Bitcoin Poor

[Pente]

A long time ago, there was this saying called "property poor". It referred to someone that had like a million dollars worth of property, but barely had enough cash flow to make their mortgage payments. They might even have a slight negative cash flow, but held on waiting for inflation and rising rents to turn things around. Eventually, many years later they were very well off.

Anyway, I know at least one person that has a double digit number of bitcoins, yet is homeless. Another is surviving off of food stamps and sub-minimum wage jobs. All are hanging on to their bitcoins for dear life. It is their ticket to economic salvation.

I would loosely term anyone as being "Bitcoin Poor" if they have over a dozen bitcoins, but the rest of their assets are less than $1000 and they are barely surviving.

Anyway, just wondering how common this phenomenon is in the Bitcoin community. A couple of us locals were talking about this subject recently.

[markjamrobin]

I have about 80% of my assets in Bitcoin, but I'm not homeless either I don't know how low I would have to go, before I would sell them though.

[pontiacg5]

That is just pure dumb in my opinion. I like bitcoin, but I am not planning my entire life on the viability of the matter.

I'd even say the guy accepting foodstamps with over $9,000 in bitcoins (more than double digits, price at $900 now) is a leech...

[herzmeister]

Anyway, I know at least one person that has a double digit number of bitcoins, yet is homeless. Another is surviving off of food stamps and sub-minimum wage jobs. All are hanging on to their bitcoins for dear life.

They could trade them back and forth on localbitcoins.com easily with a premium of 5-10% each trade.

[superduh]

makes sense. go a few years eating top ramen in order to eat lobster everyday later.

small price to pay for future happiness?

[markjamrobin]

makes sense. go a few years eating top ramen in order to eat lobster everyday later.

small price to pay for future happiness?

But if BTC disappears, you spend your whole life eating ramen, there is definitely risk putting all your money in one investemnt.

[superduh]

makes sense. go a few years eating top ramen in order to eat lobster everyday later.

small price to pay for future happiness?

But if BTC disappears, you spend your whole life eating ramen, there is definitely risk putting all your money in one investemnt.

correct, but it's a risk they are taking. what else would they do with the money that they would cash out now? maybe they believe that this is the best opportunity for them.

[markjamrobin]

makes sense. go a few years eating top ramen in order to eat lobster everyday later.

small price to pay for future happiness?

But if BTC disappears, you spend your whole life eating ramen, there is definitely risk putting all your money in one investemnt.

correct, but it's a risk they are taking. what else would they do with the money that they would cash out now? maybe they believe that this is the best opportunity for them.

Use it to, rent a place, try and find a job, get off food stamps, etc.

[Firedrake]

That is just pure dumb in my opinion. I like bitcoin, but I am not planning my entire life on the viability of the matter.

I'd even say the guy accepting foodstamps with over $9,000 in bitcoins (more than double digits, price at $900 now) is a leech...

I have to agree. 9 grand in assets is much more than I have. I am living paycheck to paycheck, without gov assistance. Though I am not fully aware of your friend/acquaintance's full situation.

[Hawker]

That is just pure dumb in my opinion. I like bitcoin, but I am not planning my entire life on the viability of the matter.

I'd even say the guy accepting foodstamps with over $9,000 in bitcoins (more than double digits, price at $900 now) is a leech...

Be fair.  $9000 is nothing and if Bitcoin carries on in 2014 as it has in 2013, that $9000 will be $270,000 which can take him out of poverty and off the welfare rolls forever.

[pontiacg5]

That is just pure dumb in my opinion. I like bitcoin, but I am not planning my entire life on the viability of the matter.

I'd even say the guy accepting foodstamps with over $9,000 in bitcoins (more than double digits, price at $900 now) is a leech...

Be fair.  $9000 is nothing and if Bitcoin carries on in 2014 as it has in 2013, that $9000 will be $270,000 which can take him out of poverty and off the welfare rolls forever.

