This not financial advice. I am not a financial advisor. (In other words, I don't take 20% - 30% of your wealth to provide services you can readily do on your own... I joke, I love financial advisors. Shout out to financial advisors). You can call me The Founder. I am a freedom-loving, guitar playing, song-writing, amateur golfing, artist wannabe, regular guy. I figure there might be a lot of regular people out there like me.
Just doing your thing. Whatever your thing is, it's cool with me as long as it's not illegal or whatever. I am mostly just trying to make good decisions in life. Aren't we all? Right now, I am operating at about a 50% success rate. So, you may not want to listen to me unless your success rate is worse than mine.
However, today, I wanted to talk about Bitcoin and five reasons I invested in it. This is not five reason Bitcoin will save the world. I decided to become a Bitcoin investor, not a Bitcoin fanboy. To invest in something, it should be valuable. Do we really need Bitcoin? What function does it serve?
Let's go back to 2018, when I had no money and no real plan on how to make money. Sure I had ideas, and some friends. We thought maybe we could start a company doing apparel and art...or something. We didn't really know. But when you try new things, it can lead down some interesting paths (sometimes in a good way, and sometimes in a bad way). Back in 2018, I had never heard of cryptocurrency, or digital currency, or Bitcoin or Ethereum.
We thought we could promote our freedom-loving music and art for our new company on Minds.com, the freedom-loving alternative to Facebook. So, I found it strange I could boost posts to get more views on Minds.com using something called cryptocurrency. All I needed was something call Ether or Ethereum. It sounded ummm, fake. It sounded weird. But hey, if I could get more views for my company using it...why not?
I had to figure out how to get it, which led me to Coinbase.com. A cryptocurrency exchange platform. I didn't understand any of it, but I bought $50 worth of cryptocurrency that I could then use on Minds.com. Think of it like advertising money. Except I only used probably about $1 worth of it or so to actually promote the company. Then I forgot about it. The company my friends and I were trying to start got sidetracked. The cryptocurrency I left on Coinbase.com, I forgot about that too. After all, it was only about $50. Not exactly life-changing money. Although, when your net worth has been as low as $25 (yes, total) you start to appreciate the value of a dollar.
Now let's flash forward, about four years. I hadn't given cryptocurrency any thought, except that it had popped up in the news here or there. I don't remember exactly when, but several years later a thought popped into my mind as I was sitting at my desk working. "Didn't I have about $50 on Coinbase? I wonder if I can remember my login credentials?"
Thankfully, I remembered my login username and passowrd to Coinbase. Also, thankfully Coinbase had not collapsed ala FTX (which could have happened). Sure enough, my money was still there. Except it wasn't $50. It was over $400 since the value of either had gone up about 9x in value. At the time, I really needed the money too. It was delightful, surprising. A stroke of luck for a regular guy just taking a divergent path in the world. So, what did I do? Buy more ether? Realize I just stumbled upon a pathway to become a millionaire? Log back into Minds.com and promote the crapp out of my music and art, etc.? No, I did what any fool would do and cashed out immediately. I needed groceries, or whatever.
But it did open my mind to investing. Maybe I should be investing in stuff. Stocks? I remember in college opening an E-trade account and was about to start investing. I never really got around to it, but that's probably a good thing because the market collapsed soon after I opened that account. My timing is typically terrible.
So I opened up a TD Ameritrade account and a new Coinbase account and started buying things. Once again, I am no financial expert. However, my time investing has led me to invest in Bitcoin for the following five reasons.
Number One: The Dollar is Not Reliable
Let's set Bitcoin aside for a second, and just consider the primary form of money. The U.S. Dollar. It's paper. It's owned and controlled by the U.S. government and the Central Bank and Federal Reserve. They can print as much as they want, whenever they want. It is essentially monopoly money. As in, the children's board game. They can manipulate the value of the U.S. Dollar intentionally or unintentionally.
Money is simply a store of value. Price is determined by supply and demand. The worst thing you can do if you want a reliable currency system (i.e., money) is to change the supply frequently. That's exactly what government and central banks do.
