Tag Archives: bitcoin

Monetary Premium

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I keep thinking of new ways to think about what value Bitcoin provides. Below is the way I thought about it today. It started while talking with a friend at a coffee shop about money. We discussed the gold standard and he asked how it would be possible to go to a gold standard today. The market capitalization of all the gold in the world today is only about $13.7 trillion and the value of all the money in the world is around $450 trillion. Gold currently costs about $2,000/oz. To fully back the $450 trillion of money with gold the gold would have to significantly appreciate. It would increase it’s monetary premium. In fact some central banks have explicitly said they are buying more gold in case this happens!

In a recent interview the Dutch central bank (DNB) shares it has equalized its gold reserves, relative to GDP, to other countries in the eurozone and outside of Europe. This has been a political decision. If there is a financial crisis the gold price will skyrocket,

This website, gold survival guide, did a calculation of what you’d have to reprice gold to, in US dollars, to get only a 26% backing. They determined that you’d need gold to be worth $33,690/oz. This would be a significant monetary premium on gold over what it is worth today. 

To reach a 26% gold backing, the price of gold would need to increase 17.31 times. ($8.76 trillion or $8,760 billion divided by $506 billion = 17.31).

That is a gold price of $33,690 per troy ounce.

Conclusion: To match the 1934 and 1980 “reset” prices and back US debt by the same percentage of 26%, gold would need to be priced at just under US$33,700 per troy ounce!

Many things that are semi-scarce have a monetary premium. A monetary premium is the premium that the market gives a good that has the ability to perform the functions of a money. Money’s primary function is to serve as a medium of exchange. However, before society will use something as a medium of exchange, the good must first be able to function as a store of value. Therefore, one of the functions of a money is to store value.

Gold is the most commonly thought of thing that has a monetary premium. Houses are a good example of something that people don’t often think of that has a monetary premium. Many houses are bought by speculators to store value. For example:

Chinese homebuyers accounted for nearly one-third of Vancouver’s real estate market during 2015, spending approximately $9.6 billion of the $29 billion of total real estate sales, according to a new study by the National Bank of Canada.

Rich Chinese buyers are willing to use houses, which are not very liquid, to store value outside of China. It is a lot simpler way to get value out of the country. It would look a lot more suspicious if they just shipped hundreds of thousands of dollars out of China and parked it in a bank. But to buy a property is an “acceptable” reason to take money out of the country. People are resourceful and will find ways to store value. 

People want assets that will rise with inflation. They can be willing to pay more than the utility value of the asset to acquire it. Unfortunately, it’s never explicitly stated or even talked about that some things have a monetary premium on top of their utility value. Commodities like corn or oil have very little or usually no monetary premium.Their only value is from the things they can be used to do. They don’t store well. To have a monetary premium a good has to have a long life, like gold or houses. Stocks are another thing that has a monetary premium.


One thing that also has a monetary premium that is not often talked about is money! People like to talk about the fact that Bitcoin has no “intrinsic value”. Do you know what is another thing that has no intrinsic value? US dollars. Think about it. What gives a dollar its value? It is it’s network effects. It is accepted as valuable by others. Gold has a utility value as well as a monetary premium. Some people get confused by gold having a utility value and they think that any money has to have a utility value. But that is not true, as evidenced by the US dollar, the primary money in the world, having no intrinsic value! In fact there is really only 1 major difference between US dollars and bitcoin. US dollars can be created at will by the US government, and are everyday. This reduces the purchasing power of every existing dollar, including the ones you own and worked to earn. 

