MMM is an awesome resource! I had moderately mustachian financial habits already - I never carry revolving credit debt, aggressively pay down mortgage/long term debt, buy reliable cars and keep them for long periods, exercise environmental stewardship through reuse and purchasing used items, insource as many tasks as possible, etc. I've been powering through these blog / forum posts and it's really given me a push to make further strides as there is so much more to learn and do. Really grateful for all the info on here and this community!
I was excited to see a crypto discussion thread here on MMM forum, it's disappointing it's devolved so much. I have been researching cryptocurrencies and will do my best to provide some useful information.
Disclaimer: I hold BTC and a selection of alts, in an amount that I'm comfortable losing.My personal interpretation of Mustachianism is to work hard and live frugally such that we will be financially sound across as many possible future scenarios as possible.
By design this eliminates a host of get-rich-quick schemes as they will only yield financial security in a small handful of possible futures. This includes cryptocurrencies. If you aren't already maxing out 401ks and paying down high interest debt, save this for later.
So you're building your 'stash, paid down your high interest debt, and living frugally. So why bother with crypto?
Cryptocurrencies' main role in a modern portfolio is diversificationIn some potential futures crypto growth outstrips that of conventional investments and having a small piece adds to overall profitability of one's portfolio.
A reasoned analysis of blockchain tech impact in the modern world by harvard business review, turning the "disruptive technology" idea on its head:
https://hbr.org/2017/01/the-truth-about-blockchaintl;dr: Blockchain's utility is not to overthrow traditional institutions, it is to create new foundations for better versions of traditional institutions. This is a gradual process that will take years/decades.
The vast majority of future timelines contain a continued and successful traditional financial market, along with streamlined digital transactions that save users money and make currently difficult tasks much easier such as payments, digital identity verification, and proof of ownership. This is an entire new sector and having it represented in one's portfolio may offer advantages, though at increased risk.
It can be unpleasant to contemplate highly unlikely yet highly impactful future outcomes such as hyperinflation. All our eggs are in one giant basket - the traditional financial markets. Crypto may provide a hedge against the traditional markets in the event the worst should happen. Precious metals have a place in this space as well, even though they can be difficult to transact with. Being able to do business with anyone using only your cell phone is vastly more practical than carrying around chunks of metal.
Do your research before choosing a cryptocurrency. Things to look out for:
-what is the circulating supply? Total supply? Was the coin "pre-mined" (created out of thin air, usually founders take a huge cut)
-verify mechanistic and political levels of decentralization. How distributed is the mining / staking that supports it? does a private entity control the ledger? Is there any evidence that the ledger is not immutable?
Some practical measures:
-only use exchanges for the short term purpose of obtaining the desired currency. Immediately transfer tokens to a local software or hardware wallet on your computer.
-backup your wallet, preferably offline. there are many online tutorials for how to do this.
There is a wealth of information out there for security best practices when it comes to managing your own crypto assets. Do your homework. And don't use money you cannot afford to lose.