I made a big investment several years ago.
It was one I didn’t take lightly. I bothered to do enormous amounts of research. What made it hard was there was a taboo nature attached to my investment choice.
Buying any form of internet money was considered wildly stupid, irresponsible, and making an unnecessary bet. My focus wasn’t on the investment though. It was on the problem being solved.
Sending money around the internet wasn’t easy. When I had to pay friends in other countries it was a giant pain in the ass. The internet made everything easier, except the world of finance which I worked in.
Dinosaur organizations with mainframes from the 80s dominated. They used their green screens to send money all over the world. I thought to myself there must be a better way.
The 2008 financial crisis was not kind to me. I nearly lost everything in a matter of weeks. As a punk 20 year old with a drivers license, I had no idea about the tsunami that came fast. The local government gave out stimulus checks. I remember getting $900 for free and thinking something’s not right here.
I took the money and spent it like a good boy (or did I save it — can’t remember). This event in human history taught me to question money and financial markets. A mentor of mine forced me to read books written by investing legends like Warren Buffett.
Investing was clearly a mental game.
Around the same time, in a computer lab somewhere in the world, a man named Satoshi was writing code. His little project was nothing new. It used cryptography which had been used many times before. Internet money wasn’t a new concept. Everybody tried to create digital money. What profit-seeking corporation wouldn’t want to have its own money?
Satoshi wasn’t doing it for profit.
The clue to Satoshi’s dream lied in the first block that was mined on the blockchain technology he invented. It read “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” Clearly Satoshi saw a problem. Unlike most of the world’s population he was idealistic enough to think he could fix the problem.
Bailouts for banks pissed Satoshi off.
Bailouts meant money printing. Money printing by governments leads to companies that should go bankrupt getting saved, stimulus checks and reckless fiscal policy. Creating money out of thin air meant the rich got access to the money first, while poor people were left out in the cold.
Money printing caused, and still causes, inequality amongst humans.
This frustration of inequality led to the Occupy Wall Street Movement. The people of America were the first to break. They had enough of investment banks treating financial markets like a casino.
Their protests went nowhere, unfortunately. The banks got bailed out because that was the only option. Satoshi’s blockchain invention operated behind closed doors. A few, known as the Cypherpunks, experimented with the currency for the internet he created. It was an interesting experiment. Nobody thought it would go anywhere.
Several years later I came across Satoshi’s experiment. It seemed like a noble cause but there was just no way governments would let his invention succeed. Satoshi was two steps ahead. He hid his identity and made his blockchain something that could never be shut down.
To shut down his creation meant shutting down the internet.
Governments tried to ban his invention though. China was the first. They thought they succeeded. Then its citizens decided to move trading digital currencies to “over the counter.” (This term means transacting face to face in a public place or secure office.)
The dream was to have money be borderless. All you needed was to remember your 12-word passcode and you could go anywhere in the world with your money. Cash and gold were different. You couldn’t go in and out of an airport with cash or gold and not be questioned. There were limits.
Satoshi’s invention had no limits. His vision was off-limits to small thinkers.
Those who took over Satoshi’s invention let greed get the best of them. Satoshi understood greed — it led to the 2008 financial crisis.
Satoshi planned for greed, too. Several founding members of his technology attempted to change the code he had created (known as forking). Satoshi built in consensus. He made it so 95% of the community had to agree for the change to become effective, knowing humans would never agree to do it if they understood what he’d truly created.
The “fork experiment” to change his code failed several times. Greed was proven to be an inferior force to his code.
I discovered Satoshi’s experiment a few years in. I was instantly fascinated with the idea of what he built. I had my doubts about the technology surviving. Still, I began investing money in the technology. The more I looked into it the more I understood: this was Web 3.0.
Ownership on the internet was a problem. Satoshi’s technology was a bold move to shift the power back to the internet user. The question was simple:
What if the users owned the network?
What if the users who worked on building and maintaining the network got all the rewards, not a few fat cat business empires?