Bitcoin has a fixed supply. Once you own a fraction of a bitcoin, you own that much of the total bitcoin network. There is no  way for anyone to steal your percentage of the network by creating more bitcoin

I often say, if the government quit printing dollars, we wouldn’t need bitcoin. Every government that has had their own currency in history has always printed and debased that currency until it has lost all value. See the Romans. They literally has physical silver coins. They would periodically recall them, melt them down, dilute the silver percentage and reissue them. Initially they would act like they were the same value of coin, but as people came to realize that new coins had less silver they would require more coins for the same goods. 
So back to the monetary premium. US dollars have no inherent value. Neither does bitcoin. But US dollars have a created monetary premium from their acceptance as a means of payment. There is no reason that bitcoin, or anything else that a group of individuals choose to use as a store of value and means of payment could become that and gain some of the monetary premium that dollars have. In essence we can transfer the monetary premium from dollars to bitcoin, if we choose to. In El Salvador bitcoin is already accepted as a means of payment. Many individuals and businesses around the world have already individually chosen to accept bitcoin as a means of payment.
SInce dollars don’t reliably store value, due to the ability of the government to print more, why wouldn’t people choose to store value in a tool that it is impossible to make more of? That is why I choose to store some of my value in bitcoin. If you are interested in talking about the idea of monetary premium more, or the idea of transferring monetary premium from one good to another, get in touch!

Why Bitcoin? And Why Social Security Is Awful.

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Why do I spend so much time reading about Bitcoin and writing about Bitcoin and telling others about Bitcoin? I do it because I want the world to be a better place. Historically, I have given money to many charities to try to make the world a better place. I think that is still a good thing to do. But I’ve always wondered why the world is so messed up in the first place? Many things don’t seem to work. 

At a more naive point in my life I told a friend “I want to work to get rid of money.” Because I had this feeling that somehow money was making the world a worse place. I have obviously grown in my thinking immensely since then.
I now see money as the clear tool it is to foster trade and specialization. Money is actually imperative to a functioning society.
Trade and specialization increase efficiency and make the world a more abundant place.

Unfortunately, the money we have is not functional itself. There are over 100 fiat currencies in the world, Yen, Yuan, USD, Euro, and a hundred more.
So while there is more abundance for some, the abundance is actually concentrated and many are exploited.

Each currency is dysfunctional in the same way. New units are created everyday, reducing the value of each existing Dollar, Euro, Yen, etc.
It is no wonder that there are so many issues in the world when an entity, (the Government) is able to print money and manipulate the market to purchase as much as they want for any pet project that a politician has.

Just 1 example that I am highly against is Social Security.
I went through and created a hypothetical person who started working in 1984 at the age of 25 (after being born in 1959). 

If that person started making $10k in 1984 that would be equivalent to $30k/year in 2024.
I gave this person a 3% raise a year. You can see that in the “income column” below. So this person would have ended working in 2024 with a salary of $32k/year (being 65 years old).

The next column shows the 12.5%/year that this person + their employer is paying into Social Security. After 40 years this person would have paid $98k into Social Security.
I went through and put all the earnings data into the Social Security website benefit calculator, found here. 

https://www.ssa.gov/benefits/retirement/planner/AnypiaApplet.html

It provided an estimate of $1,378/month or $16,536/year. 

I provided an alternative column, where you would instead take that 12.5%/year and invest that in the S&P 500 for 40 years.

As of January 26, 2024, the S&P 500’s price is 4,890.97. If you invested $100 in the S&P 500 at the beginning of 1984, you would have about $6,606.25 at the end of 2023, assuming you reinvested all dividends. This is a return on investment of 6,506.25%, or 11.14% per year.
This person would have $1,074,860.37  in their 401k. They could safely withdraw $42,944/year from this (4%) as well as having a portfolio worth $1 million dollars! This is making a relatively low $30k per year equivalent for 40 years!

But most people I know who have made $30k a year for 40 years do not have a million dollar portfolio. Why is that?

It’s because they are unable to invest 12% of their salary a year, because it is required to go to the government and the Social Security Fund. This is robbing millions of workers of $25k/year in their retirement. 

You could go through this same exercise. Simply go to https://www.ssa.gov/benefits/retirement/planner/AnypiaApplet.html

And input the dollar amount in the table for each year to find the benefit. 

This is bad enough for a $30k/year equivalent worker. The more money you make though, the worse of a deal Social Security is. This is because of the “knee points” in the Social Security return table. The more you pay in, the less you get out. https://retireby40.org/early-retirement-impact-social-security-benefit/

While Social Security being a terrible return on your money is something of a first world problem, there are plenty of other instances of money losing value in other countries that really hurts people in those countries. 

