Bitcoin: Resources To Learn About Today’s Buzzword

Nowadays, you can not go a day without hearing about Bitcoin.  Bitcoin saw a 300+% upswing in 2020 so of course the media and Bitcoin enthusiasts are all talking about it.  They have every right to.  But was there this much hub-bub and hype back in 2018 or 2019 when Bitcoin was relatively stagnant or on the decline?  No of course not.  People see these gains, think they can jump on in to this no-brainer investment, and quickly double their money…. hell triple it.

It also doesn’t help that a world pandemic pushed through in late 2019/early 2020 causing governments to provide stimulus money to help keep their economies afloat.  After all, this free printing of money by governments is what Bitcoin is competing against!  When people see governments going on a free-for-all printing spree, it causes pause to question the strength of that currency.  Where is all that money coming from?  How will the debts ever be paid off?  Is our currency going to be devalued?  Are we going to see inflation?  Will taxes go sky high?

Sure, no one wants to see quantitative easing (QE), inflation, or taxes rise but these economic policies were built to protect you (which likely doesn’t seem to make sense to many but it just may when you really think about it).  Now, we don’t want stagflation (inflation but no economic growth) or hyperinflation (crazy high inflation in the double digits).  The whole purpose of QE is meant to stimulate the economy to help it grow.  Taxes are meant as a social system to ensure people have certain safety nets in place.

Will Bitcoin bail the entire global economy out of a major pandemic?  Or will we need to rely on a centralized entity to try and pull everyone out?

Many Bitcoin proponents say – Look at Zimbabwe.  Look at Venezuela.  There is crazy inflation going on and no one can afford anything.  If they had Bitcoin instead life would be good as Bitcoin can’t inflate like that compared to their now relatively useless fiat currency.

I decided to ask a friend who’s from Venezuela and has all her immediate family there what their thoughts on Bitcoin are.  Her response was something along the lines of – Do you think they can even think about Bitcoin?  They are trying to survive each day.  One day at a time.  They can’t spend any extra thoughts or pennies investing in Bitcoin during these times.

Which made me think… If Bitcoin is meant to be a decentralized currency and protect us from inflation and the fall of currencies – it’s really only protecting those who actually hold Bitcoin (or whatever future currency rules)?  Which could turn to an “us” vs “them” world.  Which makes me think instead of people being “anti-government” maybe it will turn to “anti-Bitcoin”?  I’m going to guess if we ever see the US dollar drop to that level where it’s deemed worthless, we likely are going to have some major issues going on in the world.  There will be no government support to help those without Bitcoin, and these people will likely go into feast or famine mode and cause an all out war.

Any who – back to Bitcoin.  I’ll be honest, I never gave Bitcoin or cryptocurrency in general a minute of my time for awhile.  I don’t think many people within the FIRE community do.  My thoughts on Bitcoin were 100% based off those super annoying scammers on Instagram constantly putting spam comments such as “I made $50,000 last month thank you so much @cryptocrazy” or something along those silly lines.  Pass.  Move on.

Back in October last year I decided to get educated on the topic.  If we were to ever invest in it, I sure as hell want to know what I’m getting into rather and just buy something out of FOMO.  As an econ and math major in university, I took a course on cryptography and it was honestly one of my favorite classes.  Using math, equations, and proofs to secure information is a pretty nerdy topic but I find it fascinating as math really is an amazing “language”.

For the longest time I viewed Bitcoin as a MLM (multi level marketing) Ponzi scheme for those trying to get rich quick off of suckers.  I still think there are far too few people in control.  As of mid January, ~2,100 wallets hold over 1,000 Bitcoins, which are now worth a cool $45 million a pop.  To me, 2,100 wallets with that much control is crazy.  Yet that’s an improvement of 17% compared to last year.  If these whales (as they are called) suddenly cash out, what is that going to do to prices?

Rather than write a post on what Bitcoin is, here is a list of content I found useful to educate myself on the topic.  Note that most people seem to be either 100% pro-bitcoin or 100% against-bitcoin.  It’s really hard to find unbiased data out there so take all of this with a grain of salt.  Of course, all the “how to invest in Bitcoin” in the Neutral(ish) category below are coming from people who invest in Bitcoin so there likely is a bit of a tilt towards pro-Bitcoin into those resources.

