Topic: Bitcoin Vs Compound Interest (Read 285 times)

I remember that there is a saying about compound interest that "money makes money; and the money that earns the money, makes money!" ¹ Like what most have mentioned, the mechanism of compound interest relies on the time you started investing. Obviously, the earlier you started investing using compound interest, the greater the returns maybe like 20-30 years from now or from the moment you retire.

Cryptocurrencies (Bitcoin to be specific) is a currency which is very volatile in its nature. When you observe its price history, one would see a upwards trend ever since its creation. Though there are some risks associated in investing into volatile investments, the returns are faster compared to your traditional bank investments.

So the bottomline is, choose your battles and timing. Invest on the right time and make sure that you would invest the value that you are willing to lose!

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¹ https://www.forbes.com/advisor/investing/compound-interest/#:~:text=Compound%20interest%20is%20when%20the,savings%20and%20investments%20over%20time.

bitcoin vs compound interest,, if we expect compound interest of course we need a very long time, because the bank will not only give it to us, we have to invest first, the more and longer we invest, maybe the new bank will give interest compounding for us, in contrast to bitcoin, if the price of bitcoin goes up, we can get a lot of profit, so in my opinion, bitcoin and compound interest, are much different. ..

I think BTC is much better than compound interest due to its high earning potential in a 5-10 years of holding but since we're talking about crypto which has a volatile market it would be a high risk high reward system. Anytime BTC price could crash anytime just like on what happened few months and it would take time to recover or maybe not. Its all about risk tolerance when it comes to our money so if you prefer to play it safe then it would be better to go for compound interest.

And people who bought Facebook, Google or Apple stock could have turned $10 into many thousands too. Or people who bought a lottery ticket with the right number could have turned a couple of dollars into millions. Hindsight is 20/20, you can't use it to justify future performance.


People on this forum talk every day how Bitcoin has saved or changed the world, yet Bitcoin has very little level of adoption with majority of society not knowing or not caring about it.

I agree. The US government and FED know how to main the economy for years. Inflation is inevitable because they tend to print more money for different purpose. Even though it might change the value of dollar from 1918 to 2018, but in fact, dollars still one of the strongest currency on the world and the average income of household is still very high

But yes, we can see bitcoin as a good investment opportunity which is able to eliminate the inflation (as well as the compound interest). That is why people invest their money in bitcoin a lot. Different firms and entrepreneurs have changed their perspective on bitcoin and cryptocurrency and some considers it as a potential investment for the future decades

OP,are you suggesting that the concept of compound interest is a scam?
I think that compound interest is definitely not a scam,but can you tell me which bank or investment fund offers high enough compound interest,that is above the inflation rates.
The combination of negative interest rates and high inflation makes compound interest non existent.
Investing in assets like Bitcoin can make your wealth grow,but the risk is higher.
The bad thing about the crypto industry is that most crypto traders/investors became really inpatient and greedy.
They want big profits NOW!This is a wrong approach.

Same both have their own identity,benefits and negativity. Everyone has their own prospective for me both has own identity and benefits as well as negativity and also they are different system too. 🙏🙏

For sure, compound interest would be nothing at the end all because of inflation which all of us have to face no matter what type of an economy a country is into...whether you are in a developed western countries or a very poor one in Africa the effects of inflation will always be there for all of us to suffer. And this is the reason why some financial experts are already advising their clients on this problem. And this is one reason why investing with cryptocurrency can be more attractive though one has to realize that here there are also risks involved - you can indeed go from zero to hero but with risks you can also go back to zero anytime.

Complete nonsense. Bitcoin is better to some because it offers much better returns; but that doesn't discount the fact that Bitcoin has far, far greater risks as opposed to insured savings with compounded interest. Those are comparably safer and has guarantees for the initial deposits, in certain cases. If you are willing to take the risks of your investments getting to zero, then by all means go ahead with Bitcoin. If you are not ready for having a volatile investment with no guarantees whatsoever of any long term gains, then people should probably stick with safer investments.

Sounds like a lot of nonsense to me.

I was unable to find the exact salary statistics of 1913 but I'll give you an example of 1918, not very far in terms of years.

The average household in America earned (according to usnews.com) $1,518 in 1918. According to dollartimes, 1518 USD of 1918 years is the equivalent of current $28,861. The average median household income in America at the moment is $62,843. The reason why USD loses value is that governments print money, i.e. takes a loan from us, a loan that we have to pay instead of them. So, inflation happens and the value of currency decreases compared to past but at the same time, the salaries are increasing too. It's like the increase in salary counteracts the inflation rate.