You can read from Alex Gladstein to learn about some of those. 

“The rate of inflation in the U.S. is paltry compared to many other countries worldwide. The chief strategy officer for the Human Rights Foundation, Alex Gladstein highlighted this issue on Monday in a series of tweets. Gladstein is also a bitcoin (BTC) proponent and has been an evangelist for the leading crypto asset for quite some time.

“Many might think that extreme inflation is a rare occurrence in today’s modern world,” Gladstein said to his 27,000 Twitter followers on Monday. “That’s simply not the case. There are 1.2 billion people currently living in countries experiencing double or triple-digit inflation,” Gladstein insisted.”

https://news.bitcoin.com/1-2-billion-people-live-under-double-digit-inflation-many-have-found-escape-in-bitcoin-says-hrfs-alex-gladstein/

Why Bitcoin Makes The World Better – The Bitcoin Layer and “How My Co-worker Identified the Issues Without Identifying The Causes”

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F.A. Hayek in 1984: “I don’t believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can’t take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can’t stop.”

First 15 minutes of the podcast “Why Bitcoin Makes The World Better – The Bitcoin Layer”- I think this is a great 15 minute video to learn about “why Bitcoin” if you aren’t sure what “problem Bitcoin is trying to solve”.

Full episode – Why Bitcoin Makes The World Better – The Bitcoin Layer

Inflation/money printing by the government is a hidden tax, or more nefariously, theft of your savings.

I received the below email from a coworker related to this home for sale.

https://www.homesofiowa.com/idx/listing/IA-WCFMLS/20233854/4426-Granite-Ridge-Road-Cedar-Falls-IA-50613

I was walking the dog tonight and there are several new houses down the street. I looked up what they go for. There is a video of it on the page, it’s a just a house.  Nothing huge, with some basement finished. – coworker

I shared the below picture with this coworker. If you are measuring the world in USD then things are getting more expensive. But if you are measuring in Bitcoin, things are getting cheaper, as Jeff Booth explains in the initial Youtube video I shared above. 

Below is the rest of my reply to this coworker. 

You could always try to put multiple families together in one house, as times will get desperate. That would be the historic solution. And as you said, as people are poorer, they will just have to do it again.

There are plenty of very poor both in the USA and abroad already living this way.

As referenced from the trip I just got back from India from.

Most of the world is ALREADY poor. The USA has benefited from being able to export inflation to the rest of the world for the last 50 years.

We do this by everyone having to buy USD to buy oil. Then every country has a huge pile of US treasuries/dollars. Then we print more.
Printing money is effectively stealing value from people who hold dollars.
That is why NO ONE ever wants to have cash for longer than they have to.

Don’t you think that’s kind of crazy that no one actually wants US dollars “money”?

We buy bonds, gold, real estate, stocks, anything to store the value because we know that dollars lose value over time. It’s wild!

It’s even more obvious in countries like Argentina or Turkey where they have REALLY awful money. But our money also sucks for preserving value over time.

It all started with 1971 and removing the gold backing of the USD. Well really that started in 1930 with executive order 6102 which the government confiscated people’s gold. Paid them $20.67/oz of gold. Then repriced the dollar to $35/oz! they literally stole $15 worth for every oz of gold they took. It is crazy!

$15 was real money back then!

Gold, Silver, Debt To GDP, Wealth Preservation

So I’m just saying you are noticing the results, extremely high home prices. Things getting more expensive. I am telling you there is a clear history to how we got here. And there is literally 1 solution to this problem. Well 2 but 1 will never happen.

If the US government quit over spending and printing new dollars that would fix it. But that will NEVER happen.
So the alternate solution is to save in a currency that has a maximum limit, 21 million bitcoin.

If we DON’T support the bitcoin network we will continue down this path of everything getting more expensive.
I have read so many books about the history of money and governments messing with money. It always happens this way.

The Romans debased their money, see below.


See quote below.

I really encourage you to learn more about bitcoin. It is our only hope.

Super short book, 2 hours on audible, but it’s really great.

