Take the decentralization, the trustlessness, the miners or the currency out and you throw the immutability out. Mr. Frugal Toque Are you saying wisened mustachians own no stock or ETF of any tobacco companies? Even if they made a hundred trillion dollars next year, you wouldnt see any of it unless you sold your stock to someone willing to pay a higher price for it (or they started paying dividends). Well, shit. Many African countries have central banks. You invested in GBTC? The NEW, BEST way to absorb all of this monetary wisdom is to subscribe to the newsletter and boot camp using the boxes to the right -> The sooner we debunk the myth and come to our senses, the richer our world will be. These are all things that people have bought in the past, and driven to completely irrational prices, not because they did anything useful or produced any money and value to society, but solely because they thought they would be able to sell them to someone else for more in the future. ..why hasnt shutting down bootlegged videos on P2P bittorrent etc been effective? Ive been thinking of doing just that.. And then I put it off for a few weeks, and the price jumps up exponentially. And just as a warning, I am always going to tell you that price speculation is a bad way to spend your life. Of course there is speculation. You sound like I poop-obsessed wing nut. The ones that take off will likely be govt created versions. The potential upside outweighs the risk of the initial cost. Een of andere blog . Yes, it is true that bonds are *also* in a bubble at the present timeand that the bond bubble is so big that it makes stocks look relatively cheap by comparison. Mr. Frugal Toque Power consumption from bitcoin mining would only amount to a fraction of 1 percent of global demand even in 2020. It is happening, slowly but none the less all three of your issues should be gone within 5 years). How is that even possible? But boy, are you wrong on this one. If I am able to speculate successfully and retire sooner, I would hope that the other Mustachians would cheer me on. No difference there. But consider some things that will live up the hype.. like improved immunotherapies for cancer or Crisprs ability to cheaply edit DNA line by line. They will have to learn the hard way. 0 replies 0 retweets 3 likes. Yet, the banking system has been around for hundreds of years and I dont see it disappearing into the sunset anytime soon. Brent Weaver as long as people in their consciousness believe it is a store of value it is. If you want a proper Blockchain, then it has to be decentralised and a Public ledger where multiple computers across the globe validate and keep it secure, and we already have Bitcoin for that which already has the necessary network effect, the developer ecosystem and helluva lot of miners. Is it likely worth closer to $0 than to $20,000? Over 3.5 billion people have no internet access; I am sure this is true as I thoroughly researched it for a chapter I published in a book this year. He and his wife studied engineering and computer science in Canada, then worked in . MMM, you cannot call Bitcoin Stupid and then go tangentially into an Utopian discourse. They always do. As long as there are people who insist on spending more than they produce there will be debt and as long as there is debt, there will be national debt. Good comments Jon. You gotta have it. 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. It has now grown quite a bit, of course. Have you ever taken a look at how correlated the stocks of an index were? We have been in an expansion (the weakest one in US history) for almost 9 years. I would recommend everyone to do their own research because many of what MMM says is plain wrong. For this article, I have set the bar much lower to show you the religious conviction that crypto speculators have. January 2, 2018, 6:09 pm. Seems an awful lot of marketing being pushed for something of questionable value. It also has technological demand. Gox, Bitfinex, and the various wallets and exchanges that have been hacked). You have unwittingly tripped up your own argument here. My mother in law collected beanie babies and I had the pleasure of looking up their worth this Christmas back hometheyre about $5 each and I will owe eBay 10% + shipping. 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. I dont care either way about bitcoin and am not even sure why hydro comes into the discussion, but you cant say something so blatantly 180 degrees false and expect not to be corrected! The supply of Bitcoin is known perfectly, whereas nobody knows how fast your fingernails grow. 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. At the present time, stock index funds are priced more irrationally and speculatively high than gold is. Money only has value if it is stable and trusted. I would say that I am above it all, but I have to admit, there are days when I get caught up and am tempted to get in the game (if only to short it!). You know things arent a good investment when there are Bitcoin ATMs at bars. No, I am more inclined to trust economic models where the rules are clearly defined and cannot be changed, by anyone, ever. Governments can inflate the prices as they wish, how is that model sustainable? 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? Appreciate the term scarcity. 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. It has a track record though ill give you that. I completely agree, investing in Bitcoin is JUST like investing in lottery tickets. 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. There are dozens more data points just like these. For a long answer you need to understand the technicalities of it which I am not going to educate you on! 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? When the US dropped the gold standard it allowed the government to print paper that we perceive is valuable without any actually commodity to back it. He is typing in capital letters to draw attention to specific words. I dare you to look it up! Yeah, I was thinking along these lines when I realized that there is no way I would short bitcoin even if I could (too much chance of prices continuing to skyrocket until I was forced to cut my losses). Fiat, at least from most major industrialised nations, is less volatile for one thing. Undoubtedly the bubble will burst or mining difficulty will increase, but Ill be able to sell this supercomputer to some nerd play World of War Craft on. Thats a tricky question. drugs, prostitution, gambling, etc.) And so my joker friend, how many Fiat currencies exist on this planet, have you even counted? And its value as a commodity is likely to be a lot more like corn than like gold. Mr. Money Mustache shares his opinion about Bitcoin. Some people like owning pretty jewelry. 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. Rather than maximize profits, what about minimizing regrets? January 3, 2018, 7:32 am. Bitcoins etc does not make it easier at all. Humans are conditioned for shortcuts in all aspects of life. Cryptos may be the money of the future, but there is nothing sane about its rise this past year. 