Jan 02, · Update, 15 months later: The imaginary price of Bitcoin is down over 70% since I wrote this, and a recent study reveals that about 95% of even the trading volume is timberlandschuheherren.de I’m feeling pretty good about this article in retrospect, but please read on to . Bitcoins To Beans! This extension changes any mention of "Bitcoins" to "Magic Beans." Have you ever wondered what business executives think about "Companies converting employee pay to Magic Beans"? Bean Cash recognizes the original Bitcoin white paper as its guiding principle and is built on core bitcoin technology with inputs from Peercoin for the foundation of its proof-of-stake (PoS) feature. There was no fund-raising or pre-mine; the blockchain (then named BitBean) was launched on 13 February After a SHA proof-of-work phase.
Bitcoin rocket beansExplained: Bitcoin has crossed $20, in value. Should you invest in it?
However, the Supreme Court ruled against this order in March this year. The first advocates of Bitcoin did not intend it to be used as an asset, but the mushrooming of exchanges turned it into one. Traditional investment experts are wary of Bitcoin as an investment. It has had a sharp rally since then see chart.
Market participants say the huge volatility in the price without any major fundamental reason should make retail investors cautious. Coronavirus Explained. Click here for more. Before investors can look at it as an asset, several things need to fall in place. If the cryptocurrency is regulated, it could result in the volatility reducing, and its acceptability and monetisation needs easing up.
However, given that Bitcoin was intended to come across as a global decentralised currency, any central authority regulating it would effectively defeat that purpose. How the pandemic failed to change us. India vs Australia: Teary-eyed Mohammed Siraj remembers late father during national anthem. US calls 'Google Tax' discriminatory, India defends equalisation levy.
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Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article. Found the story interesting? Like us on Facebook to see similar stories. Travis January 4, , pm. Basic Economics Vijay. Money only has value if it is stable and trusted. Why would anyone do business with a medium of exchange that is accountable to nobody?
Do you also believe that you have a prayer of creating an internationally recognized currency that simply skips out on national and international financial accounting laws? If so, congratulations. Your entire new medium of exchange is part of the black market. Vijay January 5, , am. You are just parroting what every novice tells about Money. Do you think Governments and Regulators have sat on the sidelines so far while Bitcoin is just exploding to a point that MMM had to sit and write a huge article?
The short answer is they can do nothing about it! For a long answer you need to understand the technicalities of it which I am not going to educate you on! Cijay January 5, , am. You have unwittingly tripped up your own argument here. In stating that humans have never had a chance to own their own money you have hit on the essential problem with bitcoin and any other monetary alternative.
Every currency has something behind it. In short this is nothing more than trust. Why do I trust the dollar? 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.
Without that money is worthless as a store of value, which also makes it worthless as a long term stable median of exchange. Full faith and what? I am laughing my ass out. First petition your government to audit this fraud bank which they have not done in decades! Zamboni January 5, , am.
Over 3. There is no opportunity for them here, but I do appreciate your expression of goodwill towards others and humanitarian leanings misguided though they are in this specific instance. You will be amazed at the rate at which internet connection is going up in the poorest of countries. Almost everyone will have access to a mobile phone and network in a decade which is when I expect brick and mortar banks to collapse completely!
BigTasty January 11, , am. Do these 2 billion unbanned people 1 have internet access and 2 access to the initial bitcoin to get in on this internet money? So for it to be a global currency taco bell is going to have to start paying kids in btc. Do you really see that happening?
KEV January 15, , pm. Vijay, Slaves to banks and few elites? This is so weak. Most of us, especially in the US and Europe, are free and are allowed to accumulate wealth through education and hard work. Be careful what you wish for. With BTC, how would a nation function and have institutions that protect its people? Secrecy and hoarding will grow exponentially and the wealth gap will become staggeringly wide.
Who would help the poor, elderly and uneducated — those without BTC? For the most part, far from perfect, I am very thankful that it works. AT40man January 3, , pm. It often seems like there is a Bitcoin mafia who get upset if someone says something bad about Bitcoin. LennStar January 3, , pm.
I put my money where my mouth is! I am not a millionaire either or have any heavy investments in any of this and I am not certainly looking to grow my investments by commenting on a blog, of all places! Tulips anyone? You gotta have it. 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!
