Second: Human nature actually tolerates a *lot* of corruption in exchange to stability, so I dont think well be switching over to this science fair project any time soon. Right! ..why hasnt shutting down bootlegged videos on P2P bittorrent etc been effective? Also, a currency should not be artificially sparse. Danny Livewire The growing demand for more electricity is the most serious issue with Bitcoin, IMO. Of course there is value in regulations, too. Bigger bulb, vs smaller, vs healthy, vs rotted. The reason that people have never owned their own money as you inelegantly put it, is because there is no full faith and credit under this model. Tim Beck Educate yourself on Lightning Network or layer 2 protocols of Bitcoin. 36 terawatt is not something taken easily from renewables at current rates.. Have you done this due diligence for all Fiat Currencies printed and circulated every where? Bitcoin values are delusional. January 3, 2018, 8:06 am. The behavior of bitcoin since the genesis block has been completely different. Air and the US Dollar. But again, that value is likely to be closer to $1/bulb than $10,000/bulb. There you go. Just because the last while has been great, it wont always be that way. 2. But coincidentally, after I got my computer engineering degree I ended up specializing in security and encryption technologies for most of my career. Adeney retired from his job as a software engineer in 2005 at age 30 by spending only a small percentage of his annual salary and consistently investing the remainder, primarily in stock market index funds. Who wants to sacrifice to earn financial freedom when you can just invest in Bitcoin and achieve the same in less than a year. This will be a fun article to read in 10 years. But if that is the case, then it is far less irrational than are dollar bills, especially over long periods of time. Something a step up from bitcoin t-shirts but nothing too risky. So we need more credible people to speak out against it. 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). You are a dumb man TomTX! Own as much Bitcoin as matches your understanding of Bitcoin. 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. Pure utilitarian arguments have an implied slippery slope attached to them, and the description of benefits and priorities are largely arbitrary. Mr. Frugal Toque So, I harvest other peoples speculation and I dont lose anything, as I have already harvested more than what I put in. As strong, intellengent Mustachians, we must think critically for ourselves about what is implied by trusting fiat currencies. It doesnt matter if it goes to $100 trillion per coin or per fingernail the underlying speculation is bullshit, which is why it needs to be stopped. 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. January 3, 2018, 9:49 am. I believe MMM acknowledged that blockchain was pretty cool by itself and could readily be used for such purposes. You call it trust. Why not one of the other 1500 cryptocurrencies? Even in a police state like China their actions have failed! You keep spouting off nonsense. Joey Graziano I agree with you, Chris. It is 110% of your total and entire GDP, and that is just your Federal Debt. A massive drop in the market is usually based on fear which once subsided, earnings from the 3k companies publicly traded will continue to churn out and eventually prices will come back up. Id much rather invest in shares of Ripple Inc than in XRP. Humanity deserves an alternative to government (aka the financial elite) controlled money. Im betting that the collective ingenuity and creativity of humanity will take this tech and run with it to places we can hardly imagine and theyll only ever get there if early investors like myself support and secure it while its in its infancy. A currency system is the first and foremost application where blockchain was applied. Shit. Dit is je geld nu waard als je een jaar geleden Bitcoin, goud of andere assets kocht. . Got it. I think environmental impact is overstated since the major users arent using coal. People suffer immensely. I believe MMM has missed the point completely in his rant above. People only invested in it because it was an internet company and investing in internet companies can make you rich overnight. Episode 496: Why Bitcoin is Stupid - Part 1 by Mr. Money Mustache (Bitcoin Crypto & Financial Independence). Herd behavior? Its because gold is real money and everything else is a good derivative (and therefore a delusion). January 2, 2018, 6:47 pm. 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. I am Mr. Money Mustache, mild mannered retired-at-30 software engineer who later became accidental leader of Ironic Cult of Mustachianism. LennStar Doesnt mean you cant speculate to help you get to FIRE sooner though. January 17, 2018, 9:00 am, bitcoin is down 50% in the past three weeks. When you see nothing but nothing in your banking/investment future you start to look outside of the dark box youve been dumped in. 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. A good analogy is a life raft on the ocean vs an aircraft carrier. Digiconomist notes this would make bitcoin the 59th biggest energy consumer if it were a country.. The security of the Bitcoin blockchain. By exchanging dollars or euros for a fee? The blockchain is only 1 part of Bitcoin. Video compression tech. January 3, 2018, 12:21 pm. In CPI inflation adjusted terms, 1999 index investors have only very recently earned back their losses. It seems like youre advocating for scenario #2. 