They know him as Mr. Money Mustache -- a gentleman who retired at the ripe age of 30 without a million-dollar salary. He appeared on the Kevin Rose podcast as well. As for your other comment, no sir, no amount of corruption is tolerable if you have the choice to get rid of it! 0 replies 0 retweets 3 likes. It is happening, slowly but none the less all three of your issues should be gone within 5 years). Stefan Brand There is a related problem that Bitcoin transactions are too slow and too expensive to be practical. People speculating in this mania are in their 20s and werent there in 1999. January 2, 2018, 7:03 pm. January 2, 2018, 7:11 pm. Blockchain may be the future, but that doesnt mean any of the current currencies will be worth anything. They were literally carting around wheelbarrows full of the note because the hyperinflation the government produced killed the currency. We end up in Utopia? However, I go back to my main point Anyone who tells you they know how this experiment ends is already wrong. to convince them myself. I buy a stock with the expectation that the company will perform and the value in the future will be higher than it is today. January 17, 2018, 9:00 am, bitcoin is down 50% in the past three weeks. In short, historically gold is the truest measure of value, the safest store of wealth, and best insurance against fiat money and other manias (see Weimar Republic circa 1934). So, how is Bitcoin better or different? 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! 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. Something a step up from bitcoin t-shirts but nothing too risky. I read somewhere on Twitter (cant remember where) that you can use anyone who uses Blockchain as a proper noun as a heuristic for how little they know of the space. (Serious question. If you think its a great investment, go ahead and buy some / a lot we are not stopping you. You are a fine example of that specimen horse. Rather like italicising. Im 100% with you when you say investing in bitcoin (and other cryptocurrencies) isnt smart. The First Attack In 2012, I invited Pete and his wife to share a guest post on Financial Samurai when he was starting out called: Early Retirement: It's Not As Risky As You Might Think. Alright then, do you have all your money invested in cryptocurrencies? Vijay how can it be a useful currency without a relatively stable value? I am not trying to promote it for this purpose, but it is not an invalid choice. The growing demand for more electricity is the most serious issue with Bitcoin, IMO. Market prices are not set by consensus. There you go. LennStar 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. Mr. Money Mustache was a thirtysomething retiree who now writes about how we can all lead a frugal yet Badass life of leisure. When I hear someone claim an investment in Bitcoin I end up smiling politely and correcting them on one point. January 15, 2018, 11:44 am. it is as simple as that. For a shortcut to understanding good investing, you can also simply look up Warren Buffets thinking on almost any topic hes careful enough about offering opinions that by the time he makes a statement on something, you can be pretty sure it will be among the best answers out there. WHY HAVE YOU NOT INVESTED YET!?!?! Ryan Thomas Hopefully someone else will go through this in 2023 and fill us in on the value then. Just Keep Calm, and Keep Investing Despite all of this hype and all the froth in stock prices, a true investor's plan can remain stable through the seasons. Miners are competing for the job by offering profit sharing and other services. 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. This volatility thing that seems to be biting you folks is because Bitcoin is at 200 Billion capitalisation today. Ive been watching this situation for a few years, and assuming it would just blow over so we wouldnt have to talk about it here in this place where we are supposed to be busy improving our lives. I completely agree, investing in Bitcoin is JUST like investing in lottery tickets. Now the ball has reached proportions where it could blow up anytime, and people in this forum are talking about the small change like the bubble and P/E ratio in the stock market. 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). As soon as I read you were selling a bag of your nail clippings for $100, I thought to myself that is a great deal! Sorry, PoF, Im staying away from your Bitcoins until I see a Tweet about the ones filled with chocolate. We will see you on the other side of the crash. Unless youre a rogue nation trying to dodge sanctions? Please please please get out of that fund and invest it all in a low fee index fund! Id love to know what your background is. Even if Mining gets centralised, Bitcoins future cannot be dictated to by them! Buying real estate, gold, stocks, even ETFs and Bitcoins, all of these have risk. Everything currently is too expensive. Well, that is not what we are discussing are we? They dont tend to go longer than that. Lets get this straight: in order for Bitcoin to be a real currency, it needs several things: Bitcoin has none of these things, and even safely storing it is difficult (see Mt. Love this blog and agree with most of your opinions on Bitcoin. 