Bitcoin and altcoins consume a ridiculous amount of energy. Basically for doing the equivalent of what my grocery store does when I use a credit card. Think that would fly at the grocery store? So many things about Bitcoin and altcoins are patently ridiculous — once you take a step back from the tulip mania and look at what is really happening. I have seen several bubbles grow and then burst, and one thing you learn is that an actual bubble rises like crazy and then totally pops.
It stays below the prior high for decade at least, sometimes forever. Cameron January 17, , pm. And its back to Last week people were writing obituaries as they do every year in January! You can keep saying its a bubble for eternity.
Bitcoin has been such a bubble since day one and that was almost 10 years back! No bubble lasts that long and keeps growing exponentially. Kevin S Coleman January 3, , pm. Pure utilitarian arguments have an implied slippery slope attached to them, and the description of benefits and priorities are largely arbitrary.
Tawcan January 3, , pm. Digiconomist notes this would make bitcoin the 59th biggest energy consumer if it were a country.
Jacob January 3, , pm. Not likely, bitcoin mining farms are in China because of the cheaper energy costs. Bitcoin is the viral buzzword that has the momentum. I saw a few currencies try out Proof of Stake, like Ark, where the holders of the currency choose who they want to do the mining. Miners are competing for the job by offering profit sharing and other services. Iota and RaiBlocks use something different than the blockchain to make each user a miner by requiring each transaction to verify other transactions which prevents transaction fees.
We will have to see if that new blockchain style will win out. The ones who own the farms you mean? Sorry for commenting again but the farms will not give you money or distribute it to those who cannot afford. Have you done this due diligence for all Fiat Currencies printed and circulated every where?
Let me know which one consumes more energy overall? Mark January 4, , am. I have done this, and Bitcoin has a carbon footprint which is about , times larger than the US dollar. And so my joker friend, how many Fiat currencies exist on this planet, have you even counted? Bitcoin is a universal currency and is not here to just replace your USD alone!
Also, what is the source of that study? TomTX, nothing was answered. Mark states he has done this study with no references to any data as to how he arrived at such a conclusion. Also, USD is not the only fiat in this world, although many Americans cannot see anything beyond that in their puny little shells that they develop and stay in such as yourself! Sun January 3, , pm. The big players in China use hydroelectric power.
The dams generate electricity whether you need it or not. So, they sell it at a discount instead of losing revenue. Use it or lose it. Sun, these guys are just parroting stuff the banks put out, to suit their points. Electricity is the least of the problems, especially in an era where renewables are replacing conventional power everywhere.
China is also a leader in renewables space. Sure, China is a renewables leader — but it has limits. Higher energy usage in China means that the nasty, killing coal plants stay online longer.
Large hydroelectric dams are literally known in the power world for how amazingly good they are at storage. Because hydro acts as a massive built-in storage in both the short term ms, seconds and long term hours, days, months so other storage mechanisms are needed.
Tor Kristen Haugen January 16, , pm. Evan Drake January 23, , am. Why Mr. Bill January 3, , am. You WILL be wrong. Why do you think so? You made an unsupported claim. Vijay January 7, , pm. Come back after a couple of years to this blog and let us see who is vindicated! The timestamp on these comments is pretty helpful to see who was right! Myriam January 22, , am. Dee January 16, , am. I think in five years bitcoin will pretty much disappear.
Why does bitcoin have to be the winner? Scott January 16, , pm. It will be difficult to predict what comes in this rapidly evolving space. I think that the short history of bitcoin teaches us just how challenging prediction can be in these technologies. I can see scenarios where some of these platforms develop staying power and become increasingly valuable for the actual work that they are needed to accomplish. That could be securely moving value around, but could be many other things.
Even a significant percentage would be really stupid. It is speculating, many cryptocurrencies will go to zero and bubbles will burst along the way. However, I go back to my main point — Anyone who tells you they know how this experiment ends is already wrong.
Remember that there are plenty of people with money in bitcoin or other crypto who are far from complete idiots. Woodser February 19, , am. The need for a cryptocurrency is very real. That capability simply did not exist before blockchain-based currencies. Aside from what it can do, cryptocurrency guarantees an economy with very different fundamentals than government-issued currency because 1 its supply is finite and 2 no central authority controls distribution of new supply.