The Bullish Case for Bitcoin Paperback – May 8, 2021

by Vijay Boyapati (Author)

F.A. Hayek in 1984: “I don’t believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can’t take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can’t stop.”

Bitcoin Letter To Politician (Joni Ernst) #2

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I wrote a letter to Joni Ernst (and Chuck Grassley) about Bitcoin that you can find here. I have posted Joni’s reply and then my reply to her, trying to correct the many incorrect things she noted in her letter (or her email reply person’s letter). I understand why most people dont’ waste their time contacting their politicians. You never get a straight answer. But unfortunately, beyond voting them out, which is nearly impossible to do as most politicians stay in once elected, the only thing we can do is contact them to try to educate them on topics and encourage others to contact them also. That is why I post my emails with politicians, so others can just copy/paste send them, if they want, to show our politicians that it’s a topic people care about, without making others spend time writing a letter.

Open Letter To Iowa Representatives about Bitcoin

Below is Joni Ernst’s reply. 

Dear Mr. Hoogland,

Thank you for reaching out to me regarding digital asset regulation. It is important for me to hear from folks in Iowa on this rapidly evolving topic.

Whether it is Bitcoin, central bank digital currencies, or digital currency exchanges like FTX, digital assets have been a big topic of conversation in Washington. Cryptocurrencies can create new avenues for financial transactions, investments, and other economic activity given they do not rely on a government’s central bank. While digital assets offer new possibilities, there are legitimate concerns we must also address. 

For example, Bitcoin is among the most popular cryptocurrencies, but we do not know who created it or how much of it exists. These uncertainties raise questions as to how legitimate Bitcoin can be as a currency. Further, cryptocurrencies are volatile. We have seen currencies become extremely valuable, and then, in the blink of an eye, lose their value all-together. This volatility raises questions around the extent to which cryptocurrencies may need to be regulated in some form or fashion so as to create more stability for investors.

Additionally, the decentralized nature of digital assets create potential risks related to fraud and illicit activities. We have already seen how bad actors across the world take advantage of the secrecy digital currencies provide in order to commit crimes, fund terrorism, or evade sanctions. 

However, there is much benefit to be had from greater use of technology in the financial system. Cryptocurrencies do open doors for people who may not otherwise have access to capital. Though substantially distinct from digital currencies, the Federal Reserve recently unveiled its new FedNow service to help give people and businesses instant access to their money when they transfer it from account to account. 

As we continue to flesh out the use of digital currencies and technology in finance, we must strike the right balance between fostering innovation, protecting individuals, and limiting the ability of bad actors to abuse the system. 

You may be interested to know, this year’s National Defense Authorization Act included a provision to tighten oversight of financial institutions working with cryptocurrencies and other digital assets. By instituting regulatory clarity while weeding out bad actors, financial institutions can better ensure digital assets are not improperly used. This is just one of many crucial provisions in the annual defense bill that bolsters our national security and sends a clear sign of strength to our adversaries.

Thank you again for reaching out to my office, and please know that I am closely monitoring this situation as it develops. Please feel free to share any additional insights or concerns you may have regarding digital assets as I always enjoy hearing from Iowans. 

Sincerely,

Joni K. Ernst

United States Senator

My reply is below.

Senator – 

Thank you for your reply. I wanted to point out that you didn’t really address any of the specific topics I noted and you even shared some incorrect factual information. It concerns me when my elected Senator (or their email writer/advisor) is so wrong on a very basic topic. 

It is obvious that this is your canned bitcoin/crypto currency response.
I want to emphasize to you there is a fundamental difference between bitcoin and “cryptocurrency”

You can read about the differences in this short blog post .

Bitcoin Vs. Cryptocurrencies

I asked you to oppose Senator Elizabeth Warren’s “Digital Asset Anti-Money Laundering Act” in particular. You did not mention that bill at all. 

I also encouraged you to learn from Daniel Batten and his work into bitcoin mining reducing methane emissions. You did not mention that at all. 

