January 5, 2018, 11:59 am. What you are describing is called a silent crash. There you go. About the Comments Section:Normally, I try not to publish comments that are just emotional reactions or totally uninformed. Banks and elites will remain even with Bitcoin, and if it goes your way it will probably the miningfarms and people who collect the most. No govt is just going to let the ability to control their economy be taken away from them. Theres illegal activity in all its shapes and forms (ie. Dont know if youve seen JP Searss satire of Bitcoin but I think you might appreciate it. But boy, are you wrong on this one. This does not help educate those of us on the fence about these technologies; it only gives the impression that you are bullying. MissSaraBee No? Bro, we get ityou want to wipe your butt with germ-infested cash. One thing in that seems to be missing in this conversation that Bitcoin maximalists will always point out: Why the hell would you have an intermediary like that when buying bitcoins? January 2, 2018, 6:47 pm. Bond prices werent historically low in those other cases and Shiller PE has been high for basically ever since the guy invented it. However, some cryptocurrencies DO have intrinsic value, which is computational power. My Take: Cryptocurrencies have A LOT of problems currently. Cest la vie. For the first time in history, a machine can own money and make its own purchases. Calling this a waste of human energy is NUTS. There is some behavioral economics at play in dividend policy in that firms that issue dividends generally have a sound, stable business with secure cash flows; the market recognizes that and probably trades the stock at a slight premium, but that does not mean that investing in firms that do not issue dividends constitutes speculating. Market prices are not set by consensus. 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. January 19, 2018, 6:45 pm. Bitcoin is mined using ASICs, not nVidias graphics cards. I understand the concept of having an idea, building business around it with angel investors and later going public where you and I can invest but I dont understand investing in something like XRP. Don't look at prices, look at relative prices. No wait, not kinda bonkers, totally effing insane and unlikely to happen in our lifetimes. Thats a lot of electricity that can be used to power 3.3 million homes wasted. On the popular Coinbase it will cost you about 4% just to exchange USD for BTC. Publicly verifiable voting as well, when the chains are worth trillions. I say its value is nil. Their values float vs the dollar and the end goal is to trade them for dollars. If you read your history on this subject you would understand why I dont. Ill stick with the stock market thank you very much. Thank you! 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? Taxation does not give money purchasing power. 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. Your highly emotional responses arent helping your case. Im interested to see how this plays out. Simple answer is, they cannot have a secure private Blockchain. And nothing that can go on forever, does. What if anything gives a compelling reason that bitcoin or any one of these other currencies will end up in the group? Are you for real? January 2, 2018, 9:45 pm. My issue is with the currencies themselves. Bitcoin mania isnt different from the dot.com mania or any other mania going back to the tulip mania. Congratulations on your earnings. January 10, 2018, 11:01 am. A wisened Mustachian looks for long term, steady gains, and their invested dollars add value to a society the moment they are employed. 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 4, 2018, 9:20 am. This results in a silent crash, and a loss in purchasing power for stock holderseven if the nominal price of stocks remains the same. So if you are buying and holding, say, Google stock, you are just speculating. Pretty much. Which is fine, but this trust-less nature of Bitcoin is what the early adopters valued. Given that China has a lot of bitcoin mines and electricity is produced by coal in China mostly thats a lot of unnecessary CO2 that just got bumped in the atmosphere. People are likely to disagree on whether this is a good thing depending on their worldview. So no surprise thats the first one, especially considering you need it to make the system work at all. Satoshi, while extreme in his views, watched the housing market collapse due to the fraudulent behavior of the banks and the government that backs them. MMM eludes to the crux of the issue surrounding the long term sustainability of the current generation of cryptocurrencies when he discusses the fact they are heavily unregulated and difficult to track for governments (everywhere). So, youre saying that Bitcoin is equivalent to PSINet, one of the first ISPs. Ive been investing steadily over a 20 year period. Then I came to my senses and realized that I only want to make money providing value to society. This Vice article explains yet another ridiculous aspect of Cryptocurrency: running the transaction network (called Mining) involves a deliberate computer-intensive crypto challenge syetem called proof of work. Remember 2008? 