People are likely to disagree on whether this is a good thing depending on their worldview. Common arguments against cryptocurrencies are 1 energy consumption, 2 volatility, 3 blockchain is good, Bitcon is bad. I argue that fiat currency is inefficient because its supply is always increasing. As the money supply increases, purchasing power is concentrated with the money creators at the expense of others holding the currency. Why should it not be? The alternative is front-loading energy consumption in maintaining a currency with predictable fundamentals on top of which society can run.
As a result, changes in perceived value result in big price swings. Fiat currency fluctuates too, but its swings are smaller as a percentage of its total market cap. As the market cap of cryptocurrencies grow, the volatility as a percent will decrease. A good analogy is a life raft on the ocean vs an aircraft carrier. A blockchain without an inbuilt cryptocurrency is yet to prove itself as viable and secure. For those saying specific instances of cryptocurrency do not have long-term potential Bitcoin, Ethereum, Litecoin, Monero, etc , the network effect is a force to be reckoned with.
Jfig May 25, , am. Great post. Serge October 3, , am. As of now, BTC has none of those characteristics. Besides, how do you get BTC in the first place?
By exchanging dollars or euros for a fee? Jillian January 9, , pm. Bitcoin reminds me of a story my daughter told me. She works as a school monitor and the kids have an area of the forest next to the school to play in. In that forest there are old bricks.
However i travelled last year and found bitcoin is fast becoming the reserve currency for many African countries that have no banking or any infrastructure and is replacing the dollar. The US has most to lose if dollars are exchanged for bitcoin as the US will not be able to print the cash for almost no cost and then get countries to use it for payment my advice is be very worried about dollar value over next 10 years but it was genius and made America rich!
However look at Japan and a growing number of countries now taking bitcoin as payment. A large proportion of other coins are long term holds. Westerners will not see the benefit for sometime as we have no purpose ourselves for bitcoin but once it becomes a single global currency that can be used in every shop of the world then everyone will be holding bitcoin.
Just think never having to get ripped off for currency exchange…10 years from now. Look up ethereum and Eos and read deeply on how fundamental this decentralised future beholds. Glad to see some sense being written to the red necks who seem to inhabit this blog! Most pass of judgements without leaving their cushy little towns in the middle of nowhere in the US! The world is changing which many westerners cannot see. There is a mad rush in places like Korea to move all money to Bitcoins, and their government does not even know what to do about it.
They said they are going to ban it, but there was such public outcry the government just backed off and now says they are still discussing the matter! Nope January 23, , am.
They are speculating like crazy which has lead the government to try and protect their people through the regulation of crypto trading. Dave January 23, , pm. That is the right way to think about these things. As platforms. Maybe the currencies will be useful to, but the really useful ones will be the ones designed for some purpose. Daisy February 15, , am. Many African countries have central banks.
Yes there is. Also, bitcoin lacks value in Kenya. Those who are in it are using it for speculative purposes, not as a currency. 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. I thought it was pretty genius when back home.
Peter Mevoin January 15, , pm. I agree with most of this article rather a rant, eh? Gold bullion has several thousand years of history. It is accumulated by countries, banks, and careful funancial entities. It is subject to crazes and manias. It is, above all else, pure wealth, other substances, and activities may be valued in gold bullion.
Thank you. Chris January 2, , pm. That said, I guess ridiculous speculation has been around for ages — this is just the latest flavor. Before stating something, do your research of what is a Ponzi and what is a Pyramid Scheme and whether Bitcoin fits that or not? A man is not a financial plan January 3, , am.
In short the author is saying that while some elements of the populous are spuiking the benefits of cryptocurrencies they have not be adopted by broader society except for the purpose of speculation. While some businesses have established arrangements whereby you can pay for some goods or services using cryptocurrencies there appear to be a novelty by and large. 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.
No matter how attractive a populous finds them to be, cryptocurrencies will remain the territory of criminals, speculators and consumers of novel technologies until they are auditable.
Speculation is essential to set a market price for anything. Why would the author call this act stupid? How else should people behave? Mark April 25, , pm. The value of bitcoin is very far removed from any sensible fundamental valuation, and the thing driving up the price seems to be a common sense that it will be worth more in the future.