Flared Methane as a Sustainable Power Source for Cryptocurrency Mining

Flared Methane as a Sustainable Power Source for Cryptocurrency Mining


I also asked you to to learn from Alex Gladstein about the human rights benefits that Bitcoin provides. He has already tried to speak to congress on this.You did not mention that at all. 

https://www.cnbc.com/2022/06/07/human-rights-advocates-say-bitcoin-critical-in-authoritarian-countries.html


Are you not interested in the plight of those fleeing authoritarian regimes?


You did mention, unprompted that “Bitcoin is among the most popular cryptocurrencies, but we do not know who created it or how much of it exists.”

While it is true the inventor, Satoshi Nakamato, is unknown, we do know that there will only be 21 million bitcoin ever. This is ingrained in the code.

This is unlike the amount of US dollars of which we truly can’t know how many will ever exist. Every year the US government prints trillions more in new dollars.

While Republicans pay lip service to the budget deficit when Democrats hold the presidency, historically, Republican presidents run even larger budget deficits than Democrats! You are right to fight against deficits but I believe you do it only in word for votes. I don’t believe you have any personal conviction to reduce the deficit.

I encourage you to talk to your fellow Senator, Cynthia Lumis. She seems to understand Bitcoin. 

Open Letter To Iowa Representatives about Bitcoin

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I have written the below open letter to my Iowa representatives about Bitcoin. I have also emailed it to them with a link to this post so they are able to get to the links below. I encourage you to go to your own representatives websites and email them this also.

I am writing this letter to you directly, you can also find the text below with links to specific articles I recommend you read. https://mywheellife.com/2023/12/18/open-letter-to-iowa-representatives-about-bitcoin/

Senator Grassley, Senator Ernst and Congresswoman Hinson

I am writing to you concerning Bitcoin in general and Senator Elizabeth Warren’s “Digital Asset Anti-Money Laundering Act” in particular. 

I would like to first refer you to the video “Elizabeth Warren’s Anti-Bitcoin Agenda with Perianne Boring” on the “What Bitcoin Did” podcast. 

“Warren’s bill, the Digital Asset Anti-Money Laundering Act, aims to solve a problem that no one has. It that would classify nearly all crypto industry participants — from wallet providers to miners to validators — as financial institutions, subjecting them to the onerous compliance regime of the Bank Secrecy Act. Under this bill, a teenager running a bitcoin mining rig in his basement could be subject to the same compliance burdens as JP Morgan Chase and Goldman Sachs.

But wallet providers, miners, and validators are not banks. They do not hold custody of assets. They certainly should not be collecting or storing the sensitive personal financial information of individual users of an asset. They merely provide infrastructure — the open-source software and computing power to help secure the network. Much like Microsoft, which also supplies a lot of software and cybersecurity products to financial institutions, they are not financial institutions. 

It would be impossible for the industry to comply with Warren’s requirements, and she knows this. The point of her bill is not to improve national security or stop money laundering, but to kill digital asset innovation.” – The Hill

Please also investigate Elizabeth Warren and her collusion with the banks and SEC. I am concerned she is not regulation in good faith. 

Lawyer Says Senator Elizabeth Warren Conspires With SEC Chair Gary Gensler, Violating Her Oath

I want to encourage, you, my representatives, to learn about Bitcoin and it’s many benefits.


I also want you to learn about the benefits of bitcoin mining and it’s ability to mitigate emissions. Specifically, please learn from Daniel Batten and his work into bitcoin mining reducing methane emissions. 

Flared Methane as a Sustainable Power Source for Cryptocurrency Mining

I would also like you to learn from Alex Gladstein about the human rights benefits that Bitcoin provides. He has already tried to speak to congress on this.
Human rights advocates tell Congress bitcoin is essential in countries with ‘collapsing’ currencies

As my representatives, I encourage you to learn about Bitcoin and be a champion and advocate for it. 

Sincerely

Axel Hoogland

Bitcoin Doesn’t Need Anything, Bitcoin Is Already A Store Of Value

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Bitcoin is a store of value, over time.

Bitcoin doesn’t need to have a perfectly stable price over time.

Bitcoin doesn’t need to be used in daily transactions. 

