What I Learned From Ignoring Bitcoin – Bitcoin Magazine
This is an opinion editorial by Konstantin Rabin, a finance and technology writer.
I am one of those who was fortunate enough to find out about Bitcoin more than a decade ago before it gained mainstream attention. Sadly, I am also one of the morons who saw this opportunity, didn’t think too much of it at first and let it fly by.
In this little story, I’d like to share the path that led me to pass on investing in bitcoin three different times before eventually giving in and becoming a HODLer. So, here are the key lessons I learned along this journey that are worth sharing with anyone who is still doubting BTC.
The Inception
Given that I started my first full-time job in an online brokerage back in 2011, it should come as no surprise that I had a bunch of colleagues who were really into trading and super passionate about everything related to investments, technology and the progress of the financial world. It wasn’t long before I made a friend named Edgar. We shared some interests, predominantly gaming and our long-standing nicotine addictions. Even though we worked in different departments and rarely had to collaborate for our jobs, we would still ping each other whenever it was time to head out and smoke a ciggy, gleefully chatting about life, the universe and everything else, as we dosed on nicotine and fresh air.
One day, sometime during 2012, I popped through one of these “smoke?” messages to Edgar when I noticed that his Skype status was some sort of gibberish that looked like a cat had been walking over his keyboard.
It looked something like this: “1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2.”
During our smoke session, I asked him, “Was it a cat, or did your account get hacked?” He denied both of these possibilities and then went into a long and complicated explanation about Bitcoin addresses and blockchains.
Edgar passionately explained what the whole Bitcoin thing is all about, and his excitement instantly got me extremely interested in the topic. Being in the investment industry, I was well aware of many online scams and fake dubious products such as e-gold, that seemed, at least at the surface level, to all be similar. But, the more he told me about it, the more Bitcoin seemed like it might be much more than just some fly-by-night scheme; at the very least, it was worth a gamble.
My biggest problem was that 2012 was probably my worst year on record when it came to financial health, and while 3,730,218 public keys already existed on the Bitcoin network by then, I certainly didn’t have the spare cash to go gambling on some new and unproven technology promising to “revolutionize” the way we do money.
To put it bluntly, I was so poor. So poor, in fact, that by the last week of each month, my grocery store visits would come down to a choice between buying food or killing the hunger pains with a pack of cigarettes. So, I came to the conclusion that, while eating meat was considered a luxury, gambling on the future of digitized tokens was not within the scope of logical spending. Back then, bitcoin was trading for under $10.
The Doubt
Let’s fast forward to 2015. Having gotten a few good years of work under my belt, I was an experienced employee and had moved up to head marketing strategy and execution for one of the most prominent fintech startups in Europe. The workplace was great. Most of my colleagues were hardcore software developers who worked ceaselessly on retrieving people’s financial data from banks without asking for banks’ permission. As if to enforce the kind of work being done, there was even a good old Jolly Roger flying in the office. As you can imagine, many of my colleagues were huge fans of Bitcoin and everything that it stood for.
Since I’d grown quite a lot professionally, the numbers that indicated my salary had also seen a substantial addition. I was finally able to buy cigarettes and food, while even having a chunk of money that could be set aside for a rainy day. Working in this world, I knew more than most that just keeping your money in the bank is not the way to go and I started thinking of investing my extra capital, as I had no real plan for spending it.
My colleagues would fling the term “Bitcoin” around the office quite often, but I was still skeptical as to whether it would be a solid investment. At the time, bitcoin was trading at around $250, having just crashed from its all-time high of around $1,000. I approached it with my well-trained investment brain and concluded that bitcoin szx most likely never going to recover and that it would keep dwindling until just a few of the most hardened nerds were still clinging to it.
I was even looking at the Bitcoin dominance charts and seeing that, despite this fall, it still had a massive dominance over the market, which led me to the conclusion that it was the only cryptocurrency that managed to achieve something, and with no competition, it would never manage to grow to something huge.
“I need a more stable investment product for my savings,” said the wise investor in my mind, and so I bought $7,500 in gold bullion. Having kept an eye on the continual rise of gold since the economic crisis of 2008, it struck me as one of the most stable investments possible.
The Rejection
Let’s take a jump to 2018 when everyone was absolutely crazy about crypto. Besides bitcoin, a lot of other cryptocurrencies emerged and the initial coin offering (ICO) boom was in full swing, with $6.88 billion being raised through ICOs in just the first quarter of 2018. Everyone and their mothers were talking about Bitcoin and cryptos. You went for a haircut and would hear about it at the barbershop, go on Facebook and you couldn’t find a single page or group that wasn’t mentioning crypto in some way or other; even my parents gave me a call and asked me if I had any, telling me that I should get some since they heard it is likely to go up.