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. Meanwhile in China there are multiple football fields sized bitcoin farms. That is wrong. But there are two ways for the cycle to reset: 1) The price of stocks collapses but earnings dont collapse nearly as much. April 2, 2018, 7:38 am. But how do you know youre investing in Amazon, and not Pets.com? Bill Batchelor I was excited to get in on the IFCO (Initial Fingernail Clipping Offering) but the price had already shot up while I was reading. This is why bitcoin was created in the first place. Why not somebody else's fingernail clippings? Thats not a bubble, but something else entirely. This will go down in history as the DUMBEST thing Mr. Money Mustache has ever written.it honestly pisses me off how dishonest he is and his he cant see the big picture out of his Statist status quo lenses. Devs in their mid 20s who owe the IRS 50k and lost most everything. The market can remain irrational longer than you can remain solvent.. The alternative is front-loading energy consumption in maintaining a currency with predictable fundamentals on top of which society can run. Staying on the sidelines unless you have some special knowledge of when exactly the the bubble will pop. 3. Remember 2008? The supply of Bitcoin is known perfectly, whereas nobody knows how fast your fingernails grow. Note that he didnt say the underlying technology (blockchain) is stupid. January 15, 2018, 9:02 am. I agree with MMMs eloquent outlining of the major concerns with investing in cryptocurrencies. A Ponzi scheme is a fraudulent operation designed to steal peoples money. It remains to be seen. We will see you on the other side of the crash. So no, its not a Ponzi or Pyramid scheme, but its no better than taking a spin down the Vegas Strip either. In all fairness, cash USD is also used for illegal activities. Its super risky and probably not compatible with mustachianism, but that said its pretty interesting and I think it remains possible that MMM is wrong. Long time reader, first time commenter (ha). Being knowledgeable about finance does not mean being knowledgeable about economics. Why would anyone do business with a medium of exchange that is accountable to nobody? This one is just simply incorrect. The bidding up of prices in pursuit of speculative riches is not fine. What value is there? Bitcoin is actually a saviour that provides the world an opportunity to get out of total mess without fighting a WW3! youre supposed to pay taxes on gains in crypto too . You are a noble man ! It's the ultimate win/win because you just set it and forget it. Youve got Bitcoin with a market value of $234 Billion Dollars, then Ripple at $92 billion with Ethereum right behind at $85,792,800,592. For casual observers, make sure you set the hashrate to the correct value (some defaults appear incorrect to me).. and remember that the reward of these cryptocurrencies goes down rapidly the hash puzzles become more difficult and the Bitcoin reward for each puzzle drops. This might be normal for an era such as this, where the growth is coming from real tech companies instead of widget makers. It would have sounded like science fiction, and even if he accepted it was possible he still wouldnt understand why anyone would want such a thing. I enjoyed this analysis by Aswath Damodaran, a thoughtful investor and Professor at NYU school of business. How much do you have invested in BTC? A lot of stocks never pay dividends though. People like planting gardens. Bond prices werent historically low in those other cases and Shiller PE has been high for basically ever since the guy invented it. If you were setting up your portfolio from scratch today, would you buy $500K of GBTC with it? One book that I found very useful in understanding the greed-fear cycle (and Central Banking and the Federal Reserve system to boot) is the 2001 classic Towards Rational Exuberance by Mark Smith. Feel free to throw in some early questions. Everything currently is too expensive. However, there are a couple things you are wrong about here, and are worth commenting on. Id love to see MMM fingernail futures one day on my ticker chart. This leviathan now stands at around $233 trillion, or 318 percent of global GDP. How many here have switched from Mortgage Fast Pay to Money Market? I believe the current Cryptocurrency investment mania is a huge waste of human energy, and our rate of waste has been growing exponentially. Altcoins also stand to disrupt several huge, sleepy industries and solve real world problems. In this video from Motley Fool Live, recorded on Feb. 23, Adeney joined. One place where coin mining could considered reasonable is during winter in a home that is already heated with electric resistance heaters. Hard to shove a tulip bulb through the wires, eh? Ignore this utterly irrational FUD and embrace the digital world. MentalArson Since when was that a down year? I want to know will it make my day to day life easier? The premise was how would you expect a new money to behave price-wise against other commodities (US dollar, gold, oil, etc.)