The main goal of today’s post is to provide a list of all the content I have consumed on this topic over the past few months with the goal that you can deduct both pros and cons and decide for yourself if you want to get in on the action.  We’re not here to steer you in any direction, instead we are simply providing the resources that we’ve consumed if you’re also interested in trying to wrap your head around this topic too.  The majority of the focus is on Bitcoin but know that there are thousands of other cryptocurrencies in this space.

If you want to invest less than 5% of your portfolio into a “fun” account, go for it.  But just be prepared to lose it and be ok with that.

My personal advice would be if/when you ever make the amount you put in, take it out and let the remainder ride.  That way you’ve regained your actual money back and now it’s 100% “play” money going forward.  For example, let’s say you put in $1,000.  If that $1,000 ever doubles to $2,000, take out your initial buy-in of $1,000 and let the remaining $1,000 ride until whenever you feel its time to sell.  Then if/when the market ever shrivels up to nothing, at least you took your initial investment out.  Unless of course you’re a diehard fan and see it going to the moon – then don’t listen to this!

I will provide a follow up post with my take and conclusion from absorbing all this info but remember this is just our opinion and not investing advice.  I am definitely not a crypto expert nor will I ever pretend to be one.  If I could predict the future value of cryptocurrency, and what the world’s reserve currency will be in say 50 years from now, I would not be writing this blog!  Rather, I’d be on my private plane and surfing in New Zealand.

Some of the questions I’ve been trying to figure out are:

• Why is Bitcoin worth anything?
• What makes Bitcoin special compared to other cryptocurrencies?
• Can I lose my Bitcoin?  Can it be stolen?  Can I send it to the wrong person?  Are there any safe ways to store it?
• What could go wrong in the world if Bitcoin does go to the moon?  Do we actually want that?
• Why is Bitcoin better, or worse, than the current fiat system in place?

I can’t pretend that I fully understand the answers sufficiently enough to explain to you in a post.  But hopefully you can get a better grasp on the subject by checking out some of these resources.

Neutral(ish) Bitcoin / How To Invest In Bitcoin (where I’d recommend starting)

• 3Blue1Brown: But How Does Bitcoin Actually Work?
• We Use Coins: What is Bitcoin? (v1)
• Rational Reminder Podcast: Ep 132 – Cullen Roche: Understanding the Modern Monetary System
• We Study Billionaires Podcast: TIP331 Inflation with Cullen Roche
• Family Finance Mom: 10 Things You’ll Want To Know About Bitcoin Before You Buy It
• Financial Pupil: Bitcoin Is The Future… Or Is It?
• Canadian Budget Binder: Basics for Newbie Investors Interested in Cryptocurrencies
• Money Sense: Should You Invest In Cryptocurrency?
• Money Sense: How To Invest In Cryptocurrency (Without Losing Your Shirt) 
• Bitcoin For Beginners: Guide & FAQ Articles
• BitBuy: 20 Cryptocurrency Noob Questions Answered
• Blockgeeks: How To Invest in Cryptocurrency
• 99Bitcoins: How To Buy Bitcoin in 2021 – A Beginner’s Guide
• Reuters: S&P Dow Jones Indices to launch cryptocurrency index in 2021
• BTC Times: Canadian Bitcoin ETFs Surpassed $100M

Pro Bitcoin

• The Investors Podcast: Bitcoin Fundamentals
• Lyn Alden: 7 Misconceptions About Bitcoin
• Lyn Alden: 3 Reasons I’m Investing In Bitcoin
• The Rational Reminder Podcast: Bitcoin vs Gold: Digital Currencies as an Asset Class with Michael Sonnenshein (interviewee is pro Bitcoin, interviewers do not hold Bitcoin)
• Ted Talk: How The Blockchain is Changing Money and Business
• Ark Invest: Debunking Common Bitcoin Myths
• Andrei Jikh: BITCOIN CRASH: My Response To Graham Stephan
• Blockgeeks: Blockchain Infographics
• Coindesk: Crypto Long & Short: Why Some Investors Get Bitcoin So Wrong, and What That Says About Its Strengths
• The Held Report: Fear and Bitcoin
• Bloomberg: Ark’s Cathie Wood Remains ‘Extremely Bullish’ on Bitcoin

