Only the most weak and fearful people will allow themselves to be stolen from for the sake of mythical national security that comes from trillions of dollars of military spending. Why not somebody else's fingernail clippings? Just because the last while has been great, it wont always be that way. Fiat currency was implemented in 1933 in the USA. The $16,728 Social Security bonus most retirees completely overlook. No where have I read South Koreans advocating replacing their currency with a Crypto equivalent. Why not one of the other 1500 cryptocurrencies? 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. Its not going to consume ALL the worlds energy? That, is where were at. That is what people said 1999/2000 for the dotcom bubble. This means that the long-term value of Bitcoin comes down to its value as a commodity. Think about how many leaps needed to be made for someone in 1990 to believe such a thing was possible. Currency might be the smallest part of that, in the way that web and streaming video traffic dwarf simple email traffic. I enjoy and appreciate your blog and the core messages you send the world, and thanks for raising this fascinating subject. We dont need to prey on their consumerism also. One question though, why not speculate with a small percentage of your net worth ie < 5%. However, in 2004 when Facebook was being launched it was looked at as a funny little friend site. No wait, not kinda bonkers, totally effing insane and unlikely to happen in our lifetimes. Just one, just $2, and its (hopefully) only a sliver of your net worth. The Money Mustache Community . This is yet another extreme example. About half a trillion dollars worth of gnashing and rending. From arranging hits to buying drugs to political corruption. Shit. But it also has some ideology built in the assumption that giving national governments the ability to monitor flows of money in the financial system and use it as a form of law enforcement is wrong. Monetizing debt and inflating the monetary supply is eroding our purchasing power and wealth. If you're careful to invest in an altcoin that has a clear value proposition (ripple comes to mind) you can set it and check once a day at most. That said, Im still not so sure. BigTasty1212 Evidently you werent invested in Pets.com and other rising stars with no hope of ever getting profitable. Ten years later and the price is still nowhere near that prior high, with it currently trading around $60. OK, But What if Bitcoin Becomes the World Currency? Volunteerism could get you only so far, but the data could only ever be as safe as the amount of resources it takes to break the system. Justin, you are falling for the WhatAboutIsm tactic that makes false equivalence. A timeline in yearsmy probability calculator says 99% or better that youll lose money, possibly all of it, if you hang on for years. In other words, if you truly need it to buy stuff, and thus you need to buy coins from some other person in order to conduct important bits of world commerce that you cant do any other way. Besides, theres value in bitcoin, like with gold or a comic book, or any other item people assign a value to. Shorting bitcoin would just be speculation in the opposite direction. Right now, the only people driving up the price areother speculators. Investing means buying an asset that actually creates products and services and cashflow for an extended period of time. Now lets get back to your kick-ass money savvy engineering experiments :-), Oh, dont feel too bad. The poorest in Sub-Saharan Africa earns the same money that you sitting in Manhattan, NY do. 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. November 20, 2018, 12:00 pm, so other storage is NOT needed sorry, my phone likes to randomly delete words, Tor Kristen Haugen 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. Bitcoin reminds me of a story my daughter told me. Holy cow, its wasting that much energy Vijay? So in order to have immutability, we need decentralization. Bitcoin mania isnt different from the dot.com mania or any other mania going back to the tulip mania. Dit is je geld nu waard als je een jaar geleden Bitcoin, goud of andere assets kocht. Your examples exactly prove the point: social media is great, but the first ones to take off werent the winner remember SixDegrees, Friendster, MySpace? (Again, you also cant go to space without it, or use your computer, but we can set that aside for the moment. But in reality, both stocks AND bonds are in a bubble. that would be a PE ratio of 1. A prescient article, but unfortunately, those of us that have investigated Bitcoin and come to the same conclusions(no interest in speculation, possibly completely value-less) must continue to put up with the Bitcoin bulls, and as seen in this comment section, they are extremely bullish. Is it possible youre confusing the message of this article? So, please dont keep repeating this Blockchain is great but bitcoin is not bullshit! No difference there. Its very informative and answers many questions you raise, 2. You are probably right that it has some more room to grow, but speculating on the perfect exit point is no more an investment strategy than a trip to Vegas is. Its also dispatchable, which means the generator power output be turned on and off extremely rapidly to meet need. January 3, 2018, 8:02 am. They could also plateau until earnings catchup with prices.. Im a younger kid so I definitely only heard of Betamax. January 3, 2018, 12:22 pm. 