In fact, if you do nothing and simply leave your money in a bank, your purchasing power will decrease over the next several years. In other words, if you have $50,000 saved today, in several years you will have the equivalent value of $25,000 due to inflation and printing of money.
Number Two: Bitcoin Has the Potential To Cure Inflation Issues of The Dollar, and Dollar Alternatives
There will only be 21 Million Bitcoins in existence. That's it. No printing more money or having a central authority own the currency and creating more of it to serve its own purposes (unless of course the protocol for Bitcoin were changed). However, the possibility of having a fixed amount of currency solves the inflation issue and potentially makes Bitcoin a very valuable commodity. If someone were to ask me, what does Bitcoin do?
I would answer that it serves as a stabilized store of value. As discussed above, the U.S. Dollar serves as a store of value...but NOT a stable one. Another alternative store of value is gold or silver. But those are not fixed commodities. More gold and silver can be mined. Bitcoin is sort of a climate-controlled gold. A more accurate and reliable gold. An easier and less costly to store gold. Bitcoin is a type of gold that can readily be transfer and exchanged and converted to any type of currency imaginable nearly instantaneously.
Number Three: Banks are Not Reliable or Trustworthy, and with Bitcoin you can BYOB (Be Your Own Bank)
Your bank could fail, collapse or easily steal your money. If that happens, you may be able to recover some of it through federal insurance programs. But how reliable is our government? And what if you had more money that the insurance covers? You may as well kiss your money goodbye. You could keep your money or physical gold in your house or storage facility. But it could be stolen from there as well. Much that banks do also irk me.
Banks offer me a few tiny points of interest, while they use my money (make gobs of money on it probably buying Bitcoin...or potentially lose my money altogether which is fine for them as long as I don't suddenly come knocking on their door for it). Meanwhile, the value of my money is eroding all the time as the central banks and federal governments do their best to ensure the dollar inflates and collapses.
Bitcoin offers an alternative. A cold wallet. A cold wallet allows me to store value digitally outside the risk of failure or misuse of my money from a bank or any other party. When I finally had my cold wallet and my digital currency stored there, it was as if a lightbulb went off. I am the bank now. I don't need a bank now.
Instead of relying on the bank, I now rely on myself. I can send money to anyone without using a third-party bank. I can store my money without relying on a third-party bank or storage facility. It's more secure than keeping gold in a safe in my home. Basically, the only risk to losing my money is if someone were to access my key seed phrase (i.e., the password to my cold storage) or if I lose my seed phrase (in which case not even I could access the digital currency any longer). It seems scary having that level of responsibility. But would I rather lose money because I screwed up, or because some dimwit banker or government official eroded my money while they live lavishly in their mansions and vacation homes and private jets? I think the answer is obvious.
Number Four: Bitcoin is Becoming Increasingly Accepted
The SEC has approved Bitcoin ETFs. Translation...our government is allowing the digital currency revolution to move forward. And yet most people do not understand digital currency nor own digital currency.
Number Five: I View It as Low-Risk, High Reward
Michael Saylor is probably the world's leading Bitcoin advocate. I believe he has said Bitcoin is either going to $0 or it's going to $1 Million plus per coin. I agree with him. Bitcoin is either a revolution of money as we know it, or a bust that will not survive. If it's a revolution there's almost no limit to its value. Buying Bitcoin today is like buying a block of New York City in the year 1800. Except I expect the appreciation of value in Bitcoin will be much higher and faster than the value of a NYC city block, if Bitcoin really achieves what it promises to achieve. For that reason, I view it as low-risk, high-reward. You likely don't need a lot of Bitcoin to become wealthy. You just need some before the price explodes. If I'm wrong and it goes to $0...well, I've lost some money. I'll pick up my guitar and probably write a song about it. I've been nearly penniless before, and I am still here. It's not that bad being poor honestly. It's manageable. If I'm right, I'll post a pic on my blog of my much nicer car in the near future.