9 grand is more than half of a minimum wage annual salary ($7.25, for 15k annually) and while I now see it as "nothing" it most certainly is not to people actually in need of financial assistance.

Regardless, someone could feed themselves without cashing out all of their BTC. Lets just say he sells one, $900 could feed someone for 4-6 months pretty easy. The remaining 9 coins are still worth $243,000 in your scenario.

I don't much think it's fair that this guy has the opportunity to potentially become a quarter-millionaire while on the government cheese. I could easily liquidate all that I own and go "bitcoin poor" foodstamps and all, probably be a billionaire next year (still assuming your crazy "bitcoin never stops exponentially growing" scenario) Is that fair?

[cr1776]

...off of food stamps ...

So, someone is sucking off the rest of us in order to invest in something that has good prospects for future growth.  Nice.   And I bet they'll never repay the rest of us for their parasitic behavior.  :-)

[markjamrobin]

...off of food stamps ...

So, someone is sucking off the rest of us in order to invest in something that has good prospects for future growth.  Nice.   And I bet they'll never repay the rest of us for their parasitic behavior.  :-)

Well, in all fairness, if you can get free money, you almost have to take it. We got a huge tax credit (http://www.irs.gov/uac/First-Time-Homebuyer-Credit-1) from the IRS. I think it is a terribly stupid program, and I don't agree with it. That being said, money is money.

[pontiacg5]

...off of food stamps ...

So, someone is sucking off the rest of us in order to invest in something that has good prospects for future growth.  Nice.   And I bet they'll never repay the rest of us for their parasitic behavior.  :-)

Well, in all fairness, if you can get free money, you almost have to take it. We got a huge tax credit (http://www.irs.gov/uac/First-Time-Homebuyer-Credit-1) from the IRS. I think it is a terribly stupid program, and I don't agree with it. That being said, money is money.

I'm sorry, but nobody gives you food stamps till you ask for them. A tax credit is a tax credit (taxes being fines for doing good) you somehow contributed to society, so you were rewarded with a slightly less fine. The level of your contribution for the type of reward might not be fair, but that's another matter.

Completely different, if you ask me. 

[Hawker]

...off of food stamps ...

So, someone is sucking off the rest of us in order to invest in something that has good prospects for future growth.  Nice.   And I bet they'll never repay the rest of us for their parasitic behavior.  :-)

You do know that food stamps operate as a subsidy for low wage employers?  Don't blame the person for being caught in a badly designed system.

[kgo]

That is just pure dumb in my opinion. I like bitcoin, but I am not planning my entire life on the viability of the matter.

I'd even say the guy accepting foodstamps with over $9,000 in bitcoins (more than double digits, price at $900 now) is a leech...

Be fair.  $9000 is nothing and if Bitcoin carries on in 2014 as it has in 2013, that $9000 will be $270,000 which can take him out of poverty and off the welfare rolls forever.

It's $7000 more than you can have to be eligible for foodstamps, so it's not just a moral issue.  It's fraud.

"Households may have $2,000 in countable resources, such as a bank account, or $3250 in countable resources if at least one person is age 60 or older, or is disabled."

http://www.fns.usda.gov/snap/eligibility

[superduh]

...off of food stamps ...

So, someone is sucking off the rest of us in order to invest in something that has good prospects for future growth.  Nice.   And I bet they'll never repay the rest of us for their parasitic behavior.  :-)

Well, in all fairness, if you can get free money, you almost have to take it. We got a huge tax credit (http://www.irs.gov/uac/First-Time-Homebuyer-Credit-1) from the IRS. I think it is a terribly stupid program, and I don't agree with it. That being said, money is money.

I'm sorry, but nobody gives you food stamps till you ask for them. A tax credit is a tax credit (taxes being fines for doing good) you somehow contributed to society, so you were rewarded with a slightly less fine. The level of your contribution for the type of reward might not be fair, but that's another matter.

Completely different, if you ask me. 

that's just all semantics

[pontiacg5]

...off of food stamps ...