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. Im more inclined to trust contracts that cannot be broken. About the Comments Section:Normally, I try not to publish comments that are just emotional reactions or totally uninformed. I can 100 percent guarantee you that my mom and pop will still be using fiat paper, and so will I, and so will the worlds governments. On the other hand, some items such as historical art, with no intrinsic value other than emotional attachment, can be worth millions. Lottery tickets might be a good investment for you too. Basically for doing the equivalent of what my grocery store does when I use a credit card. Comparing bitcoin to tulip bulbs is intellectually lazy or deliberately misleading. Danny Livewire Worth at least an extra couple bitcoins there. Research further. How much are these companies worth today? Bitcoin mania isnt different from the dot.com mania or any other mania going back to the tulip mania. Ryan Thomas Even the USD was a deflationary currency till the 60s after which Nixon got it out of the gold standard. The bidding up of prices in pursuit of speculative riches is not fine. January 4, 2018, 7:36 am. Good comments Jon. The only reason the dollar is working as money is because it started out with gold backing and then they gradually removed the backing. I thought it was pretty genius when back home. Is it speculation, sure, but its no different that speculating on the future price of a stock, or oil, or the rental market. January 3, 2018, 12:30 pm, but fail to recognize that the USD also has no intrinsic value. Saving billions from poverty, war, and the enslavement of banks or the lack of any banking is Altruistic. Thats pretty much it. However, cryptocurrency is what incentivizes the network to secure a blockchain, so theyre two sides of the same coin. January 2, 2018, 6:46 pm. Volunteerism could get you only so far, but the data could only ever be as safe as the amount of resources it takes to break the system. Millions of people streaming interactive video games. . A bit frothy? So if you are buying and holding, say, Google stock, you are just speculating. TomTX, nothing was answered. Talk of being blissfully ignorant! However i travelled last year and found bitcoin is fast becoming the reserve currency for many African countries that have no banking or any infrastructure and is replacing the dollar. Individuals getting rich off speculation doesnt mean its not speculation. ), Im in the same boat. The problem with Bitcoin, (really all of the crypto currencies) is their value is not tied to anything of value. But there are interesting aspects to the technology and what it could develop into. Bitcoin and other Cryptos are attractive for that reason and that why people spread this misinformation about it to sway people from backing it. 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. January 2, 2018, 5:49 pm. Hows that Nvidia stock doing now that GPU sales have been skyrocketing this last year giving them two record years in 2016 and 2017? Tulips. https://t.co/wfi8XTq77s" Why do you think so? Yes, you can hedge in other things, but gold is fungible, dividable, small enough to hide, and has been valuable for centuries. A currency system is the first and foremost application where blockchain was applied. Youre not going to get rich by collecting metals, but you might stay rich with them. Since every appliance (computer, lightbulb or actual heater) is a 100% efficient electrical heater in a thermodynamic sense, you could shut off your heaters and run mining computers instead, to get the same amount of heat. Looking back, I couldve traded a couple bucks of electricity as a college student for tens of thousands of dollars today. Thanks for your perspective on an interesting topic. Bitcoin is actually a saviour that provides the world an opportunity to get out of total mess without fighting a WW3! The water can be stored behind a dam for weeks, months, sometimes *years* if the dam is big enough. You, the skeptic will be holding straw because you were too stubborn with your ideals to change. China is also a leader in renewables space. 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. Rule of thumb is never put everything in one basket. Its closest to an MLM for me. Gold has always been considered a commodity of high value. As a result, changes in perceived value result in big price swings. January 3, 2018, 12:55 pm. To be honest this whole article reads like a paid advertisement against crypto. VTSAX returned over 22% last year. Right now if bitcoin enjoys the lead, what is there to call it stupid. 