Bitcoin doesn’t need to be able to be transacted in 1 second.
Bitcoin doesn’t need to cost $0.01 to send $1 billion across the world. 

Bitcoin doesn’t need to be the only money in the world, it can exist alongside government currencies, just like gold does today. 

Bitcoin doesn’t need intrinsic value

Bitcoin doesn’t need a government to give it value.

Bitcoin doesn’t need to run NFT and smart contracts on it’s base chain.

Bitcoin doesn’t need to change the maximum number of 21 million bitcoin.

Bitcoin doesn’t need BIPS (Bitcoin Improvement Protocols)!

Bitcoin needs the properties of a sound money.

It should be scarce. 

It should be divisible.

It should be transmissible.

It should be immutable. 

It should be difficult  (or impossible) to counterfeit.

It should be assayable (easy to verify it is what it says it is).


Bitcoin has all these things already. 

It just needs to be “adopted as a treasury reserve asset” to quote Michael Saylor. Meaning people just need to choose to preserve their wealth in bitcoin, over time.

People don’t need to store all their money in bitcoin. A small percentage of people in the world own gold, but it still has value.

Bitcoin doesn’t need to be used in daily transactions to have value. Gold has value but it is not used in daily transactions.

Bitcoin doesn’t need to be “legal tender” to have value. Gold has value but it is not legal tender. 

Money should only be used as money. If you give it some other use or value, it’s possible that it’s main use, as money, is twisted such that it’s monetary value gets distorted and it is no longer a good money!

I encourage you to ask questions about “What is Money?” What is the purpose of money? Why do we need money? What things does money need to do to make it useful?

Bitcoin Market Cap, How Much Could 1 Bitcoin Be Worth?

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Much of this post was taken from this tweet from  MD₿TC@MDBitcoin. I felt this information was very helpful so I wanted to share and expand on it.


Original tweet below

The Inevitable Path of #BTC 

I. Global wealth = between $400-$900T

II. Let’s say 10% of Bitcoins are lost.

III. Let’s do a conservative estimate that #BTC captures  ONLY 1% of global wealth, the value of one #Bitcoin would be? 

then imagine 5%?, 10%? 20%? 50%?  

There is no other path, accumulate as if your life depended on it. 🟠

Complete Calculations:

Available Bitcoins:

Total Bitcoin Supply: 21,000,000

Lost Bitcoins: 10% of 21,000,000 = 2,100,000

Available Bitcoins: 21,000,000 – 2,100,000 = 18,900,000

1% of Global Wealth:

Lower Bound:

1% of $400T = $4T

Value of one Bitcoin = $4T / 18,900,000 ≈ $211,640.21

Upper Bound:

1% of $900T = $9T

Value of one Bitcoin = $9T / 18,900,000 ≈ $476,190.48

5% of Global Wealth:

Lower Bound:

5% of $400T = $20T

Value of one Bitcoin = $20T / 18,900,000 ≈ $1,058,201.06

Upper Bound:

5% of $900T = $45T

Value of one Bitcoin = $45T / 18,900,000 ≈ $2,380,952.38

10% of Global Wealth:

Lower Bound:

10% of $400T = $40T

Value of one Bitcoin = $40T / 18,900,000 ≈ $2,116,402.12

Upper Bound:

10% of $900T = $90T

Value of one Bitcoin = $90T / 18,900,000 ≈ $4,761,904.76

20% of Global Wealth:

Lower Bound:

20% of $400T = $80T

Value of one Bitcoin = $80T / 18,900,000 ≈ $4,232,804.23

Upper Bound:

20% of $900T = $180T

Value of one Bitcoin = $180T / 18,900,000 ≈ $9,523,809.52

50% of Global Wealth:

Lower Bound:

50% of $400T = $200T

Value of one Bitcoin = $200T / 18,900,000 ≈ $10,582,010.58

Upper Bound:

50% of $900T = $450T

Value of one Bitcoin = $450T / 18,900,000 ≈ $23,809,523.81

Buy the quantity that you can and put it in cold storage, wait a decade and watch the inevitable path.

-End original tweet. 