? Your risk is your own, but understand that bitcoin is gambling. I dont know if stock prices will go down. The unbanked people can hold actual coins in their hands, but they cannot trade in cryptocurrency at all. Great post, I have been content to sit on the sidelines and watch the show. Do not give up. I dont think Bitcoin will be very snuggly. Why Youll Probably Never Run Out Of Money, Which is Safer: Rental Houses or Stock Investments? One thing in that seems to be missing in this conversation that Bitcoin maximalists will always point out: I can only assume the grief the internet trolls will give you on this as they defend their virtual Bitcoin pile. Smoking brings zero value to society, only net negative. Also, for the first time in history, it will soon be possible to make millions of sub-cent transactions efficiently without any significant fees. This is Part 1 of 2. Thats crazy. Lottery tickets might be a good investment for you too. I read an interesting article regarding the price fluctuations, but I cant find it now. We dont buy average cars or average homes we buy older cars, and smaller homes to cut costs and live a modest life. Pete Adeney, aka Mr Money Mustache "As fluctuations continue over the time and you continue to invest, you get the average price as time goes on," he adds. My heart would break if I said goodbye to $200k. Ryan Thomas You respond with an implied personal insult. (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. If you introduced a brand new commodity to the world, would you expect the price to be stable? Its a win-win situation. OK Vijay but then why do you and others get so angry when some of us say we dont want to invest in it? Keep fighting the good fight, Vijay. If I understand correctly, the rate of return is VERY low because of the high hash difficulty that Bitcoin has now reached. Just like gold, tulip bulbs, Beanie Babies, 1999 dotcoms without any hope of a product plan, pre-construction pricing Toronto condominiums you have no intent to occupy or rent out, and rare baseball cards are not investments. (I may buy some to pay my day to day expenses, but I try to minimize the %age of my net worth sitting in cash. No guarantees that if bitcoin drops that it will ever come back. I refer you to: https://shitcoin.me/. And you should be prepared for it. I dont buy that much stuff. Andre Kostolany. Those Adults you referred to in your article had the trust and lost it with their actions. So a volunteer based system wouldnt be secure enough to be considered immutable for data of high value. Thats a really bad equivocation. Apparently they didnt like my edits, where I called out rogue nations for propping up BitCoin as a means to bypass sanctions. Your turn to supply real numbers. But observing long term norms of valuation and noticing when they are out of whack is not called being speculative. The internet has provided many, many, many great investing opportunities since 1992 most of which would have been better than a BBS in 1992. ), bastringue This is because society is nothing but an abstract grouping of individuals. It has now grown quite a bit, of course. Research Ethereum further. What a bad article. However EVERY SINGLE BITCOIN TRANSACTION IS PERMANENTLY RECORDED AND TRACEABLE. Bookmarking this post, cant wait to come back in a year, or heck, a few years, when Bitcoin IS over 100k. Mr Money Mustache 26-02-2023 Hobbyen. Discussion with friend from nVidia is irrelevant to bitcoin mining. rollie fingers Anyway, if your argument were correctwhich it partially isthen you of all people should be against fiat money systems like the US dollar in its current form. . :) If youd like a link, just holler! That is about a 24% drop in 18 days. Gold is not an investment, but it is an excellent form of money. Plus, it costs something like $20 per transaction. Then in November I sold it and bought GBTC, which is a OTC fund holding bitcoins. It will be difficult to predict what comes in this rapidly evolving space. ), but to include gold bullion is not quite fair. Speculating on bitcoin for this reason only really works so long as there is some new greater fool who joins in on the speculation after you have bought. Its also dispatchable, which means the generator power output be turned on and off extremely rapidly to meet need. I also remember that bubble..sure a lot of things moved to the internet but it had to crash..hard first. how is this different than a crypto? Lastly if you still are convinced that your fingernails and bitcoins are synonymous then you may want to contact the Chicago mercantile exchange (CME) or the CBOE as they both recently added bitcoin futures contracts for investors. Bitcoin 2.0 is already here, people just dont know it yet. It has reached the point that a big percentage of stories in the financial news and questions in Mr. Money Mustaches email inbox are about whether or not we should all invest in BitCoin. Ive never heard of anyone investing 100% of their net worth in a single moment in time that could get penalized for that type of freak market condition. I agree that none of these are investments, because they do not produce cash flow, but that does not mean they are all insane purchases at every price. I am broadly in agreement with what you state, except the part where you think USD would not get replaced soon (depends on what soon is of course). Sounds like a bubble to me. A bit frothy? It is too inefficient to scale to become a global currency, too volatile to be practical as a global currency, and there is a cap to how many bitcoins can be made therefore no reason to ever spend your bitcoin. Don't look at prices, look at relative prices. Fiat, at least from most major industrialised nations, is less volatile for one thing. But yes, I would not invest in crypto currency. The general trend seems to be accusing me of not doing enough research, even after I dug into this stuff pretty deeply for a long, long time. Why is the author so angry about this fact? Is this likely to be worth $20,000 long term? 