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. Some more attractive or reliable bulbs might even reasonably cost more. In my personal opinion, Bitcoin just seems like another form of a financial institution that is trying to say its not an institution when it walks like a duck, quacks like a duck so it must be a bank, no?! Vijay, its okay. If the currency is highly valued, he would do well to keep hold of it! If cryptocurrencydoestake off, it will be in a government-backed form, like a new Fedcoin or G20coin. Full anonymity and government evasion will not be one of its features. Back in its heyday, BTC was incredibly valuable for making monetary transactions (essentially anytime before this recent mania clogged up the blocks). Warren Buffet says dont invest in what you dont understand, and I dont understand Bitcoin. Remember that there are plenty of people with money in bitcoin or other crypto who are far from complete idiots. January 2, 2018, 5:52 pm. You sound like I poop-obsessed wing nut. Like a piece of a profitable business or a rentable piece of real estate. 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. I reply, if its gotten that bad, I dont want to live in that world anyway. Mr. Money Mustache Youre confusing outcome with process. It just means that some price levels are reasonable, and some are not. January 3, 2018, 9:23 am. Bitmains S9 efficiency is at ~0.1 J/GHs. Since when was that a down year? January 4, 2018, 10:38 am. MentalArson While I agree with your sentiment about Bitcoin I have been echoing similar warnings to friends and family since its mid-2017 breakout to $2k I think several other cryptos are definitely deserving of a portion, albeit small, of an investment portfolio. 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. 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. 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. Except for ripple coin. I like the way he analyzes investments. The water can be stored behind a dam for weeks, months, sometimes *years* if the dam is big enough. Its very informative and answers many questions you raise, 2. Research further. Enjoy your crash. Also withdrawing profits consistently so that if a crash comes you are ahead of the game and only playing with the markets money by withdrawing at minimum what you already invested. Thats cool. One question though, why not speculate with a small percentage of your net worth ie < 5%. So you are further wagering that Bitcoin will literally supplant the USD as the world medium of financial exchange, and frankly, that is kinda bonkers. People like planting gardens. Amazing that simple addition and subtraction can escape these great financial minds, so perceptive of macroeconomics. That is where we are with Bitcoins. In a sense one could swap bitcoin to USD and the article still stands. There are many reasonable prices for these goods that are non-speculative in nature. Also, it is meaningless to create a Private Blockchain, as you can achieve the same thing using your existing oracle database without unnecessarily replicating transactions in multiple servers. 100% agree. Now, lets see who is smiling? A currency that unstable cant be realistically used for transactions, even if you forget about its other limitations. January 2, 2018, 7:03 pm. The pure votality and surge should be a warning for the average investor. The internet became an amazing avenue for wealth. This MMM article seems almost contradictory to what has become an investment philosophy that reciprocates with many people. Is having 1-2% of my overall portfolio in cryptocurrency stupid? No, not to me. Maybe you know about Mr. Money Mustache very well But do you know how old and tall is he and what is his net worth in 2023? I think your point about time wasted is very accurate. A stock is a share of an actual company, bound by rules and regs (however imperfectly administered, at least they exist). The Cryptocurrency bubble is really a replay of the past: A good percentage of Humans are prone to mass delusions which lead to irrational behavior. Should I just get out now? To compare with fiat currency, we need to consider fiat currencys rippling effect on society. Do pay attention, please. Bitcoin has just 200 billion capitalization currently. They know him as Mr. Money Mustache -- a gentleman who retired at the ripe age of 30 without a million-dollar salary. BURST ( http://burst-coin.org ) as an example uses PoC (Proof of Capacity). You forget about its other limitations % of my overall portfolio in cryptocurrency?! Like a new Fedcoin or G20coin of people with money in bitcoin or any other mania going back the... For these goods that are non-speculative in nature: cryptocurrencies have a LOT of problems.! 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