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Why Credit Card Points Are Better Than Bitcoin

Why Credit Card Points Are Better Than Bitcoin

Million Mile SecretsWhy Credit Card Points Are Better Than BitcoinMillion Mile Secrets Team

Bitcoin and other cryptocurrencies have generated lots of buzz in the news recently.  Team member Keith has a strong opinion on the topic, which he’ll share with y’all!

Keith:   When I think of a “currency,” I imagine having a bill or coin I can give to someone in exchange for a product or service.

That’s why I agree with the Bank of Israel, South Korean Financial Supervisory Service, and other financial regulators who say cryptocurrencies are NOT actual currencies.

Why Credit Card Points Are Better Than Bitcoin
I’d Rather Collect Miles & Points to Use for First Class Award Flights Than Gamble With Cryptocurrencies!

The lack of regulation and extreme price volatility in cryptocurrencies will keep me from investing in one anytime soon.  Instead, I’ll continue to focus my time and effort into earning and redeeming miles & points.  Because I don’t have to take a big risk and can still get a reward, like thousands of dollars worth of free travel!

I encourage everyone to do their own research and consult with financial professionals when considering investment opportunities.  That said, I’ll share my personal views on this hot topic!

Buying Cryptocurrencies Is Not the Same as Investing in Blockchain Technology

I love financial innovations that make life easier, like sending money to friends or family using Venmo.  While cryptocurrencies are certainly an innovation, I’ve yet to understand how one specific cryptocurrency is better than another, other than a flawed supply and demand argument.

Consider there are more than 1,400 different cryptocurrencies which have been developed in recent years.  Meanwhile, there are only 180 actual currencies around the world (like the dollar, euro, and pound) recognized by the United Nations, including some which have been around for 1,000+ years.

The headlines have not been favorable for cryptocurrencies so far in 2018.

Why Credit Card Points Are Better Than Bitcoin
Recent Headlines Like These Keep Me From Buying Bitcoin or Any Other Digital Currency

And the significant drop in the price of popular cryptocurrencies like Bitcoin and Ethereum hasn’t been a good sign, either.  At its peak in mid-December 2017, 1 Bitcoin was worth ~$19,500.  But the value dropped by nearly 50% in less than 1 month.

One of the major rules I learned when studying finance is don’t invest in something you don’t understand and aren’t familiar with.  For some folks, there’s confusion between buying cryptocurrencies and investing in the technology that makes it possible, which is known as blockchain.

While I’m not an expert on blockchain, I’ve read enough to learn there’s significant potential for this technology.  It can make financial transactions faster and cheaper, and eliminate fraud.  These are a few of the reasons why major financial and technology companies, including Google and Goldman Sachs, have invested in blockchain firms.

But as you’ll see in the below infographic, blockchain transactions do NOT require that you to use cryptocurrency.

Why Credit Card Points Are Better Than Bitcoin
Blockchain Technology Can Potentially Speed up Financial Transactions. But Speculating on Certain Cryptocurrencies Isn’t the Same as Investing in the Technology

So, other than pure speculation, why do prices of individual cryptocurrencies fluctuate so much?  I don’t have answer and that’s why I’m staying away from buying digital currencies!

The Return on Investment With Credit Card Miles & Points Can Be Huge!

As Million Mile Secrets team member Meghan recently shared, there’s a strong connection between personal finance and the miles & points hobby.

Of course, collecting miles & points is NOT a long-term investment strategy.  But earning and redeeming credit card rewards can save you money you’d otherwise spend on vacations.  And extra cash in your pocket can help your financial goals, like saving for retirement.

Booking travel with miles & points has allowed my wife and I take unforgettable trips we would have never considered if we were paying cash, like an around-the-world honeymoon!

Why Credit Card Points Are Better Than Bitcoin
We Saved Thousands of Dollars Traveling to Cape Town, South Africa, by Using Miles & Points!

My favorite part about the miles & points hobby is no travel goal is out of reach.  Just take a look at these posts with award travel success stores shared by Million Mile Secrets team members and readers:

Consider miles & points have their drawbacks too.  For example, hotel and frequent flyer programs can devalue their award currency with little or no notice.  And flexible points programs can drop transfer partners.  That’s why I never recommend hoarding the rewards you earn because a good deal today could be gone tomorrow!

So instead of investing money in cryptocurrencies you can’t control, you can invest time in planning your next adventure.  Then, start collecting the right miles & points to get you to your destination.

Be sure to check out our “How to Get to Guides” for tips on saving money on your next journey!

Bottom Line

Instead of investing money in risky cryptocurrencies like Bitcoin, Million Mile Secrets team member Keith says he’d rather invest time collecting miles & points with travel rewards credit cards!

Lots of investing experts (including Warren Buffett) don’t have high expectations for cryptocurrencies.  And the prices of certain digital currencies recently dropped by ~50%!

Of course, earning rewards isn’t a long-term investment strategy.  But dedicating time into learning how to use miles is worth more than throwing money at Bitcoin because with miles you have a guaranteed return of experiencing fantastic trips.

You can get a huge return on investment by collecting the right miles & points.  This makes no travel goal out of reach, so you can travel around-the-world for a fraction of what it would cost if you paid cash.

What are your thoughts on cryptocurrencies like Bitcoin?

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Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)

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Educating the masses

There are many, many errors in this article but I’ll try to educate instead of attack.

“But as you’ll see in the below infographic, blockchain transactions do NOT require that you to use cryptocurrency.”

<—— WRONG. They do need crytpocurrencies.

A block chain is a public ledger. The transactions on that ledger are secure and accurate because they are verified by a network of nodes (miners).

Each miner dedicates computing power (e.g. resources and electricity) to verifying these transactions.