I also agreed with your opinion too. Both has its own negativity and positivity too. That's why both platform has users. Otherwise none platform has users. And we can't guranteed that bitcoin users do not involved in compound interest and compound interest users didn't involved in bitcoin. Actually they are in both site they know both can give profit but with their limitation. Like for compound interest 5%,10%,20%,50%, return is a biggest factor in 1-5 years. But in crypto 100% return also just like nothing. Because it can go anywhere. There is another reason in compound people are really invest in limited because there has an government hand so they Should give proof of his income statement. But in crypto no one here to see how much money you invest here.

So according too me i also agree with you sir @avikz

Your first statements don't make much sense. Compounding cannot be a "bad outcome" as it is simply a mathematical equation and it seems like you seriously misunderstand it because scams you've found have used it to lure in victims. Traditionally and over long time periods the stock market has been one of the best investments that you could ever make - provided you invest in index funds. The only way you would have lost money over a long time period is from investing into individual companies that turned bad or underachieved the market as a whole. Far too many people these days expect to get rich overnight, but the best way to get rich is building up a fortune over time as you will come to respect the slow and steady approach.

Compound interest is one good thing that everybody needs to know and invest in assets which yield good compound interest.
Finding an asset which can yield good compound interest is the tough job in this category.

Bitcoin on the other hand is directly an investment option (apart from the payment method obviously).
Bitcoin provides a direct return to investment. It grows in the long run and provide returns on the capital.

One is an investment while the other is an interest method and so both of them cannot be compared to each other.

I don't think that anyone still believes in compound interest, the reason why they used to be an option is because they were only a few options to chose from, the world is constantly evolving and in a fast rate and there are a lot of option to invest your money in, and a great example of that is bitcoin, where it has grown by a massive rate and still growing in just a matter of 10 years, so why would someone invest money to get a really small percentage of profit back in the same time frame.

he is right. bitcoin with compound interest has a different system.
bitcoin uses a market system with high risk and doubled profits while compound interest uses a double system with profits that can be predicted by investors every month with a profit sharing system (dividends)

The calculation of compounding interest has one component called "time". The longer the time, the better the return. If you eliminate time, the compounding itself becomes invalid.

However, for bitcoin, things are little different. Definitely, time is an important factor here as well. But the extreme volatility is very much unpredictable. That makes it riskier than traditional assets. So I don't think bitcoin and compounding of interest is even comparable. Both has their own unique benefits and negative points as well.

So instead of comparing, it's good to enjoy the benefits of both!

Yes and most people won't be here to enjoy it. Even if they stay here till their money generate hooping amount inflation will definitely deprive them from buying their dream houses and cars as old people. Compound interest is typically a live poor and die rich scheme. But those banks make massive profits from their investments.

Compound interest takes a lot of time for it to become really big and not everyone here will have the enough time to afford to wait for a compound interest to go up plus bitcoin's much better because it has proven for a decade, it has increased more than what many of us could expect and if we compare to compound interest, we will probably see it happen in about a hundred years or so before they can replicate that increase in prices.

Compound interest has a bad outcome on its investors, and many people do not understand it. Most people will be unable to enjoy their investments because of the long time required before getting paid. Bitcoin moved people from zero to hero within 10 years of existence, and people still think it's a scam project. Compound interest should be tagged scam in bitcoin's stead because of inflation. And financial firms seize from uploading such attributes about compound interest on top blogs because they want to blind investors forever.

Few Facts that will change your mind about Bitcoin being a scam project.

In 1973 the hourly rate pay of $4.03 per hour had the same purchase power as $23.68 in 2018, and the pay didn't rise as well.

In 1979 Median workers' weekly earnings rose from $232 to $879 in 2018, but it has the same purchase power as $232 paid in 1979.

In 2010 people bought 1 bitcoin at $1, and today it worths 38,000 dollars per one.

Compounding something for almost 100 years at 3.24% will result in over 2000% inflation. That is something that costs $9 in 1913 would cost $234 today!

What is the hope of an investor that invested in compound interest for 50 years? And inflation deducts their earnings to a quarter of their expectations. For instance, $100 in 1973 has the same purchase power as $612.95 today. It all looks shady, but people continue pumping their money because they feel it's safer for them, and they restrict themselves from the average living of a citizen because they want to live a rich life when they get old.

Nobody talks about the 2008 market crash that rendered a lot of people beyond brokenness. Bitcoin has saved the world from the hands of financial firms that use Compound interest to scam investors. People should see the light and utilize it.


Read: https://www.inflationdata.com/inflation/inflation/cumulative_inflation_by_decade.asp
https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/

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