There is a lot to unpack there. 

Let’s start with the basics. 

There is between $400T and $900T of wealth in the world. 

For reference at bitcoin’s current price of $26,000 and total coin maximum number of bitcoin ever of 21 million coins, bitcoin’s current market capitalization is $546 billion. This is between 0.067% and 0.13% of all the value in the world. That’s pretty small currently!

Gold has a current market capitalization of $12 trillion. 

That comes to between 1.3% -3% of all the value in the world. 

As noted above, if bitcoin was to capture 1% of the world value  it would be worth between $211k and $476k per coin. This doesn’t even get it to the same market capitalization as gold!

Lower Bound:

1% of $400T = $4T

Value of one Bitcoin = $4T / 18,900,000 ≈ $211,640.21

Upper Bound:

1% of $900T = $9T

Value of one Bitcoin = $9T / 18,900,000 ≈ $476,190.48

Since bitcoin has many features that make it more useful than gold it has a good chance of at least gaining the adoption of 1% of the store of world value. Bitcoin doesn’t have to be used for every daily transaction for it to be useful or valuable. Gold has value and it is not very useful at all for daily transactions. 

Bitcoin has multiple benefits over gold, it can be sent around the world nearly instantly, it can be broken down into very small units (1 satoshi = 0.00000001 bitcoin  which at $26k/bitcoin = $0.01 is equal to 37 satoshis) and various other benefits that bitcoin has). 

These are just a few of the reasons that I think Bitcoin will likely continue to stay around as a store of value and continue to gain adoption and grow in price and value.

How To Buy Bitcoin

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As bitcoin continues to be adopted many people will have a lot of questions. One of the main questions is probably “How do I buy Bitcoin?”

Here is the quickest and likely one of the safest ways to buy bitcoin, go to the google play store (or apple store) on your phone and download “Cash App”. 

Link your bank account. 

Click “Buy bitcoin”. 

Boom, you now own some bitcoin!

I recommend Cash App because they are a Bitcoin only company. There are many copies of Bitcoin like Bitcoin Cash (BCH), Bitcoin Satoshi Vision (BSV) and many others. Don’t be fooled. Only buy Bitcoin (BTC ticker symbol). Since Cash App only sells Bitcoin (BTC) this is not a problem. That is why I recommend Cashapp for starting.
Companies like Robinhood, Coinbase and others sell Bitcoin (BTC) but also sell others like Bitcoin Cash (BCH), Bitcoin Satoshi Vision (BSV), Ethereum (ETH) and thousands of other cryptocurrencies. You want to buy Bitcoin (BTC) only. 

Now you can start learning about bitcoin. Luckily Cashapp has news articles about bitcoin linked in it’s app so you can read there.

You can also follow Michael Saylor on Twitter. He has a lot of great information about bitcoin. One of the best podcasts I have heard about Bitcoin is “The Saylor Series” By Robert Breedlove on the “What is Money Show”. 

Now, owning bitcoin and holding it on the Cashapp app isn’t the safest way to hold bitcoin. While Cashapp is relatively safe, there is still risk that Cashapp goes under. 

An option now is to download a hot wallet to your phone like Muun Wallet, or GreenWallet (from the company Blockstream),  also from the google play store. You can then transfer your bitcoin from Cashapp to your hot wallet, if you want. You don’t have to do this. You can keep your money on Cashapp. It’s like keeping money at a bank. Using Muun wallet is like keeping cash in a safe at your home. I would suggest learning more about wallets before you transfer your bitcoin to a wallet. I also wouldn’t buy thousands and thousands of dollars in bitcoin until you understand it more. 

Continue to learn more about Bitcoin through various articles. Don’t buy more Bitcoin than you need. You only need as much as you’ll never sell. Bitcoin is not a thing to sell. Bitcoin is a thing to buy, regardless of price.
Don’t panic sell your Bitcoin if the price goes down from $100k to $50k or even $30k again! This is the nature of bitcoin, it is volatile.

Don’t FOMO into thousands and thousands of dollars of Bitcoin unless you are ready to temporarily lose 50% or more.

