Scott Nicholson Mr. Money Mustache is. If I am able to speculate successfully and retire sooner, I would hope that the other Mustachians would cheer me on. What usually happens when this occurs? Interesting article, with some great points. Ive personally stayed away having learned these lessons in a past life. Assuming you can know the exact price of a commodity on a given day is speculative, yes. You could recreate your AAPL stocks again if you want and still keep the rest in GBTC? That is wrong. 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.. Im not saying Bitcoin is the saviour of USD imperialism. Cryptocurrencies are extremely risky. Then you are in at twice the actual price of Bitcoin. There is a high chance that Bitcoin doesnt remain #1 forever because there are so many cryptocurrencies, many of which with very different applications, including some that arent even based on blockchain technology. Also I would like to point out that in civil war days with different currencies things were a mess financially so now youre going to need some crypto forex to come up with exchange rates of all these different currencies really take off. About a 1/3 of it gets taken before the IRS even gets their grubs on it. Videos of Andreas Antonopoulos on Bitcoins in Youtube. This YouTube Video is one of the best shortcuts I found for explaining how Blockchain (and Bitcoin) works. He or she still determines the current market price. Because it is backed by an entity that will ensure its value is honored and, to at least a small degree, those that are responsible for it are also accountable to the citizens of the US. Hence, he advocates value investing not speculation. It is an honor to be doing this session! Why you ask? Also, just because something is open-source does not mean it cant be valuable. So instead we are going to own Bitcoins that are so volatile that you will go insane? Or when I have to go to the grocery store to buy milk and theres the sign that says NO POWER, CASH ONLY and my toddler is crying for milk, Im going to pay them in cash. Also, saying Blockchain Yes and Bitcoin No is tantamount to saying, Social Media is great but Facebook is not so great, or Internet Search is Great but Google is not Great!!! I dare you to look it up! Joey Graziano And this, MMM There are no financial instruments that will protect you from a world where we no longer trust each other. Besides, how do you get BTC in the first place? Michael This view is not quite right assuming that your usage of the word speculating has the connotation of gambling. Problem I have with this article is the blatant statement that Bitcoin is Stupid! I use purse.io to buy stuff from Amazon. Google, Amazon and Facebook came out of it. MMM could have just posted a video like this where a not-famous-youtuber is boasting about how he is going to start investing 3% of everything he makes into Bitcoin for his nest egg because he missed out when he first opened his Bitcoin wallet 4 or 5 years ago: https://www.youtube.com/watch?v=ubnMyPZS86E. Now, lets see who is smiling? Hes helped thousands of people improve their lives. This idea that you HAVE TO OWN ONE FULL BITCOIN is madness. BURST ( http://burst-coin.org ) as an example uses PoC (Proof of Capacity). People suffer immensely. Let me know when you find a buyer for your $70k fingernail clippings. Monetizing debt and inflating the monetary supply is eroding our purchasing power and wealth. And likewise you can scratch off the idea of any government backed cryptos, because those are by definition centralized. Also, not all crypto currencies use PoW to mine / verify transactions. Warren Buffett explained the difference between investing in Bitcoin versus in Coca-Cola was what cemented it for me. Well, shit. Id love to see MMM fingernail futures one day on my ticker chart. I think I found the mistake in your reasoning. MMM says: Cryptocurrencies are useful for anonymity and evading the government which is bad because we need the governemnt and we need to trust each other. I am laughing my ass out. By exchanging dollars or euros for a fee? January 3, 2018, 12:14 pm. Or physical goods if you want to use it to record land or vehicle deeds, etc. MMMers have unplugged from debt, but putting all faith in the designers of The Matrix seems ironic. Missing the forest for the trees kind of thing. Please please please get out of that fund and invest it all in a low fee index fund! Unfortunately for most people that think they are missing out on everything, they are being lead to Coinbase and only buying the cheapest tokens available, namely Litecoin because Ethereum and Bitcoin have gotten so expensive. Thank you Jane, I have been waiting for someone to point this out! Even if it were safe it seems to me to be a dead end as energy consumption for the expanding use becomes incredibly high. I was excited to get in on the IFCO (Initial Fingernail Clipping Offering) but the price had already shot up while I was reading. Thats fairly over the top. 