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. Dont you find it strange, though, that my grandfather used what you call toilet paper to buy his first car, and his first house? His main investing motivation because he feels like hes late to the game and wants the earnings he could have had. You respond with an implied personal insult. Since the Fed can always print as much currency as it wants, I would probably bet on scenario #2 as well, so perhaps were half in agreement. Certianly seems like Vijay has some vested interests in Bitcoin..it is pretty obvious. 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. Thats why wind farms are much more economical in areas with large scale hydro. January 3, 2018, 7:23 am. The bitcoin price isnt rising because people are buying the coins to conduct real business. We clearly see them in Africa, Middle East and Latin America. Yes, that is your ground reality today. (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. Bitcoin dropped 20% overnight, so it is not currently a very reliable store of value. Then the mining ist just looking up data in this table. As we know from MMM teachings, safety and security are lies. But not possible with Bitcoin transaction costs for BTC are up in the integer $ range and can take hours. I try to lead people to conclude what I have. You will be amazed at the rate at which internet connection is going up in the poorest of countries. It can be entertaining, though, to sit there and watch people who just happen to have $7k in small bills on them feed it into the machine at 2 am. but fail to recognize that the USD also has no intrinsic value. But maybe an iteration of that will be. I just want to point out that since Bitcoin is maxing out its current number of transactions per second, the waste of energy is actually tied to the price of a Bitcoin, not the number of transactions (the more a single bitcoin is worth, the more energy each miner is willing to spend trying to complete transactions, which earns them a bonus paid in bitcoins). Holy cow, its wasting that much energy Vijay? ), but to include gold bullion is not quite fair. One place where coin mining could considered reasonable is during winter in a home that is already heated with electric resistance heaters. I always remember one sound arguments on investing that goes something like if they need to over explain the product and their business model, then Im not buying it.. Theres nothing fraudulent about Bitcoin its mass hysteria driving demand. We live in a world where both can, do and will exist. Taxation does not give money purchasing power. Thank you! gov issued currencies = Human trust and cooperation. Its interesting that you state the high water mark was $700,000, but now its $500k. Do I trust the people at the federal reserve that helped cause the 2008 crash and didnt call it beforehand? MMM typically suggests going long in index funds, not bonds. I agree with you. One thing in that seems to be missing in this conversation that Bitcoin maximalists will always point out: January 3, 2018, 12:06 am, Sounds like a classic case of sour grapes to me :-), Cameron People are looking for something that is undervalued to put their money towards. I am already looking forward to looking back and laughing at all the companies who did away with their normal businesses to become mining companies. I argue that fiat currency is inefficient because its supply is always increasing. . It's the ultimate win/win because you just set it and forget it. My friend who has a Masters in Computer Science inquired with me about investing in Bitcoin before Christmas and I told her essentially what I thought as mania. Because An investment is something that has intrinsic value.. Chris Urbaniak Transaction fees on the DASH network are effectively 0. As platforms. Ryan Thomas Feel free to throw in some early questions. Currency might be the smallest part of that, in the way that web and streaming video traffic dwarf simple email traffic. The sooner we debunk the myth and come to our senses, the richer our world will be. Its not as simple as you make it personally. 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. You write that These are all things that people have bought in the past, and driven to completely irrational prices,. As far as Im concerned, this is the final word on Bitcoin. Love this blog and agree with most of your opinions on Bitcoin. No doubt it will crash but I think it still has room to go. 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. There are no financial instruments that will protect you from a world where we no longer trust each other. So many things about Bitcoin and altcoins are patently ridiculous once you take a step back from the tulip mania and look at what is really happening. Michael I can trade with anyone in the world for a low price (not necessarily with bitcoin as the price has gotten expensive but with other currencies). Id love to see MMM fingernail futures one day on my ticker chart. https://www.cnbc.com/2017/12/21/no-bitcoin-is-likely-not-going-to-consume-all-the-worlds-energy-in-2020.html, Biglaw Investor 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. So just like you say theres nothing stopping you from creating your own Bitcoin, its the same code.unless you could attract hundreds of millions of dollars of computing power to ensure data integrity on your blockchain, its as worthless as your nail clippings. Unconfirmed BTC transactions already in the 6 digits now. January 15, 2018, 11:44 am. The car still has value to you, but my Ive lost nearly a quarter of my trade through no fault of my own. Incredible comment. Im not so sure youre right about mining them though, especially if you mine with computer hardware that you already have. January 4, 2018, 4:25 pm. 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. If it works out, its a windfall. January 14, 2018, 1:05 pm, https://en.wikipedia.org/wiki/Foreign_exchange_market. The problems it solves for the billions of people in the second and third world shouldnt be so casually dismissed though. > . I had no idea the market capitalization of Bitcoin and the other crypto-currencies are so high. Again, how is Bitcoin replacing that? Ive yet to find anyone who has. However, cryptocurrency is what incentivizes the network to secure a blockchain, so theyre two sides of the same coin. Then my father used the same toilet paper for his cars and his house? Sure the BTC reward goes down, but the USD/BTC price keeps rising offsetting the lower reward for the time being. But thats just the software side (Blockchain). Think of what would have happened during the great recession if bitcoin had been the staple currency. How else should people behave? MMM has been writing quality PF content for years. Because I think they dont want to devalue the money too fast. Most of the 1000s of cryptos (and maybe even bitcoin) will fail, but the few that remain will change the world. 8. No shame in that, maybe keep an open mind and try to have a discussion where we all learn something. Appreciate the post MMM. Or? Then I came to my senses and realized that I only want to make money providing value to society. Blockchain technology may do that too. Mr. Money Mustache (Pete Adeney in real life) is a Colorado family man who retired 11 years ago at age 30 after an unexceptional 10-year engineering career, and now writes occasionally about. Its hard to quantify the lost energy and human potential, but the cost is real. The religious conviction that crypto speculators have as simple as you make easier. 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