They are rewarded with crypto currencies like Bitcoin every time they successfully verify a transaction (and thus ensure transactions are not double spent).

Here’s where you, the mainstream media, and this article miss the point:

Withoutcrypto currencies block chain cannot work.

Why? No incentives to mine.

Why would you be a miner (e.g. spend money on electricity to verify transactions and secure the network) unless you had a financial reason to do so?

Banks cannot replicate this decentralized, incentive-driven network of nodes (miners) because they would have to pay for the electricity themselves (as opposed to networking the expense amongst hundred of thousands of miners).

I hope this clarifies why cryptocurrencies—especially Bitcoin which already has mass adoption—are necessary and valuable.

Cryptocurrencies are THE key ingredient in making block chains block chains, and not just more electronic accounts controlled by central authorities.

Thanks for commenting!

In recent months, there have been numerous reports about financial firms using blockchain technology for transactions NOT involving cryptocurrencies. Here's an example:

https://www.reuters.com/article/us-rbc-blockchain/exclusive-royal-bank-of-canada-using-blockchain-for-u-s-canada-payments-executive-idUSKCN1C237N

Also, I'd disagree that Bitcoin and other cryptocurrencies have mass adoption as they're still only accepted by an extremely small group of online merchants. Even those retailers have faced significant challenges. For example, it was recently reported that Overstock.com mixed up 2 cryptocurrencies and allowed customers to purchase items at significant discounts:

http://bitcoinist.com/overstock-glitch-mixes-bitcoin-bitcoin-cash/

Like you said, you don’t understand it. But that’s not a reason to degrade it. That’s also not a good reason to not make money off of it.
Especially when you can buy crypto with a credit card and earn 1.5x points off that. The profit from any one day on average pays that credit card fee. Cash out. Pay it off. Rinse wash repeat.
You make cash and points at be same time.
Or, you know, listen to the same dinosaurs that said the internet wasn’t commercially viable or that cell phones were a fad. Your choice.

Oh also, error. You can absolutely buy things with btc. Like real tangible things. Saying otherwise is a gross lie. I’ll let the other inaccuracies slide but not that one.

That sounds extremely risky. With the long settlement times price volatility, and potential for exchange outages, I would not feel comfortable risking money that way.

It's possible to buy certain items with Bitcoin, but it's not widely accepted. And Stripe (one of the early advocates of Bitcoin) just announced they won't allow payments with Bitcoin any longer.

https://stripe.com/blog/ending-bitcoin-support

Stripe not accepting Bitcoin was politics, not an announcement they will no longer support cryptocurrencies.

https://www.cnbc.com/2018/01/24/stellar-jumps-20-percent-after-stripe-says-it-may-add-support-for-the-digital-coin.html

It's NOT in Stripe's interest to promote Bitcoin.

It's in their interest to promote Stellar, the crypto of which they own 2 billion of the 100 billion that will ever be circulated. That's worth an estimated $150 million at this time.

In crypto there are politics and interests...and a BIG money to be made.

Your superficial understanding would be fine if you weren't writing articles on such a big blog for people just now learning about cryptos.

Please stick to miles/points.

Thanks for commenting. I think that supports my skepticism even more. There's no universal acceptance of any one cryptocurrency. I think it's just a matter of time before governments and central banks regulate the market.

You don’t get it

There are hundreds of official national currencies around the world...but that hasn’t worked because there’s not a single universal currency....

Rightttttttttttt.

So you don't understand crypto currencies that well but decided to write an article about it? Miles and points is a fun little hobby that allows my wife and I to travel in a way we otherwise would not. Crypto currencies will change the way the world economy functions. Trying to compare the two is ridiculous.

Thanks for commenting. I'm a bit skeptical that cryptocurrencies will change the global economy in any meaningful way. Governments have the ability to regular cryptocurrencies and prohibit mining, like we've seen recently.

I agree with top investment and finance professionals like Warren Buffett and Jamie Dimon who more ore less say the clock is ticking for cryptocurrencies.

Jamie Dimon uses fax machines

BITCOIN BACKPEDAL: JPMORGAN CHASE CEO JAMIE DIMON REGRETS CALLING CRYPTOCURRENCY A FRAUD:

http://www.newsweek.com/bitcoin-backpedal-jpmorgan-chase-ceo-jamie-dimon-775227

I see your point, Keith. It’s like what happened to me once: I was thinking of buying a car but instead I got a jelly doughnut.

Well I just bought a $45,000 car with bitcoin. So...you do your thing and I'll do mine.

Congrats! It's crazy to think that same amount of Bitcoin was worth ~$90,000 a month ago.

Methinks you're having a bit of schadenfreude. You didn't buy btc and now you're gloating when it's down 40-50% from its high. I bought btc... on a whim several years ago. Enough? No. Would I buy any now? No. It's ridiculously volatile, without a doubt. BUT IT HAS ABSOLUTELY NOTHING TO DO WITH COLLECTING MILES AND POINTS. Stop being defensive Keith. And why pick on btc? What about the futures markets? Or the stock market for that matter? Webvan, Pets.com, SunMicrosystems, etc. Remember those companies? Maybe not...you look young. These Companies all went to zero...it happens all the time. Comparing apples with anvils as you do in this article makes no sense.

I'd make the same arguments against any cryptocurrency, not just Bitcoin.

I think folks in the miles & points hobby are really intrigued by cryptocurrencies.

You make great points about companies during the tech bubble. That's why I subscribe to the philosophy that you should invest in companies generating consistent cash flow and profits, as they typically don't go to zero.

One has nothing to do with the other. I get it...cryptos are hot right now so you tried to work it into an article. but still...

Thanks for commenting Dine! Based on my interactions with friends, I think folks in the miles & points hobby are especially intrigued by cryptocurrencies.

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