At that point in time, I was already offering some content marketing services on a freelance basis, and business was going well as the ICO bros would throw money at nearly any services they were offered as long as they could pay in crypto. Even though stablecoins like USDT had already been around for a while, it was quite uncommon for anyone to transact in them. I saw most of my payments coming in the form of BTC, with the rate ranging from $4,000 to $13,000 per bitcoin.
It was during this time that I acquired my first bitcoin, but being swept up in the absolute craziness that surrounded the whole crypto space, I decided not to hold any BTC and sold it all through someone I found via Local Bitcoins as fast as I got it. Back then, the daily volatility was huge, and I would catch a cab down to the local Bitcoin exchange as soon as the BTC hit my wallet to cash out for the safety of fiat money.
The Acceptance
The middle of 2018 was a turning point for me, career wise. I quit working full time for someone else and decided to focus on building my own company. At this time, I was also able to flip one of my projects for a hefty sum, which provided the initial capital to get my new venture started, while the funds sitting in my account allowed me to sleep calmly at night as I built the new business.
Life was good. I already owned some real estate, was making way more money than I could spend and had all the work opportunities I could handle. Things were on the up and up.
Then, one day, it just hit me. Why on Earth would I cash out? I have plenty of fiat in the bank and plenty of other investments in the markets. How does having an extra $10,000 to my name make any substantial difference to my wellbeing?
I finally came to the conclusion that it wouldn’t, but having no bitcoin could very possibly lead to me becoming poor again. What if fiat turns to monopoly money? After all, I don’t really trust the government and the people who I had met throughout my life who trusted Bitcoin were the ones I actually trusted a heck of a lot more than the people who dealt with fiat. With this in mind, I started hoarding and holding onto as much BTC as my finances would allow. My logic was simple: I get paid in BTC, I get to keep it without cashing out, ever.
What Lessons Have I Learned?
I am not angry at myself for not acquiring bitcoin earlier. Overall, I am a happy man, and despite the recent crypto winter and events like the FTX crash, I am still very bullish on crypto as a whole. Yet there are a few specific lessons that I took from my journey with BTC that I would like to share with you now.
Lesson One: You’re Never Too ‘Small’ To Invest
At the inception stage, I was thinking that it would be so great to spend some $1,000 to acquire BTC, but I simply didn’t have it and I let the opportunity slip. Overall, if you spot the opportunity, take it.
You should not invest all of your savings or feel uncomfortable because of your investment, but committing even a fraction of your income should not be too hard. Could I have saved $50 somehow back in 2012 to acquire 5 BTC? Most likely yes, but the idea of investing just $50 was a turnoff for me.
Lesson Two: Sacrifices Are To Be Made
I had to dig up some past experiences to compose this story since I wanted to get the dates right. While doing so, I noticed a $100 hotel booking made in early 2012. This was for one night abroad, which was pretty much a tourist trip with my girlfriend.
Yes, being broke and spending so much on a hotel is not the wisest decision overall. But hindsight is 20/20 and looking back, I could have certainly salvaged the trip and invested in BTC instead, or I could have simply gone to a cheaper hotel and spent the remainder on buying BTC. There is no use in looking back and feeling bad, but remember that making a sacrifice today could lead to your financial wellbeing a few years down the line.
Lesson Three: Balance Your Investment Portfolio
Every investment book tells you, “Don’t put all of your eggs in one basket.” Nothing is new here. Yet this is something I completely ignored back in 2015. I did have money to invest, and I did have some desire to acquire BTC, but for some reason, I decided to go all-in on a single commodity. If I had invested even just some 20% into BTC, my return would have been substantially higher.
Lesson Four: Don’t Chase Historical Prices
One of the reasons why I chose to invest in gold instead of BTC is simply because I felt that I was buying gold “cheap.” I weighed this against the fact that I would have had to pay 25 times more for bitcoin at that point than what I could have paid some three years before. In retrospect, I now know that the price now is the price now — don’t discount an investment today just because it looks expensive when compared to three years ago.
Lesson Five: Become A Part Of The Ecosystem
Accepting and holding BTC is considerably easier (mentally) than purchasing it for fiat. If you offer services or goods, why not let your clients pay in BTC? Just don’t make the mistake that I did and cash everything out as soon as you get it in.
Keep at least a fraction of your BTC balance intact and forget about it for now. This will only drive the adoption rates higher and will work in your and the whole community’s favor in the long run.
This is a guest post by Konstantin Rabin. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
