Fellow humans,
Bitcoin is for everybody similar to how the internet is for everybody. I’m not saying accessing either one is always easy, but truly nobody can stop us from utilizing Bitcoin or the internet. Even in some of the most austere places on earth, people can travel to an internet cafe and conduct business. Additionally, the exponential growth of mobile phones might imply that someday, the entire population could have access to a cheap smartphone, which means access to the internet and Bitcoin.
Not only is the availability of Bitcoin for everybody, but also the monetary policy. Every Bitcoiner likely has their favorite feature, and mine is monetary policy. I feel very confident and safe holding bitcoin, because I know the odds are forever in my favor, and nobody will ever debase my holdings. The maximum supply of bitcoin is 21 million, and we will reach the max supply via the monetary policy (halving events). Imagine if each government had a strict monetary policy (money printing schedule), and they actually stuck to the schedule. Bitcoin would be unnecessary and irrelevant.
Bitcoin has other features though. People often compare bitcoin to gold, which is completely understandable, and I agree with the comparison. Similar to how we compare bitcoin to the dollar because of monetary policy, we compare bitcoin to gold because of sound money principles. Both are neutral (decentralized) layer one money, scarce, fungible, durable, portable, divisible, recognizable, and mining is energy extensive. Two of the biggest advantages bitcoin has over gold is bitcoin’s finite supply and technological aspects. We don’t know exactly how much gold is on earth, but we know the exact number of bitcoin. A physical piece of gold worth $5 cannot be sent from America to El Salvador in a matter of minutes, but any amount of bitcoin can travel to any country on earth almost instantly via the internet and Bitcoin network, and the transaction fees are typically miniscule.
Bitcoin is certainly both a currency and store of value. Understandably most people don’t want to use a volatile currency, but the right features are already built into the Bitcoin protocol (and improving via Lightning), and volatility should decrease as the market matures in the coming years. Only a matter of time before one bitcoin is valued at $1 million and most people are willing to accept as a form of payment.
No need to go any deeper into the properties and features of Bitcoin at this time. Today’s letter is intended to help new bitcoin investors enter the space. In fact, no prior knowledge or experience is required. I am living proof that one does not need to be super smart to understand Bitcoin. The key word is understand. People who understand Bitcoin are more likely to succeed as a bitcoin investor than people who do not understand. If we fail to invest our time and effort to learn any new job or skill, we will fail to excel.
Below are some useful techniques to help guide the next wave of Bitcoin pioneers.
One Way To Think About Bitcoin
Bitcoin is the savings account we’ve never had and always wanted. The new year is 26 days away. Many people will be wanting to resolve some problem, and/or become better at something. Managing money is a popular topic, especially in America, which means many people will be seeking a money-related resolution. Building a savings account is a huge part of becoming financially responsible. Treating bitcoin as a long-term savings account is a very solid strategy.
My ground rules for managing money:
avoid debt and wasteful spending
save/invest
know exactly how much we make and how much we spend
I’m almost cringing at myself right now, because I’ve just realized my ground rules can be an acronym (ask), and 12 years in the military means I’ve had to learn way too many acronyms. I suppose acronyms can be helpful.
Moving along, let’s not hurt our brains while trying to find a way to complicate the concept of managing money. It’s really simple, just requires self-control and commitment. All we need is our own individualized plan, and the will to consistently execute. For those who fail, the lack of discipline will be their downfall.
One final note about how to think about Bitcoin — don’t trust, verify. Question everything I’m writing. Do your own research, and you’ll see for yourself that Bitcoin is the most transparent money in the history of planet earth.
One Way To Treat Bitcoin
Because bitcoin should be thought of as a savings account (for most people), bitcoin should also be treated like a savings account. However, we’re not talking about the anything goes savings account which can be used for vacations or toys. We’re talking about the emergency savings account which should only be used for important things. We don’t want anybody wasting bitcoin on a cruise, but we also don’t want anybody becoming homeless while hodling a stack of sats.
Maybe I should offer another helpful tip on how not to treat bitcoin. Don’t treat bitcoin like some sort of sacred instrument. Bitcoin is just money, and the love of money is the root to all kinds of evil. Trust me, I’m dealing with the challenges on a regular basis. I’m trying to feel less offended when people say reckless/inaccurate things about my favorite form of money; so it’s a journey, not a destination.
One final note about how to treat bitcoin — take your leap of faith sooner rather than later! Nothing in today’s letter is financial advice, but pull the trigger when your target is in your sights. Everybody will have their own moment of validation when they’re ready to trade an inferior asset for bitcoin. Don’t procrastinate, and don’t let fear control you. Feel free to refer to my latest letter to learn about managing risk.
Buying Bitcoin
As long as we end up holding our private keys, how and where we buy bitcoin does not matter very much. However, certain factors such as transaction fees, platform terms/conditions, and coin history should influence our decisions. Let’s briefly unpack private keys, and then I’ll recommend some platforms. A bitcoin private key is simply a large (256 bits) secret number that allows bitcoin to be unlocked and sent. Each private key creates a unique signature that authorizes the transaction of bitcoin for the owner. It’s called a private key because it is meant to be kept private and not shown to other people. Not your keys, not your coins.
Below is a list of some of the bitcoin platforms I’ve used to purchase bitcoin. The first platform I’ve ever used is Coinbase, but my current favorites are Strike and BlockFi. I feel obligated to mention that most platforms offer bitcoin plus other crypto assets. I don’t recommend being distracted by shiny objects. Stay focused on bitcoin. Please note the following platforms are not available in every country/state. Also, if you decide to click below and sign up, both of us might receive a small bonus.
Lately I’ve been hearing Bitcoiners say things along the lines of nobody is really criticizing Bitcoin after they’ve done 100 hours of research. For the most part I agree. Bitcoin is fair money. If somebody does enough real research to actually understand Bitcoin, and they’re still not in favor, I would question their motives.
Until next time,
Salvatore Norge
P.S. — Feel free to find other Bitcoin resources below.