It took me a while to understand. Internet money was one thing. Changing how humans got paid, transacted, and owned the work they created was a revolutionary concept. Money controls society. What if you could change money to change society for the better? I was infinitely fascinated.
2017 came around. The hype bubble around internet money exploded. Even the lunch lady was talking about what Satoshi created. Tulipmania had set in. The invention was still an infant, not ready to be exploited by adults in suits.
The price of Satoshi’s dream plummeted. Everybody called me stupid for investing. I endured two years of people telling me how dumb I was, especially because I worked in a bank and should have known better.
Ignorance was bliss.
I ignored everybody’s advice. They weren’t qualified. They didn’t know what this was. I spent hours and hours getting my head around mining, block rewards, competitors, new types of networks that were emerging. I went to meetups. I heard from businesses who accepted this strange form of internet money. I tried the test ATMs that allowed you to buy and sell this internet money.
Still, people said “you’re a sucker. Haven’t you learned your lesson?” The insults hurt.
The critics were real. They were temporarily right.
In 2020, the problem Satoshi solved finally had a use case. Interest rates went to zero like he predicted. A random health crisis became the excuse for the collapse of financial markets. Returns on assets like bonds plummeted — even paying negative interest rates in some countries.
Savers were smacked in the face the hardest. Interest payable on bank accounts went to virtually nothing. Everyday people who maybe had never invested in financial assets got to see the problem now, too.
Where do I put my money? became the question of 2020.
When the health crisis struck, governments printed trillions of dollars as Satoshi predicted. In 2008 the US government printed $1.3 trillion. In 2020, they printed $3 trillion with trillions more needed. No inflation was felt.
All the extra money ended up in the stock market, driving stock prices to new highs — despite record unemployment, a collapse in global GDP, an out of control health crisis, and oil prices going negative.
Rather than measure inflation the old way — through the consumer price index — CEOs of publicly-traded tech companies started saying this:
“What if inflation was measured in stock prices?”
A light bulb exploded in my head. When you have more money than you need, you don’t buy 6-figures worth of pizza. You buy stocks or property.
That’s why stock prices were going up when the economic reality was going to be down the toilet for a year or two.
2020 was the year internet money changed for good. PayPal and Square got into it. Visa got into it. JP Morgan backflipped and admitted it was an important asset class. Fidelity Investments with $3 trillion under management got into it. Citibank came out with bold predictions like “each coin will be worth $300,000 by the end of 2021.” The CEO of the world’s largest asset manager, Black Rock, said it’s here to stay.
Famous investors like Paul Tudor Jones, Stan Druckenmiller, and Jim Cramer all decided to invest.
Ex-Goldman Sachs banker, Raoul Pal, went all-in and placed 98% of his available cash into internet money.
I have made one good investment in my lifetime: Bitcoin.
People continually tell me I’m stupid because of my decision. Internet trolls leave harsh comments. Folks on twitter call me stupid.
Meanwhile, after work I keep spending 1–2 hours a day understanding more about Web 3.0, where bitcoin will be the store of value and Ethereum will be the layer on top that everything from apps to networks is built on.
I spend a good amount of time reading about people who have vastly different opinions to my own. While I know a bit about the blockchain space, I don’t know everything. Things can change. New technologies can be created.
Bitcoin is like anything in life — you have to take the time to learn about it, then you will understand the problem it solves and how to value it.
I started buying Bitcoin in the first few years of its life.
The first coin I ever got my hands on was worth $100. Now one coin is worth $18,000 USD.
My original investment in Bitcoin has gone up 17,900%.
Bitcoin is the best performing asset of the last decade and was up 170% in 2020. It pays to do your own research about finance and the future of money.
Bitcoin and Ethereum are only getting started. Because real money that is governed by code rather than greedy humans is needed more than ever. It’s now obvious cryptocurrency is mainstream — and it’s still early.
When you take the time to make one good investment and back your decision despite all the critics, you can set yourself up for life and never work a normal job again if you choose.
It pays you to have a Web 3.0 financial education.
This article is for informational purposes only, it should not be considered Financial or Legal Advice. Consult a financial professional before making any major financial decisions.