Setting Forth

When you first embark on your journey into Bitcoin, you don’t quite know what is ahead for you.

You probably heard the name several times before you actually took the plunge and bought some for yourself. You may have heard the buzzwords “blockchain” and “decentralized”, you may have read something or other about it’s mysterious creator Satoshi Nakamoto or the Silk road, but in truth you really don’t have any idea of what you are getting yourself into.

Your initial concerns will almost entirely revolve around the short range price movements of Bitcoin in dollar terms. When the price rises you begin patting yourself on the back, thinking how smart you were to take on this new investment. You even dwell on regrets for not having gotten in sooner. When the price plunges, you begin to doubt your conviction, maybe you were right all along for not buying earlier, your hands may feel weak and you think of selling out. But all price movements in dollar terms are only temporary, and if you stay long enough, you eventually come to realize that the price of Bitcoin never really moves at all.

One Bitcoin will always equal one Bitcoin.

As you dive further down the rabbit hole and learn more about what Bitcoin actually is and what it seeks to end, you become immune to the everyday ups and downs of the market. You realize that it is not only an investment, but also a vehicle that seeks to change the very fabric of what we believe money is.

In the past, people used all sorts of things as money, from glass beads to Rai stones, from gold coins to bank notes and finally digital numbers on a computer screen.

A stable means of exchange is vital to a thriving economy. A barter system falls short since all means of work are not equal. For instance, it would be difficult for a house builder to exchange his talents with that of a dentist, since a dentist might not have need for a house at the same time a carpenter needs work done on his teeth.

With money, both parties are able to store the fruits of their labor for future use, depending on the necessity of their respective cases. When you have a viable money, the economy is able to grow in new and diverse ways and new goods and services are invented to accommodate the changing demands of the participants; innovation takes place and prosperity emerges.

A Broken System

With our current system, money is created by government dictate, and legal tender laws ensure that it is accepted by everyone. It works for awhile, but the current system is corrupt at its core as some participants have an unfair advantage; they can create in the blink of an eye that which it takes others months and years of their lives to earn.

Government has always favored this type of approach since it affords them the ability to deficit spend, amassing enormous national debts that will never be paid back and enriching their friends via the Cantillon effect. Politicians can simultaneously appease both the war hawks and the welfare state to win votes and ensure their own political survival. This type of system is always doomed to fail. As currency is created into infinity, the market always responds with higher prices.

The more the supply of a currency grows, the less its value becomes, as an increased pool of dollars chases after the same number of goods. To see evidence of this phenomenon one must look no further than the long term chart of the US Dollar’s purchasing power. It has been moving steadily downward since the Federal Reserve system was enacted over a century ago.

As people grow wise to the fraud being perpetrated against them, they dump their dollars in increasing amounts, hoping to get the goods they need before the value of currency is further eroded.

The rate at which a currency is spent is known as the velocity of money. The faster people dump their currency, the faster prices rise. The faster prices rise, the faster the government must create more currency to satisfy the higher prices. The more that is created, the more people seek to dump their currency before more value is lost and so on.

It’s a vicious cycle that eventually leads to hyperinflation and currency collapse, from Weimar Germany to Zimbabwe to Venezuela, history is ripe with examples of currency crisis.

Our current crop of central bankers has been able to avert this from happening to a certain extent because rapid technological advancement has lowered production costs. They also utilize complex financial instruments to prevent the velocity of money from getting out of control.

Nevertheless, the price of goods and services has still risen steadily despite their efforts and it is only a matter of time before all confidence is eventually lost.

Sound Money Fixes This

Sound money fixes this, by giving a level playing field to all, it ensures that the work of one’s hands is stable over time instead of being constantly debased by the money printers. Given a stable foundation, we can really build something that lasts.

Armed with the knowledge of how sound money benefits a society, the necessity of having a fixed Bitcoin supply becomes clear.

There can never be more than 21 Million Bitcoin, and while the Bitcoin supply increases daily, it does so at an ever reducing rate.

