Over the past decade bitcoin has had its supporters and its enemies. What does it even do for us? Do you see it as an invisible, fake coin, just a number on the screen?
What does Michael Saylor, who has aggressively been purchasing Bitcoin and now holds $5.6 billion worth, understand about bitcoin? Or what about Blackrocks ETF application? What do these billionaire and trillionaire asset managers find so interesting about bitcoin that has them gobbling up the supply of bitcoin?
If you’re not at all curious and your net worth is under $1 million you are going to lose to inflation.
If you don’t even know what that means, let’s take a step back and let’s ask ourselves how much we even understand about the financial system on the most basic level, interest rates.
Borrowing money with a credit card or for a house is kind of the same. The bank borrows money from the federal reserve to lend to you to make a profit on you not paying it back over time.
Interest charges fluctuate.
When there’s nothing tangible that’s being lent out like gold coins, they print numbers on screens or paper that are attached to an interest rate that charges somebody to issue that money and the fed can rise these rates or lower rates at any time depending on the amount of money in circulation to combat inflation.
Inflation means rising the price of goods to try to balance the amount of money in circulation.
The money in circulation is debt, so to balance the debt rising the price you pay for the goods will go toward paying the bill on that debt.
Imagine the government taking at a credit loan for a trillion dollars. It didn’t exist before, but to help pay the debt on that loan the government makes the costs of everything a little more expensive so that the profits rise and they can make the payments on that loan.
Does that make sense? Lesson over.
Now that you understand that, what is Bitcoin and how can it benefit you?
It’s the first sophisticated monetary system that mathematically can not be fraudulent or printed in any way other than its core mechanism, WORK.
You may hear environmentalists complain about how much energy is needed for bitcoin to reward miners for blocks. Without getting into the weeds of that, have you tried to understand why it uses so much energy, and what does that mean for the production of energy?
Every 4 years it gets more difficult to produce bitcoins, they call these events a halving. Actually 93% of all bitcoin has already been mined, and over the next 120 years 7% of the remaining bitcoin will be mined.
It will cost more and more energy to mine bitcoin because the difficulty to adjustment is made on that 4th year effectively cutting in half the rewards for miners to produce a block (in the blockchain).
An example would be like mining for gold, and you know theres an exact amount under the ground because you can see it on lidar, and the first 4 years there’s only loose soil in the way, the next 4 years, maybe some mulch, then some rock, then some booby traps, then some water caves, then some titanium in the way all the way until the year 2140 when the final amount of gold will be mined after it has grossly gotten more difficult you find yourself wading through lava to get to it and hiring thousands of people to help you reach it.
But in that example when you have mined all the gold you have to store it somewhere like a vault, and if it’s a lot of gold and worth billions you have to install a security system or hire guards. With bitcoin, you can remember 24 words in your head and walk around the world through air ports, countries with a billion dollars worth of value just waiting to be unlocked anywhere.
See, the more energy it takes to produce it is a core variable in what makes it valuable over time. This mechanism is called proof of work and uses the likes of physics to secure its software.
When bitcoin gets passed up by people who don’t bother to understand its beauty in software design, its poetic and liberating behavior it has on preserving wealth, it’s inherit state-less issued monetary policy and unconfiscatable nature I just sigh.
It’s the same feeling I get when I wish everyone could see the reality of humanity that I see. We’re all free people sharing the same identity on a finite planet and we all need love, yet every authority on the planet is preventing you from seeing it this way. Just as they are trying to prevent you from seeing bitcoin as the only transcendental hard monetary asset in the universe (far as we know).
So to conclude my statement on the benefits of bitcoin I will issue you some reading material and podcasts to gain an understanding of it so that you do not miss out on a once in a lifetime flight to a global asset.
Bitcoin White Paper: https://bitcoin.org/bitcoin.pdf – this is written by the infamous Satoshi and if you want to read it there you go.
The Bitcoin Standard: https://www.amazon.com/Bitcoin-Standard-Decentralized-Alternative-Central/dp/1119473861 – written by Saifedean Ammous, now advisor to the president of El Salvador a country that is aggressively buying bitcoin, this book will fill you in completely.
The Network State: https://www.amazon.com/Network-State-How-Start-Country-ebook/dp/B09VPKZR3G/ref=sr_1_1?crid=2NZBRK3IMNRCY&keywords=network+state&qid=1698969967&s=books&sprefix=network+stat%2Cstripbooks%2C180&sr=1-1 – not so far off topic but this book is essentially painting for you the vision of a decentralized future.
Finish by watching this long form podcast with Lex Fridman and Michael Saylor. Good luck on your retirement journey. I’ll know what I’ll be buying in my IRA.
Where to buy?
Buy bitcoin with Strike
Where to store it securely?
Send bitcoin to a hardware wallet like Ledger
Write down your 24 word seed phrase and store it somewhere securely!