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. Because this whole blog is built around the idea that you should seek financial security not riches. Hence, he advocates value investing not speculation. He is skeptical of anything that has a tinge of a get rich quick scheme. As should everyone. Cubert January 3, , pm. Dave January 4, , pm. Very interesting.
Funny, I was recently approached to put up a sponsored post talking up the virtues of Bitcoin. I agree with Pete. Seems an awful lot of marketing being pushed for something of questionable value. Cubert January 4, , am. Leon January 5, , am. Margin of Saving January 5, , pm. Andrew Kravitz January 3, , pm. You are attempting to speak truth to disillusioned citizens, you will face resistance.
Do not give up. You are a noble man! Frugal Asian Finance January 3, , am. But yes, I would not invest in crypto currency. Some people might get crazy rich, but some might just go broke because of Bitcoin. Anonymous May 10, , am. The shovel sellers are the real winners here. They have been making a killing.
Rachel January 3, , pm. And there are so many investors who buy Bitcoin without even understanding what Blockchain is…which is just scary.
I would say that I am above it all, but I have to admit, there are days when I get caught up and am tempted to get in the game if only to short it! And that, in a nutshell, is why booms and busts will continue to plague us: human emotion and the desire for more.
MissSaraBee January 3, , pm. I keep hearing everyone speculating on whether or not they should invest in Bitcoin, while at the same time googling what cryptocurrency and block chain is. It makes you want to laugh and cry. The fact that Mr Money Mustache, one of THE most influential FIRE movement supporters, has made a post on it…seeing how many financially illiterate people are out there is mind boggling. Jack January 4, , am. I agree with you, Chris. I try to lead people to conclude what I have.
Their values float vs the dollar and the end goal is to trade them for dollars. FirstPrincipleThinking January 14, , pm. Roy January 15, , am. Michael January 15, , am. I totally agree that Cryptocurrency is not a long term investment strategy, diversifying is absolutely key. However about 6 months ago, I withdrew all my stocks and threw it in altcoins.
I also invested in a bitcoin two years ago, and paid off all my debt with it. Stop Ironing Shirts January 2, , pm. Appreciate the post MMM. Neil January 2, , pm. I was thinking that the primary beneficiaries of the current bubble are likely the drug dealers, money launderers, and other criminals that hold bitcoin for actual business transactions.
Mike January 3, , am. This is exactly what I was thinking. John January 3, , am. In all fairness, cash USD is also used for illegal activities. From arranging hits to buying drugs to political corruption. Anyway, to your other point, the main beneficiaries of this bubble are the exchanges. The fees are incredible. You will also have to pay a fee to transfer from the exchange to your wallet.
You mixed that up. Luca January 3, , pm. Google, Amazon and Facebook came out of it. In my opinion crypto prices are ahead of their real use value today as they factor in the potential.
They may settle to much less, or get close to zero, or they may grow more, no one can really predict this. The issue with the. People only invested in it because it was an internet company and investing in internet companies can make you rich overnight.
Just the same with crypto-currencies today. People will release new ones all the time and people invest in them, not because they will ever be useful but because they expect the price to skyrocket. Bitcoin has very little usage. 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.
Bitcoin has very little potential for the long term. Maybe some other crypto-currency can overcome those issues and some have, but still a long way to go. Sue January 5, , am. I have these lovely tulip bulbs for sale, please PM me.
They are very valuable and the price is sure to rocket! Travis, your are right. Very good article! Vijay January 2, , pm. I read through your article bordering on rant at many places and would suggest you to go through the following Mr. Money Mustache. Videos of Andreas Antonopoulos on Bitcoins in Youtube.
Money Mustache January 2, , pm. He appeared on the Kevin Rose podcast as well. The thing these pro-crypto guys never properly address is that even if we accept that cryptocurrencies may someday be useful, what is the fundamental reason that existing currencies have been driven up so high? You need some sort of fundamentals, and in bitcoin there are none. Justin C January 2, , pm.
Brent Weaver January 2, , pm. And important thing to note here is that underneath almost all stocks are actual engines of growth with hundreds or thousands of humans working hard, churning out profits, earnings, and dividends. Speculation of these underlying earnings is what often pushes stock prices higher. They could also plateau until earnings catchup with prices. 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.
