A PSA to Bitcoin Newbs

My life changed from the moment I truly grokked Bitcoin and gained an appreciation for its profound potential to reroute the course of human civilization. As my close friends and family know, learning about Bitcoin has become my biggest passion and my biggest obsession. It’s my preferred topic of discussion — all the time, anywhere, with anyone. 

Last year, against a backdrop of economic uncertainty and unprecedented stimulus (i.e., fiat money printing), I found an exceptionally receptive audience, particularly with the no-coiners in my life who I’d been incessantly badgering to get off zero. In fact, over the past twelve months, I received numerous requests to hold Zoom talks with friends of friends who were curious about my investment thesis and keen to pick up some practical advice on how to get started. This post is for them, and other newcomers who recently entered the fray.

Now that the bull run is well underway, and a new wave of hysteria is sweeping through the altcoin casino, it’s easy to feel overwhelmed by the noise. I know firsthand how distracting altcoins can be. When I first came into space I, too, felt like a kid in a candy shop.

I thought I had missed the boat on Bitcoin (back in early 2018 when the price of Bitcoin was around  $12,000) and was overly eager to get my hands on the next big thing. I was “diversifying my crypto portfolio,” but without having done proper due diligence.

Even after doing what I thought was proper fundamental analysis, I realize in hindsight how even the more legitimate projects have little to no chance of ever gaining any material traction.

It takes years of education and learning to distinguish good from bad projects so until you’re firmly rooted in the crypto forest, it’s far more prudent to stick with Bitcoin. It has a proven record of performance and is the only digital asset that has earned blue-chip status. 

With parody projects like Dogecoin currently making headline news, now seems like the right time for a public service announcement. Getting caught up in altcoin exuberance can be a powerful force, so here are a few tips to keep you focused on Bitcoin, and some reminders about what sets it apart from everything else.   

With a capped supply of 21 million, there isn’t enough BTC for everyone to be a whole-coiner (someone who owns an entire Bitcoin). Fortunately, each Bitcoin is divisible by 100,000,000 units (or up to 8 decimal places), otherwise known as sats. In due course, as adoption grows, sats will standardize as Bitcoin’s default unit of account. For now, with the price of Bitcoin currently hovering around $50,000, just remember that you don’t need to lay out a full $50k to become a stakeholder — you can buy sats in any denomination of dollars. Once we reach sat/dollar parity, a modest investment of $500 today can buy you around .01BTC or 1,000,000 sats, making you a full-fledged millionaire (in dollar and terms).  

Bitcoin has been the best performing asset over the past decade, yielding an average annualized return of 230%. Anyone who invested in it – at literally any point in time prior to February 2021 – is now in profit. The prospects for further price appreciation are high, so don’t let unit bias deter you from acquiring more. 

Investing in altcoins just because they have a sub-dollar price tag can be a recipe for disaster. In addition to researching the team and mission behind a particular coin, pay close attention to the project’s market cap, trade volume, and liquidity — they are all extremely important metrics when assessing the true market value of an asset and you’d be wise to do some research prior to placing your chips on the altcoin table. A lot of seemingly undervalued projects are fertile ground for pump and dump schemes and many are outright scams. So if you smoke a little "hopium" and decide to venture into the casino to gamble your precious Bitcoin, exercise extreme caution — you don’t want to get caught holding the bags when smarter traders exit their position, take profits and convert them into Bitcoin.

If you’re buying any altcoin that isn’t in the top 50 on CMC (and even many that are), know that you are making EXTREMELY risky investments. It’s akin to betting on a random racehorse in a random city somewhere in the world. To get a bit of grounding, have a look through the Rekt Plebs telegram channel to see how many people have lost their entire investments due to altcoin greed.

Bitcoin is designed to pump forever. Its supreme monetary features, including a fixed and verifiable supply schedule, an anti-fragile payment network anchored in real-world energy costs, digital properties that make it ideal for preserving wealth and securely transferring value across borders (at record speeds), and its pristinely engineered incentive structure will enable it to continue to eat away at other asset classes for some time. 

We are still in Bitcoin’s price discovery phase, so volatility is to be expected, but we’re nowhere near the top. When you consider that Bitcoin’s $1 trillion dollar market cap is only a tiny fraction of other store-of-value assets like gold and real estate, it’s clear that we’re still in the early stages. Once we reach gold’s market cap of $10 trillion, stacking sats at today’s prices will look like a bargain. Trading in and out of Bitcoin is a great way to get burned so ignore the intraday price swings and think long-term.

Instead of obsessing over daily price moves, create time to read and understand news events that are impacting adoption levels. Seeing the big picture will help you relax. You'll be able to rest easier knowing that Bitcoin has become significantly de-risked due to large institutional purchasing over the past year. Companies like Visa, Mass Mutual, PayPal, MicroStrategy, Square, and Tesla are already stakeholders; and fear pedaling by skeptics is becoming less credible by the day.

Concerns that Bitcoin will be regulated out of existence seem increasingly unlikely with multiple Bitcoin ETFs under consideration by the SEC, big banks offering custodial services, and the recent Coinbase listing on Nasdaq. We also now have an army of Bitcoin savants like Nic Carter who are capable of debunking shoddy journalism that spreads unsubstantiated FUD around Bitcoin’s energy consumption. 

Your confidence in the long-term viability of Bitcoin will become stronger when you discover the extraordinary talent in companies like Lightning Labs, Strike, Sphinx, Suredbits, and Atomic Finance that are working to develop a robust ecosystem for Bitcoin. You can also sleep well knowing that on-chain analysis points to a strong HODL mentality among investors. Bottom line: people aren’t selling. So in light of Bitcoin's limited supply and growing demand, we are likely to continue to see “Number Go Up Technology" at play.  

On a personal note, Bitcoin has done a lot more for me than provide financial peace of mind. It has prompted me to reorient my worldview from a first-principles perspective, lower my time preference, and make better decisions that align with some of the core values that I hold dear — personal freedom, self-sovereignty, and self-discipline to name a few.

Studying Bitcoin has exposed me to new ideas, made me a more critical thinker, and provided valuable insights that extend well beyond the realm of money. My friends, I can attest to the adage that Bitcoin changes you, you don’t change Bitcoin.

Don’t be dissuaded by the skeptical traditionalists heckling from the sidelines. As someone who has been happily immersed in this space for the last four years, I can confidently say that taking a methodical and informed approach to your own Bitcoin journey will pay off, in more ways than one.

The depth and quality of content produced by Bitcoiners is incredible so I strongly recommend taking an hour or two each week (or on a daily basis if feasible) to exercise your mind. For starters, check out these articles and books: 

I also recommend subscribing to Bitcoin-only podcasts like:

The more knowledge you acquire, and the more exposure you have to the brightest minds in the space, the more fulfilling your journey will be.

For those of you who recently entered the crypto space in order to gain some exposure to BItcoin, congratulations! You’re way ahead of the curve on so many levels. 

Maintaining strong hands (not capitulating when sell-offs occur) can be a difficult task, but it gets much easier once you’ve begun to explore the first, second, and third-order effects that Bitcoin is already having on our world. The more you learn, the more conviction you’ll build. If you’re not already on board, stop what you’re doing right now and go buy $100 worth of Bitcoin so you can take pride in having bought your first sats when Bitcoin was still under $100k. Then educate yourself about the space and get ready to partake in the most exciting asymmetrical bet in our lifetime.