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. When I hear people taking on debt to invest in Bitcoin, I lose a little faith in humanity. And just as a warning, I am always going to tell you that price speculation is a bad way to spend your life. Prices would rise, especially if the supply of these pills was limited (just as an artificial supply limit is built right into the Bitcoin algorithm.). BTC wont be the winner but with over 1300 coins the winner has likely been created. Its rising because people are buying it up, hoping someone else will buy it at an even higher price later. Its the last one! The only thing I would add as a further disagreement to MMMs article is that speculation is inherently a GOOD thing. If you want just one reason it is that governments will not allow it. Good to add this article to the (hopefully) growing list of rational explanations debunking the appeal of what my 76 year-old Grandma, a consummate investor, rightfully calls funny money. It pains me to hear friends, some of whom I have to believe are intelligent people, describing their vast spoils and commitment to cryptos. Without that money is worthless as a store of value, which also makes it worthless as a long term stable median of exchange. Digiconomist notes this would make bitcoin the 59th biggest energy consumer if it were a country.. Hopefully someone else will go through this in 2023 and fill us in on the value then. This is the best post on this entire comment thread. I enjoyed this analysis by Aswath Damodaran, a thoughtful investor and Professor at NYU school of business. 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. (namely, cultural values and living conditions which have been shown through study to increase our subjective wellbeing scores, or Science if you want a shorthand for it). Enjoy your crash. Anyway, to your other point, the main beneficiaries of this bubble are the exchanges. Mr. Money Mustache is the website and pseudonym of 48-year-old Canadian-born blogger Peter Adeney. Do you know the state of US debt recently? In a world of human trust, putting the wisest and most respected people in a position of Adult Supervision is a useful tactic. . January 2, 2018, 5:52 pm. Thanks, MMM! It often seems like there is a Bitcoin mafia who get upset if someone says something bad about Bitcoin. Justin, you are falling for the WhatAboutIsm tactic that makes false equivalence. :), https://twitter.com/elonmusk/status/941500121564332032, farmecologist Im only a mediocre computer scientist. I reply, if its gotten that bad, I dont want to live in that world anyway. Under certain tax-related assumptions dividend policy is irrelevant to the value of a firm says one of the Modigliani Miller theorems. If that money is a key component to your wealth and retirement plan, you may want to consider something with a little less volatility. Check out RaiBlocks and other DAG-based coins. The problems it solves for the billions of people in the second and third world shouldnt be so casually dismissed though. Lady Dividend I believe the current Cryptocurrency investment mania is a huge waste of human energy, and our rate of waste has been growing exponentially. Something a step up from bitcoin t-shirts but nothing too risky. I dont know, why gold and not platinum or palladium? If you feel comfortable developing your own metrics with which to gauge coins and want to invest in projects long term, you can. Fiat currency was implemented in 1933 in the USA. In Ancient Rome and today one ounce of gold bought a very nice dress suit. Its because gold is real money and everything else is a good derivative (and therefore a delusion). I am as much a Mustachian as you all are, except for this one article that I simply cannot digest frankly! but remember short positions have a possible infinite downside while buying the asset has a possible infinite up side, If you do this youre still speculating on a market that cant be understood right now. do not feed into this crap that there is no banking infrastructure. Sure, China is a renewables leader but it has limits. pre-construction Toronto condos will generate cashflow as soon as construction has been completed, If bitcoin is a bubble, should we short it? 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. Why does bitcoin have to be the winner? Why should humanity be slaves to Banks and a few elites who control money supply? as well as all legal forms of private sales (ie. Shit. Why? Millennial Boss Its totally different when you lose your money by yourself. With governments coming on board, digital cash will stop money laundering and all these bad things Bitcoin has been associated with. Appreciate the post MMM. This fiat economy itself is only 40 year old. Of course, there is some price, far lower, where Bitcoin could be rationally priced. But, these days you shouldnt use resistance heaters except for the lightest heating loads, because they are obsolete. The main reason is Kenya has a mobile money system which allows you to use phone credit to pay for stuff or even just your own money. This bubble is going to break, the environmental waste is awful, and CNBC legitimizing this as investing with ticket symbols must stop. Most MMM readers recognize that there is a serious flaw within the system which is why most of us just reject it. January 19, 2018, 6:45 pm. Some of them have