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. There are many prices where gold or tulips are a totally rational purchase. Because of this, newspapers start reporting on prices daily, triggering so many tales of instant riches that you notice even your barber and your massage therapist are offering tips on how to invest in this new asset class. ;). Youre confusing outcome with process. I have no issue with the block chain. Bitcoin has very little usage. Your examples exactly prove the point: social media is great, but the first ones to take off werent the winner remember SixDegrees, Friendster, MySpace? His rhetoric about trusting the wise elites of the Federal Reserve also irks me. I also invested in a bitcoin two years ago, and paid off all my debt with it. Today, Jan 26, at 11:30 AM, its trading around $31,850. also look at russian, venezuala and Argentina for more proof of bitcoin. Buying real estate, gold, stocks, even ETFs and Bitcoins, all of these have risk. This is really useful for me to hone my thinking about the topic. That shit is gonna go way way up to 50k! Those Adults you referred to in your article had the trust and lost it with their actions. Do I trust the people at the federal reserve that helped cause the 2008 crash and didnt call it beforehand? But really, I'm not a finance guy - someone who devotes most of his time to optimizing money. For more casual sampling, have a look at this complete list of all posts since the beginning of time or download the mobile app. That is what people said 1999/2000 for the dotcom bubble. Consensus over its value. January 3, 2018, 12:22 pm. January 3, 2018, 12:14 pm. Do pay attention, please. They could also plateau until earnings catchup with prices. Yes, you can hedge in other things, but gold is fungible, dividable, small enough to hide, and has been valuable for centuries. Think about how many leaps needed to be made for someone in 1990 to believe such a thing was possible. People like planting gardens. What a bargain! And its back to 12.5K in two days. Ive been thinking of doing just that.. And then I put it off for a few weeks, and the price jumps up exponentially. I think that the point being missed in all of this is NOT that people want to evade taxes, but that they are being screwed backwards & forwards by the banks (& the tax evaders-in-chief that run them). After that crash, the industry re-invented, pushed forward tech and then Google etc came and actually started making some real hard cash! 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. Not a repeatable strategy though, Im sure. Mr. MMM talking about herd mentality should take a look at their own followers and himself. Check out RaiBlocks and other DAG-based coins. Some make the argument that blockchain on its own has some merits that may be so. While cryptos are new, they also dont meet the needs of traditional cash flow analysis but for a new asset class but just because its new doesnt mean its a bad idea. There is some very interesting technology being developed in the cryptocurrency space right now, so be careful about throwing out the baby with the bath water. It can be laundered. I think that gold is nothing special its a shiny rock. You are a fine example of that specimen horse. A decentralised system where no human has the power to manipulate money supply is the best thing that any society can expect, to get its finances and economy in order. Whether you should get out is a difficult question. There valuation of pretty much everything but Bitcoin and Ethereum is unjustifiable. Vijay how can it be a useful currency without a relatively stable value? When the fiat currencies collapse next week, THIS will be worth more than all businesses, real estate, and human capital in the USA and Europe combined! Youll note that without prejudice and emotion, he describes the actualuses of the technology, without getting intohow we should all place uninformed bets on its future value. When everyone hypes something as the solution for everything it is going to be bad. Exchanges get hacked or hacked (where the operators secretly run off with the coins) all the time. Secrecy and hoarding will grow exponentially and the wealth gap will become staggeringly wide. to convince them myself. 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. Sure speculate, but this is not going to be the future as it stands now. I really enjoyed the MMM article but I strongly disagreed with the part about gold. Quick, get me that money on PayPal before you miss out on any more of this incredible performance!, Figure 2: Random people on Twitter doing some deep, useful Investment Analysis on Bitcoin. The potential upside outweighs the risk of the initial cost. And of course, the purpose of this whole aside is that I want to establish credibility with you, so you will give this article some consideration. This is to be expected for a revolutionary new technology. These are preposterous numbers. As a result, changes in perceived value result in big price swings. Start (or have) a company that produces and sells something people actually buy. The internet. I dont feel like making a well-constructed arguments because Im tired and this may make me look like a fool but frankly, I dont care. Do you have any stats to share? dont understand why you say it will cost more? Check your funds. If you think its a great investment, go ahead and buy some / a lot we are not stopping you. Even in a police state like China their actions have failed! It makes you want to laugh and cry. I wouldnt! 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). destroy? Or maybe you dont understand how exchanges work. A lot less then the advertisements made for taking those things away from you. Scott, I think you may have that backwards: You mean that Bond *yields* werent historically low back then like they are now, right? Also, not all crypto currencies use PoW to mine / verify transactions. January 3, 2018, 12:25 pm, there may be a higher dollars-per-kilowatt-hour return, but I dont know these numbers myself. Nobody needs to worry about whether terms will be met. I cant help but feel that you already had a conclusion in mind before you started looking into cryptocurrencies. You are just parroting what every novice tells about Money. Take a look at the German Mark after WW1. But if it goes down, I wont put anymore money into it. This is so weak. If you are disgusted with the mining costs of Bitcoin you should be but the fact remains new inventions like RaiBlocks has made cryptocurrency frictionless and without mining or fees with transactions at over 7,000 per second. Favorite quote: Bitcoins growth is not based on its technology alone (which, while powerful, is open-source and therefore easily replicable) but rather on the strength of virality, encouraged by the vested interests who held early and invested in marketing it; with no genuine business underlying it, it acquires its (very substantial) memetic potency only from the evangelism of those whohodland preach., David Webbs great explanation: Bitcoin: the Worlds First Decentralized Ponzi Scheme, Preston Byrne again (brilliant guy! Jeremy Collins A digital advertising ecosystem to fund it all. Money only has value if it is stable and trusted. Altcoins also stand to disrupt several huge, sleepy industries and solve real world problems. Yep, really fluid and efficient system that takes 3 days and $20 to record a single transaction, I remember about 20 years ago the starry-eyed optimists predicting the end of brick and mortar banks within a decade or two. Is it possible youre confusing the message of this article? Absolutely. The problem with Bitcoin, (really all of the crypto currencies) is their value is not tied to anything of value. Im a younger kid so I definitely only heard of Betamax. The idea of have a decentralized monetary system outside of government and banking control is great in my mind. Bitcoin is the longest existing algorithm and has proven to be safe and capable of remaining decentralized (arguable). February 19, 2018, 7:36 am. Or stay in touch with them because they might become millionaires? 