Against Bitcoin

• The Canadian Couch Potato Podcast: Make Millions in Bitcoin (Not Really)
• Our Rich Life: Investing In Bitcoin for Early Retirement – Listen To What This Millionaire Couple Has to Say
• Mr. Money Mustache: Why Bitcoin Is Stupid
• The Motley Fool: Bitcoin Is A Terrible Investment
• Graham Stephan: My Thoughts on Bitcoin
• Business Insider: Bitcoin is in a ‘massive bubble’ and investors don’t understand how it’s supply works, says economist David Rosenberg
• Coindesk: Coinsquare Exchange Execs to Resign Over Wash Trading Scandal
• CNBC Make It: Mark Cuban: Bitcoin is ‘more religion than solution’ and won’t help in ‘doomsday scenarios
• The Motley Fool: 4 Reasons Warren Buffet Can’t Stand Bitcoin
• The New York Times: Lost Passwords Lock Millionaires Out of Their Bitcoin Futures
• Greater Fool: Bitbrains Revisted

Taxes

It’s important to understand the wonky tax rules involved with crypto so Canadians & Americans, please check these out the information below before engaging in anything:

• Government of Canada: Guide For Cryptocurrency Users and Tax Professionals
• IRS: Virtual Currencies

Educate Yourself

Now, please, do not go and make a decision just based off of this post.  Educate yourself.  Just like discovering the world of FIRE, you can go down an endless crypto rabbit hole if you really want to.

The links above are just a few examples of some of the information out there that I personally discovered and found useful.  You can go to these various platforms and not only read the linked material, but you could then consume all the information provided on their platforms.

You could read books such as Blockchain Revolution by Don Tapscott, Cryptoassets by Chris Burniske, Digital Gold by Nathaniel Popper, Mastering Bitcoin by Andreas Antonopoulos, or Bitcoin From Beginner to Expert by Christian Newman.  You could consume podcasts such as Bitcoin Fundamentals, CoinDesk, Hash Power, or Bitcoin Audible.  You could Google anything from Robert Breedlove, Michael Saylor, Tyrone Ross, Lyn Alden, or Paul Tudor Jones.

As you can see from the referenced articles above, there are extremely smart people who are pro Bitcoin as well as extremely smart people who are against Bitcoin.  It’s tough to say “well so-and-so is for/against it” as you could easily come up with a counter argument with another equally smart human defending the other position.  Ultimately it comes down to your own personal view and risk levels.

We’ll be back in a few weeks to dig into our personal thoughts on the topic!

What are your thoughts on crypto and Bitcoin?  Have you spent much time digging into it?  Are you crypto-curious or do you steer clear away?  Do you have any additional resources to provide?

Support This Blog

If you liked this article and want more content like this, please support this blog by sharing it.  Not only does it help spread the FIRE, but it lets me know what content you find beneficial.  Writing is NOT my strong suit and it honestly takes me hours to write each post so the more encouragement the better!  Engaging in the comments below keeps me motivated.  You can also support this blog by subscribing to receive emails anytime a new post is published.  Thank you FImily!

We believe in stacking up life hacks to keep your enjoyment levels to the max without depleting your bank account.  Here are some ways to further educate yourself and save thousands of dollars over your lifetime by making some simple adjustments:

• Investing Newbies: Check out our free Investing 101 Series.
• How much are you paying for your phone plan?  Canadians, learn more about Public Mobile, and see how we are paying $3/mo for our cell phone plan.
• How much are you paying for internet?  Canadians, learn more about the various Independent Service Providers out there to see who services your area so you can lower your monthly bills.
• How much are you paying for home insurance?  We were able to reduce our rates by 25% by switching over to Square One Insurance.  If you live in BC, AB, SK, MB, and ON, check out Square One for your home insurance, landlord insurance, and/or tenant insurance.  Use this link to receive an extra $15 off your quote.  (Note that you must use this link to start the process to get the $15 off even if you prefer to pay over the phone.)
• How much are you paying for your monthly utility bills?  See how you can likely save on this monthly expense.

Sharing is caring!