Bitcoin -- what to tell your friends?


#1

Anyone here constantly get asked “what do you think about _______?” <—fill in crypto currency here.

Personally, I’m a hater. But also admittedly I don’t understand it as well as I should. How do you explain it to a friend / your parents? I find it hard not to just hype the benefits of blockchain…


#2

@millennialmoney just had a post on CNBC about crypto currencies. https://www.cnbc.com/2017/12/11/bitcoin-millionaire-grant-sabatier-dont-buy-bitcoin.html

Debt free geek also wrote a guide to crypto: https://debtfreegeek.org/2017/11/27/cryptocurrency-for-beginners/


#3


#4

I’m personally not a fan at this point of trying to get in. Just look at the chart. Anything that goes up that high in that short of time isn’t going to last. It never does.

The part that kills me is that I know many people think that it will fall but think that they’ll be able to get out before the rug gets pulled and will be able to protect their gains. But, looking at past bubbles, it doesn’t seem to ever work that way, so why chance it?


#5

I’m not one to place posts on forums (not sure if I can). But I made a post for them to read and just directed them to it. http://afinancialsavvydoc.com/2017/11/28/ive-made-much-bitcoin/ I am a fan and understand the blockchain tech more than most but I was looking into it a long time before the hype. But basically, Bitcoin won’t last it. I imagine it looking like a Christmas tree. Straight up then Straight down.


#6

It may not be the smartest financial move, but I don’t really have anything against people putting in a little bit of cash and going along for the ride.

I would NOT suggest making it part of your investment philosophy. But if you view it like a bet and throw a (very small) fraction of your income at it, go for it.

If someone is tight on cash and needs every bit to get by, stay away - the risk is too high. If you spend $100 in a weekend grabbing dinner or drinks with friends and can afford it, I don’t see any terrible reason against putting a few bucks in.


#7

Enough that I wrote a post on it. Folks seem to be guessing at what it might be worth and paying attention to price action. Some simple math helps with the possible end states:


#8

Personally, I view it much like gambling and speculative investing. My first investment was in a Ethereum mining machine because I enjoy computers and watching it make money and pay itself off is pretty cool.

I wrote a post about it here:

I have since put $3000 working on $5-10000 total into cryptocurrency just to see what happens.

Like @TheFinanciallySavvy says, it is a bet. I have made $1000 in 2 weeks, but that is only really true if I pull the money out now.


#9

well, bitcoin is trend…probably you wont buy it today but it is a really world wide system for paying online… I bought several btc in 2010)))sold them this year. I was shocked when found btc casino list, this crypto is used everywhere…


#10

Agreed. Cryptocurrency is speculation at it’s worst. People are always looking for the get rich quick scheme instead of making shrewd investments in low cost index funds. It is human nature to want to be the person who hit it big with “x”, but we fail to realize how often that happens.

If someone wants to use some fun money they would spend on going to a movie or out to eat just to play with cryptocurrency, fine. Anyone who has even a small, but substantial amount invested in this for retirement… Well, I’d have to question that.


#11

So I was asked about this recently and I said what my dad said to me when I wanted to invest in the currency, “It’s not regulated, so you could end up losing your money without any recourse.”

That was enough to stop me from looking into it further as a form of personal investment. However, there are people who got on the train early and we’re lucky about cashing out in time. Crypo currencies are not for the risk averse investor, that is clear, but with low risk, often comes low reward


#12

I think it’s a high risk, high reward type of situation. I’m not averse to someone putting a very small % of their portfolio into it if they know the risks going into it.

I wrote a post about it recently that essentially said the same thing but went into why I think bitcoin and other altcoins are an interesting speculative vehicle.

I’ve had some success with it but I consider it all play money at this point and wouldn’t be surprised if it all vanished as quickly as it came.


#13

A friend just posted a guest post that explains it nicely on my blog - chainofwealth.com/crypto


#14

Any competent advisor will tell you to expect to lose 100% of your investment in crypto. Even bitcoin enthusiasts will say this (even as they chant “to the moon! to the moon!”). Anyone else is just not being honest or doesn’t have a decent grasp of the concept.

I did explain it to my mom - the technology side, that is - over Thanksgiving. I tried to avoid using technical / industry terms such as “mining” - so I think she understood. She’s a little apathetic on the subject, so it’s hard to tell.


#15

There’s so much back and forth with bitcoin, I find myself telling people who ask that it’s too volatile to know where it’s head. Yes, the blockchain technology seems promising, but bitcoin itself? Who knows. I find myself seeing more and more tweets showing a supposed bitcoin “expert” saying one thing and then saying the complete opposite a month later. My personal feeling is that it’s a bubble and I’d love to find a way to short it somehow!


#16

“It reminds me of Heroin.” Read why here: https://www.wealthwelldone.com/bitcoin-reminds-me-of-heroin/


#17

recently I have found interesting article about bitcoin casinos it is really a new modern trend that will be popular for the centuries. Bitcoin is a new level of life


#18

When your parents ask questions, it somehow ends up either they don’t agree with your idea or relate it to their younger years.

Of course, that’s not a problem, except if you talk about new innovation that has a potential to change their perspective. Bitcoin is one of the hottest topics today, but not everyone can grasp its full potential, especially when you talk to the oldies like your parents.
First you need to them the basics. Which is that it’s money, just digital.
Second thing you need to do is that you need to relate it to a mountain. we’ll use the example of a mountain called Mount Bitcoin where there are miners. Those who mine Bitcoin do it through their computers with a lot of computational power. It’s like mining another scarce resource, gold, which also required specialized and expensive equipment. So, these Bitcoin miners are giving up something in the hopes of getting, maybe, one Bitcoin that can be broken up into many little pieces and distributed in exchange for the kind of money you’re familiar with. This will all be much easier if they had to learn php and machine learning. But we know that is not possible.
Third thing you need to talk about is where to spend Bitcoin.
Who wouldn’t go crazy on spending such amount? Since there’s no transaction charged for spending, say a few pennies, you could use it on websites that accept micro transactions or at