So, someone is sucking off the rest of us in order to invest in something that has good prospects for future growth.  Nice.   And I bet they'll never repay the rest of us for their parasitic behavior.  :-)

Well, in all fairness, if you can get free money, you almost have to take it. We got a huge tax credit (http://www.irs.gov/uac/First-Time-Homebuyer-Credit-1) from the IRS. I think it is a terribly stupid program, and I don't agree with it. That being said, money is money.

I'm sorry, but nobody gives you food stamps till you ask for them. A tax credit is a tax credit (taxes being fines for doing good) you somehow contributed to society, so you were rewarded with a slightly less fine. The level of your contribution for the type of reward might not be fair, but that's another matter.

Completely different, if you ask me. 

that's just all semantics

Please elaborate...

[Cubic Earth]

I don't much think it's fair that this guy has the opportunity to potentially become a quarter-millionaire while on the government cheese. I could easily liquidate all that I own and go "bitcoin poor" foodstamps and all, probably be a billionaire next year (still assuming your crazy "bitcoin never stops exponentially growing" scenario) Is that fair?

Liquidating all you own and going 'bitcoin poor' would be pretty foolish if you were talking about many years worth of accumulated assets.  But a year or less worth of savings?  In that case the time it would take you to recover from a bitcoin catastrophe would be less than a year.  So that wouldn't be too bad.  So it's a risk.

Just a few thoughts on the 'fairness' of someone on government assistance becoming rich.  First, that's how many bankers and billionaires got to where they are.  I suppose that's not fair either, but would rather give some help to the little guy.  There is legal and not legal.  In many states you are allowed to posses lots of assets and still get food stamps.  It is just the income part that matters.  If the dude on food stamps is being honest, but clever with finances, I don't think there is any thing wrong with that.  Personally I would be very happy to see food stamp and welfare people all turn into investors, growing their wealth and providing a stable household for their children.  Obviously at some point they are going to transition off state assistance, but cutting them off to early could stunt their social-economic rise.  Most of us probably had a supportive parents, a good education, etc.  If your parents had cut you off and kicked you out of the house when you were 12, you probably wouldn't be where you are today.

I think its good we help people to rise out of poverty, not just keep them fed and in poverty.

It's $7000 more than you can have to be eligible for foodstamps, so it's not just a moral issue.  It's fraud.

"Households may have $2,000 in countable resources, such as a bank account, or $3250 in countable resources if at least one person is age 60 or older, or is disabled."

http://www.fns.usda.gov/snap/eligibility

As I mentioned, it some states go about it differently.  I agree, fraud is fraud.  But if it is legal where they live, then they are being clever.  If they continue to claim food stamps once they have $200k in bitcoins, I would feel differently about that.  They would still be being legal and clever, but by the time they had $200k or so, I would hope they would start to think about giving back to society.  I guess everyone has their own opinion of when that point comes, but if you think that boundary for financial stability is $9000, I think you don't understand basic costs of living.

[Hawker]

...off of food stamps ...

So, someone is sucking off the rest of us in order to invest in something that has good prospects for future growth.  Nice.   And I bet they'll never repay the rest of us for their parasitic behavior.  :-)

Well, in all fairness, if you can get free money, you almost have to take it. We got a huge tax credit (http://www.irs.gov/uac/First-Time-Homebuyer-Credit-1) from the IRS. I think it is a terribly stupid program, and I don't agree with it. That being said, money is money.

I'm sorry, but nobody gives you food stamps till you ask for them. A tax credit is a tax credit (taxes being fines for doing good) you somehow contributed to society, so you were rewarded with a slightly less fine. The level of your contribution for the type of reward might not be fair, but that's another matter.

Completely different, if you ask me. 

that's just all semantics

Please elaborate...

A subsidy is a subsidy.  Whether its done by a mortgage guarantee, a tax credit or a social security payment, its all taxpayer money being spent on specific people.  It costs the exact same amount and the different methods usually reflect ease of administration.