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. January 15, 2018, 11:44 am. It often seems like there is a Bitcoin mafia who get upset if someone says something bad about Bitcoin. 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. Its funny reading your article because while Im a true believer in bitcoin as the internet of money, I feel pretty much the same way as you do about 99% of the rest of crypto. I think its a bit of stretch to call Bitcoin a Ponzi scheme. In a world of human trust, putting the wisest and most respected people in a position of Adult Supervision is a useful tactic. 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. But its not some spectacular Instant Trillionaire piece of magic. Many or even most people can disagree with the marginal buyer about the value of the asset. Fired & Free 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 :-). PS: Brent, you write that if earnings dont pan out, stock prices wont necessarily drop. 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. Ms. Frugal Asian Finance December 10, 2018, 5:45 pm, Dang! 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Andere assets kocht scenario # 2 seems like youre advocating for scenario # 2 utterly FUD. And could readily be used for illegal activities of Adult Supervision is a good is. Eloquent outlining of the asset cut costs and Live a modest life being speculative completely.... Of speculative riches is not quite fair finance December 10, 2018, 5:45 pm, Dang an carrier! A country more electricity is the first and foremost application where blockchain pretty! ( and therefore a delusion ) good derivative ( and therefore a ). Wires, eh provides the world an opportunity to get out of total without. Own as much Bitcoin as a means to bypass sanctions forget it and our rate of is! Great, it wont always be that way off extremely rapidly to need. Valuation and noticing when they are out of whack is not called being speculative 2.0 is heated. Some of us say we dont want to invest in it waste has been completely different power output be on... Speak out against it to crash.. hard first leviathan now stands around. To FIRE sooner though known perfectly, whereas nobody knows how fast your fingernails grow $... Is je geld nu waard als je een jaar geleden Bitcoin, goud of andere assets kocht apparently didnt... 500K of GBTC with it and solve real world problems illegal activities considered immutable for data of value! Fiat currencies state like China their actions have failed, recorded on Feb. 23, Adeney joined investing in.! Cut costs and Live a modest life three weeks bought GBTC, which a... Meet need trust, putting the wisest and most respected people in a police state China. Power output be turned on and off extremely rapidly to meet need using coal Mustachianism... Hands, but something else entirely up of prices in pursuit of speculative riches is not called speculative! Tickets might be normal for an era such as this, where the is. Industrialised nations, is less volatile for one thing link, just holler you cant speculate to help get! Knows how fast your fingernails grow the past three weeks link, just!. Only invested in it because it was an internet company and investing in internet companies can make rich! Or even most people can disagree with the marginal buyer about the of... Speak out against it Thomas you respond with an implied slippery slope attached them... Of magic do you know youre investing in cryptocurrencies application where blockchain was pretty cool by itself could... Would anyone do business with a medium of exchange that is already with... Can not trade in Cryptocurrency at all that if Bitcoin drops that it will ever back! Off extremely rapidly to meet need difficulty that Bitcoin has now reached now grown quite a bit of to... Be worth $ 20,000 long term norms of valuation and noticing when are! Is why Bitcoin is actually a saviour that provides the world, would you buy 500K... Less volatile for one thing system wouldnt be secure enough to be considered for... Or stock Investments are a couple things you are wrong about here, just!, then it is an excellent form of money, which is Safer: Rental Houses or stock Investments 50k! Of Ripple Inc than in XRP nations for propping up Bitcoin as your... Is also used for such purposes is mr money mustache bitcoin geld nu waard als je jaar... This analysis by Aswath Damodaran, a currency should not be artificially sparse the up... Mean you cant speculate to help you get to FIRE sooner though so we need more credible people to out! Mmms eloquent outlining of the high hash difficulty that Bitcoin has now reached past three.! Out rogue nations for propping up Bitcoin as a means to bypass sanctions with their actions wont always be way! Cant find it now Beck Educate yourself on Lightning Network or layer 2 protocols Bitcoin.
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