They always do. No guarantees that if bitcoin drops that it will ever come back. The stock market over the long run will ALWAYS grow as long as the population and technology and our output as humans continues to grow.
Kevin January 3, , am. I advise you look at the year PE ratio. Justin C January 3, , pm. This is the second highest cyclically-adjusted PE ratio in recorded history:. Scott Nicholson January 4, , am. Amazon has a stated strategy of no profit—how does one price that? Justin C January 19, , pm. But in reality, both stocks AND bonds are in a bubble.
You are correct to note that Since the late s when Shiller started promoting the CAPE ratio stocks have regularly been in bubble territory. But it is a valuation technique that goes back practically as long as there have been stock markets. We probably have another few years of stocks going down in terms of gold before they bottom out and a new stock bull market in real terms resumes once again. Justin C January 4, , pm.
It is when stock prices stay the same in nominal terms but everything else rises in price around them, effectively masking the very real stock market crash through inflation. This is exactly what happened in the s: The nominal price of stocks remained roughly the same while their effective purchasing power was cut more than in half.
Again, only in nominal terms. Juan January 5, , am. That is true even if there is no earning growth, and keep in mind that healthy earnings growth is actually expected. Market timing is a fools errand anyway. I believe this is currently the second longest expansion in US history. And nothing that can go on forever, does. One way or another, at some point, the cycle will end, and the cycle will start again.
But there are two ways for the cycle to reset:. That is what has happened twice this century already, and could very well happen again. Either one will get your CAPE ratio back into whack. Brent Weaver January 11, , am. This video epitomizes the Bitcoin market right now.
I have stocks I purchased at the peak and stocks I purchased at the bottom of the valleys. Tom January 4, , am. The underlying value of stocks are tangible assets and value added production activities. Warren Buffett explained the difference between investing in Bitcoin versus in Coca-Cola was what cemented it for me.
Smurph January 15, , pm. A lot of stocks never pay dividends though. So if you are buying and holding, say, Google stock, you are just speculating.
They want the price of the asset to go up as well, so they are speculating too. Berkshire Hathaway Class A has paid out a dividend only once in , and Warren Buffet has regretted even that. Does that mean investing in Berkshire Hathaway is speculating? A stock is not a ticker symbol; it is a stake in an underlying business.
Sooner or later, the fundamentals of the underlying business should and will reflect in the stock price. 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. The truly irrational.
A stock is a share of an actual company, bound by rules and regs however imperfectly administered, at least they exist. Lottery tickets might be a good investment for you too.
Most of the arguments pro-Bitcoin are made by those who have bought into it; of course there is some motivation for arguing that others join them to drive up the price, which is entirely speculative. Regular money has nothing behind it either. Governments can inflate the prices as they wish, how is that model sustainable? No, I am more inclined to trust economic models where the rules are clearly defined and cannot be changed, by anyone, ever.
When contracts cannot be broken nobody needs to oversee contracts. Nobody needs to worry about whether terms will be met. A lot of jobs today exists only to oversee things. Guess what, we can automate all of those jobs with cryptocurrencies. We can effectively automate trust. That is something very valuable just like stocks are.
Danny Livewire January 3, , pm. Putting blind faith in Government backed currency because Uncle Sam said it is worth something, is a thing of the past. Technology is always the game changer. And very badly compared to other cryptocurrencies. This is the same exact dynamic as tulip bulbs: Do tulip bulbs have a value?
What a bargain! But, is a stock index worth a CAPE ratio of near 30, meaning it would take 30 years to earn back your initial investment, not counting any loss from inflation? Heck no. Some of them have no earnings at all. MMM, Internet has pretty much destroyed every industry it has pitted against. Latest being the retail apocalypse. Bitcoin is a nascent technology and will evolve with time. 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.
Andreas January 3, , am. Sounds like a bubble to me. Everything is awesome, we cannot fail, it is great! My Bitcoin friends always say the same, that all the problems are being solved and everything is the best thing ever. Because reasons, technology and internet! Personally I fail to see the reference between Failhypecoins and retails challenges with shopping online. Still no fundamentals. Or streaming music, and streaming movies!