The new supply of Bitcoin mined every 10 minutes is cut in half every four years in an event called the Halving. No matter how much government bureaucrats may want to create more Bitcoin to satisfy their needs, they can’t. They are bound by the same code as everyone else, which can only be changed by consensus.

A Bitcoin standard would be a check on the whims of government power to deficit spend over time. If they want to fund a new project, they will have to gain popular support for it. If enough people don’t support the initiative, it is not enacted. Endless wars would burn themselves out and the welfare state could no longer enslave populations with perpetual handouts.

Bitcoin is a true separation of money and state.

Haters and Allies

You will undoubtedly receive criticism of your new path in Bitcoin by those who do not yet understand. Most of your friends will disagree with your decision and mock you.

“You actually bought some of that?” they will ask.

“Bitcoin? Is that thing still around? I thought it was just for criminals and drug dealers. The price just crashed, I hope you sold.”

Most mainstream financial pundits will frame Bitcoin as a gamble, not suitable for traditional conservative investors. Just another fad that will eventually fizzle out, leaving you holding the bag for those that got in before.

They may claim that if Bitcoin ever became a legitimate threat to government power, they would simply ban it. But this is false. Bitcoin developers, miners and verifying nodes are spread across the world. Dedicated individuals in many nations who do not see eye to eye with totalitarian governments, and would not submit to draconian regulations. Any ban on Bitcoin would only increase it’s usage and draw attention to the need for Bitcoin and the flaws of the current fiat money system.

You will endure countless naysayers along the way, each one seeking to weaken your resolve and cause you to doubt. But you will also find new allies in unsuspecting places.

Chance meetings of fellow Bitcoiners in the wild will arise unexpectedly. They will feel like finding a long lost friend in a sea of disbelievers, and instant connections will be made.

A mention of the word Bitcoin overheard in a crowded room or a single glimpse of an emblem on an item of clothing will serve as a sign that you are a member of this elite group. You will find that you are not alone in this journey and that there are many others just like you on the same path and your resolve will grow.

You will soon refine every area of your life, cutting off unnecessary expenses and superfluous desires in an effort to free up more resources and acquire more Bitcoin.

Beware of False Paths

Soon after entering the Bitcoin space, it’s inevitable that you come across many other ‘cryptocurrencies’, that will tempt you with the promise of being the next Bitcoin. The proponents of these new coins will claim that their creation is superior to Bitcoin, that they have faster transactions, better tech, and more privacy. They will tell you that this is your chance to get in early and make better profits since you missed out on the early days of Bitcoin.

But these are all empty promises, and you will soon see that these coins are not special. They cannot imitate the immaculate conception of Bitcoin, and will only serve to enrich their creators. When Bitcoin was created, it toiled away in the shadows for years, it was an experiment with no value and little hope of profit.

Now that cryptocurrencies are a thing, any new coin is only about making a profit for those who created them, people who seek to imitate the central bankers and print their own money.

You must reject the temptation to follow these charlatans and their alternate paths.

While they might bring you temporary profit, if you happen to pick the correct one out of thousands that is; they will all eventually be revealed as flawed and inferior before losing their value. In the end, they will only succeed in transferring your Bitcoin into the pockets of others.

The Essence of The Journey

The journey into Bitcoin encompasses the entire gambit of human emotions. It has the chance to bring out the best and worst in all of us. You will overcome fear and doubt, resist temptation and greed, go against the beliefs of your friends and family and walk alone for a time. You will meet allies and scammers, learn things you didn’t know you were capable of, and develop a steely resolve.

Our lot as Bitcoiners is to experience all of these things; to grow, to learn, to teach and to develop strong hands and a strong community. We aid in the fight against unbacked fiat currency, do battle without ever firing a shot and make ourselves wealthy in the process.

Nothing will shake us out of our position, nothing will make us fear the unknown again, because we know how this story ends.