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. Either way how about not alienate people based off their investments and act like an actual human being instead of a sociopath? They cant use these gift cards. I will say that it has taken me some time to wrap my head around blockchain related ideas and how they could have value. 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. So, Bitcoin is supposed to replace all forms of physical currency in theory because people dont trust banks. 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. They are set at the margin, by the marginal buyer. Tulips. https://t.co/wfi8XTq77s" Even if you are the only one in the room willing to do it. That is why I also invest in government bonds. Hard to shove a tulip bulb through the wires, eh? One thing that most people seem to miss about why gold was favoured as a form of money (scarcity and shininess) is the fact that it literally lasts. And whenever the price bubble pops, you also have a $2700 paperweight. As for spending your Bitcoin, I digress. Hows that Nvidia stock doing now that GPU sales have been skyrocketing this last year giving them two record years in 2016 and 2017? It doesnt mean they are in bubbles at any price. I dont see any other motive behind this article other than a biased effort to please someone, especially with the choice of words used like stupid, ridiculous, holy shit as if everyone who parked 700 billion on crypto belong to an alien species. In this video from Motley Fool Live, recorded on Feb. 23, Adeney joined. Im not trying to convince anyone that bitcoin is the savior of the world but to put total trust in ones government, one that has a history of corruption is ignorant. 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). For me, its just like watching a show that I dont know the ending of yet. The sooner we debunk the myth and come to our senses, the richer our world will be. Bitcoin could also be the TCP/IP and will probably be the world standard in 10 years! Why you ask? "@origamicyber So true! Most of the 1000s of cryptos (and maybe even bitcoin) will fail, but the few that remain will change the world. (And very badly compared to other cryptocurrencies.). Bitcoins are all the same, they are not numbered, they dont rot and dont have a shelf life. Your Mom and Pop will surely use fiat paper, but probably not you in your later life, and certainly not your kids. Thats something worth giggling. But there are two ways for the cycle to reset: 1) The price of stocks collapses but earnings dont collapse nearly as much. Or sell half of GBTC. The Money Mustache Community . > However EVERY SINGLE BITCOIN TRANSACTION IS PERMANENTLY RECORDED AND TRACEABLE. Because if youre going to be an evangelist for anything, it needs to be purely based on the underlying merits, not what you hope it will do for your personal fortune. 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. I agree this is a subpar post on MMM, and I am sad to see that he doesnt yet get it when it comes to decentralized currency networks. Devs in their mid 20s who owe the IRS 50k and lost most everything. This article seems ranty/irrational. This way, whichever direction GBTC goes, you wont be in a regretful situation. Bill Batchelor And even if that was true, there are still many forms of private sales going on everyday where people dont want a traceable form of payment / exchange. rollie fingers How many do you need? Its well written and pretty obviously by a real software and math person. 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. However when every Joe on the street becomes an expert in an assetthen its suspect and you dont need to be clairvoyant to know that this will not end well. Weve told you what we think of it. http://whattomine.com/ They will have to learn the hard way. And verify. Please dont take the Proof of Work Blockchain like Bitcoins as the Blockchain. The blockchain is only 1 part of Bitcoin. 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. However EVERY SINGLE BITCOIN TRANSACTION IS PERMANENTLY RECORDED AND TRACEABLE. Its mind-boggling how much electricity is being wasted. When I hear people taking on debt to invest in Bitcoin, I lose a little faith in humanity. One of my coworkers at MMM-HQ works for nVidia, and part of his job is hunting down mining thieves who comandeer virtual servers (cloud computing) to mine coins on their behalf. Youve made a great profit, and you can play with that $28k. My gosh, where do you these people come from? So now that youve got an truly immutable public data store, what do you do with it? (Its also very hard to make jewelry out of. So If Jihan wakes up on the wrong side of the bed and decides to dump all his coins then it will open up hell hole for every one else. When we talk about Bitcoin, or Ethereum or any other digital coin, for that matter, neither ponzi nor pyramid are perfectly accurate descriptions for how these systems actually work., The cryptocoins represent a new kind of scam, a Nakamoto Scheme: https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/. Hardware. MMMers have unplugged from debt, but putting all faith in the designers of The Matrix seems ironic. Most of us, especially in the US and Europe, are free and are allowed to accumulate wealth through education and hard work. Listen on: Apple Podcasts, Google Podcasts, Spotify, YouTube. January 2, 2018, 5:53 pm, Dear Mr. Mustache, I am so sorry you had to write this at all. Definitely not. Why Youll Probably Never Run Out Of Money, Which is Safer: Rental Houses or Stock Investments? There is no one to be happy but individuals. Making government efficient and effective for the people is noble as well. But this is not necessarily correct in every case. BigTasty1212 (Or computers or spaceships.) LennStar I could only shake my head. January 3, 2018, 12:58 pm. All this bullshit about backed by faith and credit of my country goes out of the window when currencies die someday. I think I found the mistake in your reasoning. Youre 100% right that fiat currency is only good when people trust itand that trust could be ZERO. 8. 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