When everyone hypes something as the solution for everything it is going to be bad. Sure speculate, but this is not going to be the future as it stands now. If you want just one reason it is that governments will not allow it. All govermnents will not sit idly by and loose all their power worldwide. Bitcoins etc does not make it easier at all.
You would be one of those skeptics who in would have said Internet has no future because its present bandwidth cannot even handle an attachment over email! Today, 20 years down the road you are watching 4K videos on it!
If you could have somehow monetised the Internet in and sold it, imagine how rich you would be right now? That is where we are with Bitcoins. Right now a nascent currency like Bitcoin is not able to handle the transactions in a similar fashion due to limited bandwidth, and people like you point that out and say, look it cannot even handle the current level of transactions how is this thing going to replace Visa or MasterCard?
There is a very good chance that this article will be the butt of jokes 5 years down the road, when the toilet paper fiat currencies are all passe! Rick Gardner January 3, , am. Bitcoin has just billion capitalization currently. Allow it time to grow to say 10 trillion, and then let us debate on stability. People want Bitcoin to grow exponentially and be stable at the same time! How is that even possible? Jay Holden January 3, , am.
Ben January 3, , am. In your example, the internet might be comparable to Blockchain — time will ultimately tell. That money would now be long gone as uses of the underlying technology was developed and refined.
The internet has provided many, many, many great investing opportunities since — most of which would have been better than a BBS in Educate yourself on why Bitcoin and Blockchain cannot be split up. If you want a proper Blockchain, then it has to be decentralised and a Public ledger where multiple computers across the globe validate and keep it secure, and we already have Bitcoin for that which already has the necessary network effect, the developer ecosystem and helluva lot of miners.
Go educate yourself first. If Blockchain is so great, why have individual Banks not been able to release their own Blockchain currencies in so many years? Simple answer is, they cannot have a secure private Blockchain. 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. Becca January 3, , am. Same with internet search: remember AltaVista, Lycos, Dogpile?
How much are these companies worth today? Andrew January 3, , am. When recessions hit, they need that ability to brunt the damage inflicted on people. Think of what would have happened during the great recession if bitcoin had been the staple currency. Well, that is not what we are discussing are we? John January 3, , pm. I did Control F, and verified that MMM never used the word Ponzi or Pyramid, and in fact Vijay, you were the first person to bring up the Ponzi Scheme topic, and then you linked some article which I did not care to read.
Tim January 3, , am. Remember there was social media before Facebook. Facebook is probably the 4th or 5th legitimate social media platform. It remains to be seen. No major government will transact in a currency it cannot control. You can give up that wet dream right now.
Tim, do you think Bitcoin cares what the Government thinks or wants? It has been made ground up to be censorship resistant and has been thriving for past 8 years despite singular opposition from every quarter. Governments have no choice here. All they can do is to ban and stop the exchanges. Even in a police state like China their actions have failed!
I also remember that bubble.. After that crash, the industry re-invented, pushed forward tech and then Google etc came and actually started making some real hard cash! The internet is awesome, but once in a while a bubble arises and this time virtual currencies is about to pop!
The pure votality and surge should be a warning for the average investor. But again, this is not investment but speculation! What usually happens when this occurs? We end up in Utopia? Think about it and I know you realise what is happening.
Do not let your own brain trick you for easy solutions! Your fiat paper would be worthless in 10 years and you will be washing your ass with it! Now, when that happens, I am ready either way. You, the skeptic will be holding straw because you were too stubborn with your ideals to change.
I think the far greater chance is your comment will be the joke. Vijay January 6, , am. Time will tell. Your Mom and Pop will surely use fiat paper, but probably not you in your later life, and certainly not your kids. TomTX January 13, , pm. The internet became an amazing avenue for wealth.
Blockchain technology may do that too. Even some cryptocurrencies that currently exist. Uberartist January 3, , am. I totally agree with you on bitcoin. But consider some things that will live up the hype.. Anirudh January 3, , am. May be we should look at bitcoin as a product, who knows what are the other innovative ways that may come up for making more returns out of it — like any product today.
