Five Lessons I Learned from Ignoring Bitcoin for Years
This opinion editorial is by Konstantin Rabin. He is a finance and technology journalist. I was one of the first to learn about Bitcoin more than a decade before it became mainstream. Unfortunately, I am also one the many morons who saw this opportunity and didn’t think much about it at first, but let it go. This is my story. It’s how I ended up investing in bitcoin three times before finally giving in to the temptation and becoming a HODLer. Here are some of the key lessons that I learned along the way. I was a full-time trader and passionate about technology and the advancement of the financial industry. I met Edgar, my friend, not long after. We shared a few common interests, mainly gaming and our long-standing nicotine addictions. Although we worked in different departments and were rarely required to work together, we would still ping one another whenever it was time for us to go out to smoke a ciggy. We would gleefully chat about life, the universe, and everything in between, while we ingested nicotine and fresh air. I was smoking one of these “smoke” cigarettes sometime in 2012. Edgar, when I noticed that Edgar’s Skype status looked like a cat walking on his keyboard. It looked something like this: “1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2.” During the smoke session, I asked him if he was a cat or if his account had been hacked. He denied both of these possibilities, and then went on to explain the complicated world of Bitcoin addresses and blockchains. Edgar passionately explained the Bitcoin phenomenon to me, and my enthusiasm instantly made me very interested in the topic. As someone who works in the investment industry, I was familiar with many scams online and dubious products like e-gold. They all seemed similar, at least on the surface. The more he explained it to me, the more Bitcoin seemed like a more serious investment than a mere fly-by-night scheme. At the very minimum, it was worth taking a chance. My biggest problem was 2012, which was probably the worst year for me in terms of financial health. While 3,730,218 public key were already available on the Bitcoin network, I didn’t have enough cash to gamble on a new, unproven technology that promised to “revolutionize” how we make money. To put it bluntly, my situation was very poor. I was so poor that my grocery shopping trips would be down to one choice: buy food or kill the hunger pangs with a pack cigarettes. I concluded that while meat was a luxury, gambling on future digitized tokens was not logical spending. The price of bitcoin was $10 back then. Now, it’s just over $10. After a few years of experience, I was a skilled employee who had been promoted to head marketing strategy execution for one the most well-known fintech startups in Europe. It was a great place to work. My colleagues were software developers who worked tirelessly to retrieve people’s financial information from banks. To enforce the work being done, there was even a Jolly Roger in the office. You can see that many of my colleagues were big fans of Bitcoin and all that it stood for. I was able to buy food and cigarettes, and had enough money to save for the unexpected. Working in this industry, I realized that keeping your money in the bank was not the best way to go. I began to think about investing my extra capital as I didn’t have a plan for how I would spend it. Although my colleagues would often use the term “Bitcoin”, I was skeptical about whether it was a good investment. Bitcoin was trading at $250 at the time, just a few days after it crashed to around $1,000. My well-trained investment brain approached the matter and determined that bitcoin szx was unlikely to recover. It would continue to decline until only a few nerds remained clinging to its value. I looked at the Bitcoin dominance charts, and saw that it had a huge dominance over the market despite its fall. This led me to conclude that it was the only cryptocurrency to have achieved something and that there was no competition. I needed a more stable investment product to save my money, so I bought $7500 in gold bullion. It was a stable investment that I had been watching since 2008’s economic crisis. Let’s jump to 2018, when everyone was crazy about crypto. There were many other cryptocurrencies that emerged, and the initial coin offerings (ICOs) boom was full swing. In fact, $6.88 billion was raised through ICOs within the first quarter 2018. Everyone was talking about cryptos and Bitcoin with their mothers. You would go to the barbershop and hear about it. Then you would go on Facebook and find every page and group that mentioned crypto. Even my parents called me and asked if I had any. The ICO bros would spend money on almost any service they offered, as long as they could pay for it in crypto. Although stablecoins such as USDT were around for some time, it was not common for anyone to transact with them. My payments were mostly in BTC. The rate ranged from $4,000 to $13,000 for each bitcoin. I bought my first bitcoin during this period. However, I was so enthralled in the crypto world that I decided to sell all of my BTC through someone I found via Local Bitcoins. The daily volatility was enormous back then. I would take a taxi down to the local Bitcoin exchange to cash out my bitcoins for fiat money as soon as they hit my wallet. The Acceptance In the middle of 2018, I experienced a career turning point. I decided to quit my job and focus on building my company. I was able to also flip one of my projects at a large sum. This provided the initial capital I needed to get my new venture off the ground. The funds in my account allowed for me to rest easy as I built the business. It was a good life. I was already a homeowner of real estate and was making more than I could spend. I also had all the work opportunities that I could handle. It was all going well. Then one day it hit me. Why would I cash out? I have plenty in the bank, and many other investments in the market. How can having an extra $10,000 in my name make a significant difference to my well-being? I came to the conclusion it wouldn’t. However, having no bitcoin could lead to me becoming again poor. What if fiat becomes monopoly money instead? I don’t trust the government. The people I have known throughout my life who trusted Bitcoin were actually the ones I trusted more than those who dealt with fiat. This was the reason I began hoarding BTC and retaining as much as I could afford. My logic was simple: I get paid with bitcoin and I can keep it forever without having to cash it out. What lessons have I learned? I am not mad at myself for not having acquired bitcoin sooner. I am a happy man. Despite the recent crypto winter and events such as the FTX crash I remain bullish on crypto in general. But there are some lessons I learned from my experience with BTC. I thought it would be amazing to spend $1,000 to acquire it, but I didn’t have it, so I let it go. If you see an opportunity, don’t hesitate to take it. It is not a good idea to invest all your savings. You shouldn’t feel uneasy about it. However, committing even a small portion of your income should not be difficult. Could I have saved $50 in 2012 to buy 5 BTC? It’s possible, but I was reluctant to invest $50 to acquire 5 BTC. Lesson Two: Sacrifices Must Be MadeI had to find past experiences to write this story because I wanted to be accurate about the dates. I was surprised to discover that a $100 hotel booking had been made in 2012. I booked this for one night abroad. It was a trip that I was taking with my girlfriend. Yes, it is not wise to spend so much money on a hotel when you are broke. Looking back, however, it is clear that I could have saved the trip and invested in Bitcoin instead. Or, I could have simply stayed at a cheaper hotel and used the rest to buy BTC. It’s not worth looking back and feeling sorry. But, it is possible to make a sacrifice today that will pay off in the future. Lesson 3: Balance your Investment Portfolio. Every investment book will tell you to not put all your eggs in one basket. This is not a new concept. This is something that I completely forgot about in 2015. Although I had money to invest and a desire to acquire BTC, I decided to only invest in one commodity. My return on investment would have been much higher if I had invested even 20% in BTC. Lesson 4: Don’t chase historical prices. One of the reasons I decided to invest in gold over BTC was because I felt I was buying “cheap” gold. This was compared to the fact that I would have to pay 25x more for bitcoin at that time than I could have paid three years ago. Retrospectively, I realize that the price today is the price right now. Don’t discount an investment because it seems more expensive than it was three years ago. Lesson Five: Be a Part of the Ecosystem. It is much easier to accept and hold bitcoin than it is to buy it for fiat. Why not allow your clients to pay in BTC if you offer goods or services? Don’t make the same mistake as me and cash it out as soon as possible. For now, keep at least a portion of your BTC balance intact. This will increase adoption rates and work in your favor and the community’s long-term. This guest post is by Konstantin Rabin. These opinions are not necessarily those of Bitcoin Magazine or BTC Inc.