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. Humans are conditioned for shortcuts in all aspects of life. Furthermore, I would like to emphasize that for Bitcoin (used here to refer to generic cyrptocurrencies) to become useful in an everyday sense, I would never need to change out of Bitcoin and into another currency, such as USD. Satoshi, the founder, sits on 10% but he has never spent a single cent. Do we really want a place where youre either an Amazonian or Walmartian? The real backing of the dollar is the force the U.S. government will use if its debts are called in. 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/. All of the wealth and jobs being created already by Crypto has changed and benefitted the lives of millions. January 11, 2018, 4:23 am. It is the main currency by which you can obtain other cryptocurrencies. It is called being informed about reality.. Very good article! Ideally something not too specific to bitcoin, like I dunno, power equipment? Even if you are the only one in the room willing to do it. I dont buy that much stuff. Dr-In-Debt I agree Cyptocurrencies will be powerful in the future, but I dont think that will be in bitcoin. Bitcoin (aka CancerPills) has become an investment bubble, with the complementary forces of Human herd behavior, greed, fear of missing out, and a lack of understanding of past financial bubbles amplifying it. Stefan Brand Its trust is the full force of the weapons and arsenal behind it. Its speculation, pure and simple. MMM i normally love your articles but you knew this one would be polarizing Im sure. It takes an open, transparent society that trusts its elected officials to do RIGHT. That is why I also invest in government bonds. Tulips. https://t.co/wfi8XTq77s" Full anonymity and government evasion will not be one of its features. Yet, the banking system has been around for hundreds of years and I dont see it disappearing into the sunset anytime soon. Also appreciate the utility of sending value to anyone anywhere with an internet connection without asking a middleman for permission doing financial surveillance on you. If you want to move away from current currencies then you would probably have better luck starting a Craigslist for bartering website where you cant list prices. It is, in other words, a valid store of value with properties that support it as a choice. Lottery tickets might be a good investment for you too. Im patiently watching on the sideline to see how this is going to pan out. Things arent as crazy as 2000, but this is the 2nd highest peak of all time. Its clear from reading the comments that most people dont understand how this works. Lady Dividend January 2, 2018, 6:01 pm. What a bargain! Now I can forward it to friends and family who are chattering about it while Iwell, while I call it stupid. The FIRE movement continues to ignore #Bitcoin as an uncorrelated, rapidly emerging global asset class #whyFIREsucks. January 3, 2018, 4:56 pm. 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. Our Banker friend goes on to explain that the first Cancer-Pill might initially see some great sales. That is wrong. Because right now, well over half of all BTC mining power is located within China, and Xi Jinping could fairly easily decide that all of those miners need to work for him. I know, when you received hundreds of emails eventually you just have to buckle and say, Okay, damn it I will write it up. (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. coinwarz.com keeps track of profitability, but it can rapidly swing with changes in coin price. I just hope my tax dollars arent used to bail these folks out. January 5, 2018, 11:59 am. Devs in their mid 20s who owe the IRS 50k and lost most everything. On the popular Coinbase it will cost you about 4% just to exchange USD for BTC. I first thought about shorting it at $1000, and again at $10,000, so obviously I have no particular insight into timing. You will be amazed at the rate at which internet connection is going up in the poorest of countries. 3 years and 1 week later. (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. As has the MMM investing sub-furum. LennStar Theres illegal activity in all its shapes and forms (ie. Well, imagine you are in 1963 and you hear the speech I have a dream from Martin Luther King on abolishing slavery and you ask the question Why do you think this will happen?. So when I invest in bitcoin, Im not betting that itll replace dollars anytime soon. Maybe some other crypto-currency can overcome those issues and some have, but still a long way to go. Use it or lose it. I do believe hyperbitcoinization will happen in a decade or two. Ive been watching this with fascination as its been a while since we have seen a hype and crash investment (because we only know which way this is going to go, right)??? They always do. What a bad article. The problem with speculation is that the few that get in early certainly do make hordes of money at the expense of hordes of people that get in when speculative mania is at its peakinevitably to crash at some point. This results in a silent crash, and a loss in purchasing power for stock holderseven if the nominal price of stocks remains the same. Good comments Jon. Cryptocurrencies are the key to humanitys survival. And to your last point Lightning network will be cheaper? Id like to apologize on behalf of all humanity that you were compelled to spend some of your life energy on that. 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