do RIGHT. After all, the ONLY thing that gives a fiat money its value is what someone else is willing to give you for it. Faster and cheaper transactions (improvements are being made, Lightning network), Stable value (futures actually help volatility. Marketed to unsophisticated investors as a get-rich-quick scheme. I could only shake my head. The most useful comments are those written with the goal of learning from or helping out other readers after reading the whole article and all the earlier comments. Long time reader, first time commenter (ha). The only thing I would add as a further disagreement to MMMs article is that speculation is inherently a GOOD thing. Gold bullion has several thousand years of history. TO_Ont Shorting bitcoin would just be speculation in the opposite direction. I was tempted by the neat aspect of being involved in this thing I knew would have some kind of future value blockchain. Don't look at prices, look at relative prices. Thats a really bad equivocation. Max Thunder I own my currency as it is today (EUR and USD), how come you do not own yours? You are a fine example of that specimen horse. Enjoy your crash. So we need more credible people to speak out against it. Trust yes. The price went on a historic and seemingly unstoppable run all the way to $150 per barrel in 2008. 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. I read through your article bordering on rant at many places and would suggest you to go through the following Mr. Money Mustache. Personally, I think this article shows that Mr Adeney has had his blog hijacked by the Anti-satoshi ;). Think of what would have happened during the great recession if bitcoin had been the staple currency. Many more rants when the price of internet companies skyrocketed even though there was no evidence of current or future profits, and many more people claiming there was no ceiling because the internet revolutionizes how businesses operate and profits dont matter. How much of your net worth is in this investment? If I add your state debt and unfunded liabilities, US is BANKRUPT! FriendlyPoster In that forest there are old bricks. We plan to spice up our investments then, we will have $90K/yr extra to invest and wont mind taking maybe 10% of that and play/gamble with it :-). On the other hand, if youre cool with allowing remote-controlled robots to kill 3rd world women and children in your name, then keep using only US Dollars. Glorkvorn But if it goes down, I wont put anymore money into it. You cant vote with your wallet in this situation, so you have no control over what practices the miners use. When evaluating investment bubbles, it means looking at where everyone is throwing their money no matter how many billions and being willing to say Bull. A Ponzi scheme is a fraudulent operation designed to steal peoples money. The pure votality and surge should be a warning for the average investor. I think its a bit of stretch to call Bitcoin a Ponzi scheme. Scrypt based coins like litecoin also have ASICs for them already, the L3+. Its a win-win situation.. Sorry*blockchain* may be worthy of accoladesNOT bitcoin. Glad to see some sense being written to the red necks who seem to inhabit this blog! rollie fingers I was so sad that I missed out again ;). Either way how about not alienate people based off their investments and act like an actual human being instead of a sociopath? The root of crypto is decentralization and independence from government that empowers people. Look at all the nations that proposed a EUR based oil exchange, all overthrown (no, not saying those were shining examples of humanity but the prioritization is simply correlated enough). Why should it not be? I am smiling because Im content to let others gamble. While stocks are likely a bit frothy, P/E ratios arent near the peaks they were circa 2000s: And important thing to note here is that underneath (almost all) stocks are actual engines of growth with hundreds or thousands of humans working hard, churning out profits, earnings, and dividends. Gold is relatively inert (wont rust except for very tiny amounts of oxydation), it is relatively easy to verify its authenticity (its malleable, the good ol biting the coin to see if it dents, you can melt it to look for impurities as well as hard to fake the colour with lead based forgeries). John Tucker (FWIW, CAPE had actually been studied in academic settings many, many decades before Shiller, and was a favorite metric of the legendary Benjamin Graham in the 1920s and 30s. I agree with you. I buy bitcoin with the expectation that bitcoin will solve the problems it currently faces and become more widely accepted thus increasing demand driving up the price. Either way it wont end badly right? Prices would rise, especially if the supply of these pills was limited (just as an artificial supply limit is built right into the Bitcoin algorithm.). 