Don’t invest any more into Bitcoin than you are willing to lose. While I think it will be fine, it’s always possible something wild could happen and it could go to $0 (I doubt this but keeping all possibilities open).


Welcome to Bitcoin!

Oh, and you can always contact me with Bitcoin questions!

BIPs Biggest Threat to Bitcoin

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Reply to – 

A u s t i n | Open Source Fitness

@_AustinHerbert

If #bitcoin fails, we’re fucked. But at this point, how does #bitcoin fail? one sentence ↓

My 1 sentence reply – 

Biggest threat to bitcoin is BIPs Messing with the btc code and making it not btc. BIPs should take min of 10 yrs to review/run on another chain first etc. Mostly I’m against BIPs  “Bitcoin Introduce Peril’s”

My longer reply – 

What is the point of a BIP (Bitcoin Improvement Protocol)? It is to change the Bitcoin base code that is running on nodes to “improve” Bitcoin in the eyes of the people proposing the improvement. But what needs to be changed with Bitcoin?

The critical things to make Bitcoin Bitcoin are:

21 million coins which supply never increases – That already exists. 

Bitcoin needs to be able to be transferred – This is possible on the base layer. That is the whole point of bitcoin, to transfer value.

These are the only things that are important to bitcoin. Lightning network (allows very small transactions to buy a coffee, etc) is very nice and convenient. But you don’t need it for a currency or store of value. Gold has a market cap that is 10x bitcoin. No one is buying coffee with gold.

I think the Bitcoin community needs to be very skeptical of any BIPs and should really resist most BIPs aggressively. 

The necessary thing for bitcoin is adoption. From all the people I have talked to about bitcoin and money a total of 1 has really understood how money works or the value of a store of value that doesn’t have inflation as a possibility. I think people who are working on BIPs could serve bitcoin much better by teaching people about bitcoin and how it works than trying to change it and potentially destroying it.

Is Now A Good Time To Buy Bitcoin?

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Is now a good time to buy Bitcoin? I think it’s going to $10k in a few months. These are the type of things people say when I ask why they don’t own any bitcoin. 

Questions I prefer to ask them are “What is your time horizon?” What is your goal with buying this bitcoin?

If you want to double or triple your money and “get rich” when bitcoin goes to $100k and sell it then no it’s not a good time to buy bitcoin. It actually never is. That is speculation and I hate speculation, in the stock market, or in anything really. That shows you don’t understand the point of bitcoin. Bitcoin should be held forever or at least until $1 million/ coin. I pick $1 million/coin because I think once it’s worth $1 million per coin it will be much more obvious that it is a store of value.  When it’s worth that you may think “Why would I sell this for USD?” You can probably trade it directly for goods and services at that level.
If you have any plans to sell bitcoin in the short term, just don’t even buy it. 

Consider if you buy bitcoin now the downside is $26k to $0, or whatever amount you invest.

The upside is infinite, when measured in dollars.

21 million bitcoin that will ever exist, divided by 8 billion people = .002625 bitcoin per person. 

X$26,000 (current bitcoin price) = $68

So if you invest just $68 you can at least secure your equal amount of bitcoin. 

Get your fair share of btc today.

Realistically even owning 0.002625 bitcoin is more than a lot of people ever will because as we know no money is equally distributed. So the average person will likely own less. That is actually ok. Wealth inequality is the expected state since people have unequal talents and are willing to take different levels of risk.
Bitcoin is your chance to opt into a system that doesn’t reduce your wealth via inflation though!

Once you own a little bitcoin you’ll be more inclined to learn more about it. I bought it for the first time in 2017. Then got distracted by a different coin , litecoin, that was “a better bitcoin”. I lost money on litecoin but continued to learn. Eventually I came to learn the problem that bitcoin solves and why there can’t be a better bitcoin.

“If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry” – Satoshi Nakamoto ,  creator of bitcoin.


While Satoshi is probably right that he didn’t have time to try to explain it to you, I think I do. I enjoy trying to help others learn about bitcoin. Don’t hesitate to ask questions if you are genuinely interested in bitcoin!