no earnings at all. Bitcoin was the first block chain, and this guy Satoshi whoever he is, has invented something that is as big as what Einstein did in the 20th century with Atomic Physics. Large hydroelectric dams are literally known in the power world for how amazingly good they are at storage. https://www.youtube.com/watch?v=aeMv9uKpAZg, The Wealthy Accountant If it was instead patentable Id buy some stock in the holder. I was one of the first subscribers to this subreddit when it was invented. BigTasty1212 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). But sometimes they do. I have accepted lifes nudge and opened up several pages of your blog and am working through them right after this, The Vigilante Thats a tricky question. MissSaraBee A currency that unstable cant be realistically used for transactions, even if you forget about its other limitations. Why? Some of them may be insane purchases at some prices and very sane purchases at other prices. Or sell half of GBTC. Meanwhile, I studied investing starting at age 18, which allowed me to retire at 30 (16 years ago) Then I studied Bitcoin for months, digging to the bottom: there's nothing there. Now they trust the mathematics, and the lack of centralized human control. January 19, 2018, 6:57 pm. January 15, 2018, 11:44 am. Today, Jan 26, at 11:30 AM, its trading around $31,850. Its definitely useful for me to hear opposing views though and Im hungry for intelligent people to discuss it. Speculation of these underlying earnings is what often pushes stock prices higher. There is no intrinsic value in ALL FIAT CURRENCIES. 26 Replies 18313 Views March 27, 2020, 01:47:17 PM by talltexan: How do you press your kids to learn money habits? LennStar Plus $20 to run the transaction. 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. Bitcoin and altcoins consume a ridiculous amount of energy. You are a fine example of that specimen horse. As for your other comment, no sir, no amount of corruption is tolerable if you have the choice to get rid of it! You can have a blockchain that uses (even if you include all the network stuff it passes through) just a few KW and moves more data then Bitcoin. While it is true that stocks are probably expensive right now, one thing that doesnt get mentioned enough with Shiller P/E is the E represents the 10-year rolling average inflation-adjusted earnings. Remember there was social media before Facebook. Cmon people its not rocket science. Fiat currency fluctuates too, but its swings are smaller as a percentage of its total market cap. Remember 2008? 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. LennStar Im interested to see how this plays out. The premise was how would you expect a new money to behave price-wise against other commodities (US dollar, gold, oil, etc.)? You have unwittingly tripped up your own argument here. That is the right way to think about these things. We have never in history had such expanding currency supply backed by NOTHING. Your fiat paper would be worthless in 10 years and you will be washing your ass with it! I made 400% and pulled them out. 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). Only if you close your ears and go Na-na-na-na-na. One question though, why not speculate with a small percentage of your net worth ie < 5%. I could only shake my head. And society is comprised of them, and nothing else. offshore tax haves/ black marketsare companies moving to Ireland for tax sheltering & why does Apple have so much money overseas. I am of the opinion all of Fiat will get wiped out in a decade or two! Think about it and I know you realise what is happening. This means whoever is buying this paper is doing so despite the fact they are guaranteed to lose money on the investment. Much of this buying has been propelled by central banks which can print their own currency and buy debt indiscriminately. 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. Its speculation, pure and simple. Like my double comment? TO_Ont Most people understand nothing apart from my friend bought some BTC for $5k last month and now theyre worth $20k. Mustachianism the mental training that gets you to very early financial freedom requires you to evaluate inefficiencies in our culture and call bullshit upon them. We dont buy average cars or average homes we buy older cars, and smaller homes to cut costs and live a modest life. Not likely, bitcoin mining farms are in China because of the cheaper energy costs. When recessions hit, they need that ability to brunt the damage inflicted on people. You clearly have a contrarian opinion here. It stays below the prior high for decade at least, sometimes forever. > what is the fundamental reason that existing currencies have been driven up so high? Do you really believe that we should go all-in when it comes to trusting our institutional financial establishments? Im not saying to build a bunker or anything but just diversify your portfolio for different economic times. Why is the author so angry about this fact? Its other limitations buy debt indiscriminately why not speculate with a small percentage of your net worth

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