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. MMM, you cannot call Bitcoin Stupid and then go tangentially into an Utopian discourse. January 2, 2018, 8:01 pm. His main investing motivation because he feels like hes late to the game and wants the earnings he could have had. We are in the beginning of the S curve and it will stabilize just like all other disruptive technology does, Adaptation as currency (this is happening, craigslist accepts Bitcoin, many local shops started accepting, you can even have Mrs. MM get paid by bitcoin on etsy. Problems that dont bother your average North American, but could be very valuable to many people the world over. Great post. It seems like youre advocating for scenario #2. Thanks for sharing your opinion! FullTimeFinance 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. I argue that fiat currency is inefficient because its supply is always increasing. Bitcoins are all the same, they are not numbered, they dont rot and dont have a shelf life. December 10, 2018, 5:45 pm, Dang! I think the far greater chance is your comment will be the joke. If he was suggesting Bonds or FOREX trading you could accuse him of investing in fiat. Any efficiency brought to commerce through blockchain technology are very likely to show up as increased dividends from index funds. But there are interesting aspects to the technology and what it could develop into. ), but not because they did anything useful or produced any money and value to society,. Christopher R Young A stock is not a ticker symbol; it is a stake in an underlying business. 15% off everything you buy on Amazon basically. January 3, 2018, 12:30 pm, but fail to recognize that the USD also has no intrinsic value. I have these lovely tulip bulbs for sale, please PM me. I really would hope that MMM doesnt sell out like most social influencers but regardless not understanding the technology is no excuse for spreading fear, uncertainty and doubt about it. Every currency has something behind it. LennStar No bubble lasts that long and keeps growing exponentially. If you introduced a brand new commodity to the world, would you expect the price to be stable? Love this blog and agree with most of your opinions on Bitcoin. 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. Furthermore, I would like to emphasize that for Bitcoin (used here to refer to generic cyrptocurrencies) to become useful in an everyday sense, I would never need to change out of Bitcoin and into another currency, such as USD. Ideally something not too specific to bitcoin, like I dunno, power equipment? Because the banking system is corrupt and big government cant watch over it? Value is subjective; not all speculation is irresponsible; gold and other odd stores of value have novelty effects. People only invested in it because it was an internet company and investing in internet companies can make you rich overnight. January 3, 2018, 12:15 pm. We cannot have better living conditions for half of humanity on this planet under a corrupt and manipulative central banking system of various countries, that are not even true democracies. No one is suggesting that investing in mining is a good idea. So, Bitcoin is supposed to replace all forms of physical currency in theory because people dont trust banks. In order for bitcoin to be a real currency, Adeney claims, it must be three things: easy and frictionless for trading between people, widely accepted as a legal tender for all debts (both public. Dr-In-Debt 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? Id love to know what your background is. MMM says: There is no intrinsic value in cryptocurrencies. Thanks for your perspective on an interesting topic. Even a significant percentage would be really stupid. True. Unfortunately for most people that think they are missing out on everything, they are being lead to Coinbase and only buying the cheapest tokens available, namely Litecoin because Ethereum and Bitcoin have gotten so expensive. I think your point about time wasted is very accurate. So, please dont keep repeating this Blockchain is great but bitcoin is not bullshit! The cryptocurrency is the glue that holds the system together. Research Ethereum further. The Money Mustache Community . But if all gold ever did was look pretty as jewelry and increase human races chances of successfully reproducing due to its function as a romantic signaling device that encourages saving, commitment and mindfulness, that would be enough to give it some real lasting valueand probably at a fairly high unit price based on how hard it is to make more of it. But from now on, Im going to replace that sob story with this: Man, I missed out on MMM fingernail clippings! to remind myself of the absurdity of that imagined sunk cost Ive burdened myself with. 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. The problem with speculation is that the few that get in early certainly do make hordes of money at the expense of hordes of people that get in when speculative mania is at its peakinevitably to crash at some point. A lot less then the advertisements made for taking those things away from you. Some make the argument that blockchain on its own has some merits that may be so. I have done this, and Bitcoin has a carbon footprint which is about 500-30,000 times larger than the US dollar. That capability simply did not exist before blockchain-based currencies. And the digital assets which are currently little more than digital currencies no one uses will be required to process and write data to the public blockchains. January 3, 2018, 5:30 pm. That is a fairly dumb sock puppet, since he never spoke about them. Cryptocurrencies are extremely risky. I believe MMM has missed the point completely in his rant above. Research further. 15 Replies 10705 Views March 26, 2020, 05:23:27 PM . Max Your Freedom Millions of people streaming interactive video games. We also both wear wedding rings made of gold and are quite happier with them than if they were made of copper or tin or lead or nickel or mercury. 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