What do you think about cyber currency/bitcoin? Are you investing? Why or why not?
Short answer: I think it’s a speculative bubble and I’m not into either gambling or effort. I’m not into gambling because I’m risk averse. I’m not into effort in terms of stock picking of any kind because I’d rather keep my time and match the market (plus on average people who try to pick individual stocks on average do worse than people who just match the market). So there’s a lot of things I could do that I don’t– I don’t try to time the market, I don’t try to pick the next hot thing, I don’t try to tax harvest, I don’t set up my portfolio in order to sell losers for tax purposes. I’m only just now starting to think about which kinds of investments should go in tax-advantaged vs. taxable funds. I don’t get any joy from gambling and I don’t think I’d get enough additional happiness from being a big winner (given the probability of winning) to justify the additional sadness from losing money which I would inevitably do because I tend to buy and hold until there’s nothing left to hold just because dealing with taxes is such a pain. Set and forget is ideal for me.
So… I think cyber currency is not a long-term investment, it’s more gambling than investing. I’m not a gambler, so I’m not “investing”. What other people do with their money is their business. Some people will win big and lots of people will lose their shirts. I don’t need to be in either category.
There’s a lot more stuff across the internets on bitcoin and why it’s not a great idea to invest. (And lots of stuff from people caught up in the hype.) Here’s Mr. Money Mustache on the topic. He has an excellent economic and cyber analysis of it– it really isn’t a good currency. He also has some good links on his post if you want to read more about the details.