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. If you ever want to see what a real bubble looks like, please look at a long term chart of stocksor dollars for that matterpriced in gold. MMM writes things like currency should not be artificially sparse and should expand. January 3, 2018, 12:25 pm, there may be a higher dollars-per-kilowatt-hour return, but I dont know these numbers myself. There is no reliable way to track or trace paper. As a result, I have cashed out on their misfortune. Are you saying wisened mustachians own no stock or ETF of any tobacco companies? Satoshi, the founder, sits on 10% but he has never spent a single cent. Not a penny was wasted. Although I do get where MMM is trying put an emphasis on the difference in investing and speculation. What value is there? Think that would fly at the grocery store? Im just curious what your motivations are for all your comments. (Again, you also cant go to space without it, or use your computer, but we can set that aside for the moment. Thats why wind farms are much more economical in areas with large scale hydro. Amazing. Many African countries have central banks. Exchanges get hacked or hacked (where the operators secretly run off with the coins) all the time. Like every state currency, it derives its worth out of the fact that the state says you can *always* pay your taxes with it (and that shops have to accept it). dont understand why you say it will cost more? The government has done some sickening things to ensure the wealthy and powerful stay wealthy and powerful. I for one am lucky enough to participate in the birthing of an alternative financial paradigm so that people have choices. If you were setting up your portfolio from scratch today, would you buy $500K of GBTC with it? Retweeted. Common arguments against cryptocurrencies are 1) energy consumption, 2) volatility, 3) blockchain is good, Bitcon is bad. I dont know that page very good, but I think that answers this question ;). Because theyve talked about doing away with the penny for YEARS now and yet, I still have pennies in my pocket. Im patiently watching on the sideline to see how this is going to pan out. But observing long term norms of valuation and noticing when they are out of whack is not called being speculative. Humanity deserves an alternative to government (aka the financial elite) controlled money. I believe MMM has missed the point completely in his rant above. 3 years and 1 week later. Is having 1-2% of my overall portfolio in cryptocurrency stupid? No, not to me. My disagreements w the article summarized: That is why its so disheartening to see someone as wise as MMM titling an article with the incredibily ignorate phrase Why Bitcoin is Stupid. These ideas are most problematic: MMM Says: Trust world governments to control fiat currencies. January 15, 2018, 9:02 am. Bitcoin is used for some pretty awful things, the accountant at my dads prior employer stole $500,000+ and likely hid it from the authorities. Yes, that is your ground reality today. Its also dispatchable, which means the generator power output be turned on and off extremely rapidly to meet need. Max Your Freedom The value of bitcoin is very far removed from any sensible fundamental valuation, and the thing driving up the price seems to be a common sense that it will be worth more in the future. Devs in their mid 20s who owe the IRS 50k and lost most everything. Mr. Money Mustache's argument easily boils down to the soundbyte that "bitcoin's price is fundamentally unpredictable, which makes it a terrible investment decision.". There are other points that I cant think of right now. Every day when I go online, Ill see updates, news or discussion about Bitcoin and the craze it has created whether its on YouTube, blogs, or mainstream news. Theres no way I could have paid down my debt and netted $14.5k in stocks in less than a year with less than $5k in capital. 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). Peter Mevoin Absolutely, so Ill proceed with it. I dont think Bitcoin will be very snuggly. 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). Personally, I disagree that speculating is inherently bad. It can be forged. There valuation of pretty much everything but Bitcoin and Ethereum is unjustifiable. how is this different than a crypto? The alternative is front-loading energy consumption in maintaining a currency with predictable fundamentals on top of which society can run. So, all of the normal, previous ways of saving have been destroyed & the banks/corrupt bankers get bailed out, over & over & the regular people are sick of it. The fees are incredible. Absolutely. Vivek Prasannan Why would the author call this act stupid? Holding gold is not an investment in this case, it is a hedge. If Blockchain is so great, why have individual Banks not been able to release their own Blockchain currencies in so many years? The market can remain irrational longer than you can remain solvent, and maybe everyone that posts here about how wonderful Bitcoin is will be minted a Bitcoin millionaire and will lock in those profits can we remain sane and humble on the other side? 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