Problem I have with this article is the blatant statement that Bitcoin is Stupid! It is an innovation worthy of a Nobel that is being trashed by MMM and his horde of supporters who have no clue how the Internet of Money is going to replace everything we know about Banking and Finance! James January 3, , pm. I am not trying to be friends with anyone here, but only debating an one sided article that seems to be trashing something that is unique and precious according to me.
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.
BryanG January 3, , pm. Vijay, what MMM is saying is that cryptocurrencies like Bitcoin cannot presently operate as currencies. Thus, they are not useful, and produce nothing useful. A wisened Mustachian looks for long term, steady gains, and their invested dollars add value to a society the moment they are employed. With cryptocurrencies, you are literally betting that world governments, the G20, all major banks, The United Nations, financial institutions, exchanges, Elon Musk, Warren Buffett, and all existing fiat currencies will change as radically as retail shopping has in the past 25 years.
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. 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.
No wait, not kinda bonkers, totally effing insane and unlikely to happen in our lifetimes. Do you know the state of US debt recently? Yes, that is your ground reality today. What are the world currencies pegged to? What is the US Dollar pegged to? Pure Air and a bunch of IOUs that it will eventually default on. Fiat currencies my friend is working overtime for its own demise. Bitcoin is actually a saviour that provides the world an opportunity to get out of total mess without fighting a WW3!
Andreas January 22, , am. Alright then, do you have all your money invested in cryptocurrencies? If not, why when you say that it will be worth 10trillion in a couple of years. Ace January 15, , am. Are you saying wisened mustachians own no stock or ETF of any tobacco companies? Smoking brings zero value to society, only net negative. Check your funds. You keep spouting off nonsense. Could you please tell us what you are invested in and when you got in? Money Mustache has ever written.
Calling this a waste of human energy is NUTS. This is the greatest use of human energy and capital the world has ever seen. Saving billions from poverty, war, and the enslavement of banks or the lack of any banking is Altruistic. Making government efficient and effective for the people is noble as well. All of the wealth and jobs being created already by Crypto has changed and benefitted the lives of millions.
Mattheus January 3, , pm. Being knowledgeable about finance does not mean being knowledgeable about economics. Missing the forest for the trees kind of thing. Let them hold on to their fiat currency if they like to. I am beginning to get it Mattheus. This fiat economy itself is only 40 year old.
Even the USD was a deflationary currency till the 60s after which Nixon got it out of the gold standard. Closer to 85 years than Fiat currency was implemented in in the USA. Nixon just took away the last vestiges of the gold standard. Which happened 47 years ago, not Amazing that simple addition and subtraction can escape these great financial minds, so perceptive of macroeconomics.
Vijay January 14, , am. Pedro January 3, , pm. Bitcoin is not stupid per se. If people are creating an bubble out of it, people is stupid, not bitcoin. Bill January 3, , pm. He said Bitcoin is stupid and speculative.
Because it is. Enjoy your crash. Same wishes to you on your toilet paper fiat money my friend. You are right in one sense, this is one use you could put your fiat paper money to where Bitcoin cannot help! A boy named Sue January 3, , pm. Yes, you can buy index funds with fiat money and not with Bitcoin.
Any efficiency brought to commerce through blockchain technology are very likely to show up as increased dividends from index funds. El Penguin January 3, , pm. Frugal Toque January 4, , am. Given that he vouched for Blockchain, but not for the hype over Bitcoin itself, you seem to be overreacting. I doubt you really believe this is going to overthrow all of our current financial system.
I do believe hyperbitcoinization will happen in a decade or two. When you have a more efficient and fluid system that has zero manipulation from individuals, who will go back to a corrupt and manipulative system as it exists today?
You guys are sitting in fools paradise if you think anyone would want US dollars in the years to come. Frugal Toque January 5, , am. First: cryptocurrencies have not demonstrated lack of manipulation. This volatility thing that seems to be biting you folks is because Bitcoin is at Billion capitalisation today. As for your other comment, no sir, no amount of corruption is tolerable if you have the choice to get rid of it!
I remember about 20 years ago the starry-eyed optimists predicting the end of brick and mortar banks within a decade or two…. Educate yourself on Lightning Network or layer 2 protocols of Bitcoin. It is already in Beta testing and will be released this year. Some companies are already testing it in main net as well! Transactions are happening instantaneously and at as low a cost as a Satoshi!