How To Safely Hold Bitcoin, Even When It Seems Like The Price Is Out To Get You
It’s hard to ignore the excitement and anxiety surrounding cryptocurrency trading. Every day cryptocurrency news headlines scream “Great NEWS! Wall Street Goes Bitcoin!” followed by “BAD NEWS! The Sky Is Falling”! By December 10th 2017 we reached fever pitch as the first Bitcoin futures began trading on CBOE. Within days the price had rocketed another $4k, finally reaching an all-time high of $20k seven days later.
Across the globe the deafening din of cheering investors could be heard in an earth-shaking wave. But amongst the stupor, a small collective groaned and whimpered, despairing over how they “missed the boat” in the cryptocurrency market.
Suddenly, the demand for digital currencies like Ethereum and Litecoin escalated and social media became a chattering mess of “I’m FOMOing! What crypto should I invest in?” and “You’re all dumb, crypto is crap”. And everyone’s favorite taunt, “See, I told you so”.
Even writing this opening statement, I feel the frenetic energy of December ‘17 pulsing through me as though each manic Crypto soul has climbed deep inside my DNA. Boy, did December sure feel like the cocaine and Cristal fuelled 80’s all over again.
Then, came the crackling napalm blaze of the Cryptopocalypse. Watching fortunes combust, the crypto-curious stood paralyzed debating whether to jump in now, later, or never. Others held their digital fate in trembling hands wondering if they should get out fast and never look back.
But the truth is, price watching is a disease, much akin to shark watching.
We’ve all been to a beach where a shark attack occurred. Or, if not sharks you can insert your own ocean hazard here. Most people without an innate knowledge of the sea, avoid their normal activities in response to the event, but sooner or later we’re all back in the water having a grand old time. And those who choose the mindset of ‘once a shark, always a shark’ will miss out on one of life’s great pleasures.
But this mentality doesn’t just apply to frolicking at the beach. Think about international travel. Would you really postpone a trip just because the exchange rate wasn’t what you wanted it to be? Would you keep an overseas supplier waiting until it was ‘cheap enough’ to pay them? And would you withhold an overseas invoice for 12 months until the exchange rate suited your financial goals? While we accept these fluctuations are less volatile, the principle is the same – the price of a currency is only as ‘good’ or as ‘bad’ as the context you give it.
It’s comparisonitis, and as the saying goes, comparison is the thief of all joy. Except in in Crypto’s case, it’s also the thief of progress. Yours, not theirs.
The Great Currency Paradigm Shift
In this article, The Real Truth about the Bitcoin Bubble, we discussed the real function of Bitcoin as currency, and how the world is rapidly shifting towards using it as such. It’s no secret investing in cryptocurrency has been a lucrative game, but for the average Joe, a one-eyed focus on trading cryptocurrency will only leave you broke. Instead, we turn to Deutsche Bank’s lead strategist Jim Reid for the real reason buying Bitcoin and other virtual currencies is crucial.
Reid recently wrote a revealing paper discussing the end of fiat currency. After its 1980’s disinflationary shock, the fiat-based system advanced to its current state, but he claims that system is now in reverse.
Thanks to various strategies being used to control inflation, like the continuous printing of money, he believes consumers will lose faith in the system as fiat currencies continue to lose their value. This, he says may lead to the end of paper money and all traditional currencies around the globe.
To mitigate the risks of financial collapse, Reid says the use of virtual currencies and their peer-to-peer technology should be promoted around the world. Just like Satoshi Nakamoto’s original vision, Reid concluded that being decentralized, cryptocurrencies cannot be controlled by governments.
“Although the current speculative interest in cryptocurrencies is more to do with Blockchain technology than a loss of faith in paper money, at some point there will likely be some medium of exchange that becomes more universal and a competitor of paper money.”
The Republic of Liberland understands fiat is obsolete. This exciting micronation with 150,000 citizens (and 480,000 in waiting) is getting ready to launch its official currency in 2018, the Liberland Merit, yes, a virtual currency. Up until now, they’ve been happily completing transactions with Ethereum and Bitcoin, and Euro in reserve.
The future is happening now. And just like debit cards, Internet and smartphones, we can move with it, or stomp around like a sulking child, who’s had their saliva soaked blankie removed.
Adoption of a new concept takes time. Much like a first-time traveler experiencing ‘different money’, we're conditioned to think in our own currency paradigms. New currency always makes us a little uneasy until we learn how to use it. Now, it may be a distant memory for you, but think back to the time when you first heard about the one million lira. Surely, it couldn’t be true! Then, you found out it was worth 25 cents, and it broke your brain. But over time you came to understand why, and now these concepts are normal.
Crypto is no different. It is asking us all to challenge our currency paradigms again and adopt a new one. Only the passage of time, and a willingness to understand will allow the shift to occur. It’s the same paradigm shift that occurred when bartering tribes were first offered coins like The Mesopotamian Shekel.
We are now asked to consider the value of things in Satoshi’s. For those who don’t know, this is the smallest digital currency unit, named after Bitcoin’s creator Satoshi Nakamoto. It is 0.00000001 BTC, or one hundred millionth. Just like the relationship between $1USD to $100 million USD, so one Satoshi is to one Bitcoin.
Let’s do a little mental exercise to prime us for this digital currency revolution. We’ll use Starbucks, early adopters of Bitpay as an example. Today, a latte from Starbucks will cost you $2.75 in the US. In Japan it’s 330yen, and over at The Republic Of Cyberspace it’s 0.0003575BTC, or 35750 Satoshi. See how that works? It may be a brain twister right now, but just like the Shekel we’ll get the hang of it.
90% of all Bitcoin wallet holders own 0.1BTC, (… $700USD, or 76698yen, or 279 delicious creamy lattes!) Sure that’s considerably less coffee than you could have ordered in December, and a lot more than you’ll be able to buy as the digital currency exchange rate adjusts. But think about it, it’s the same as someone getting bent out of shape over a 330yen coffee. Numbers mean nothing without context.
Change is hard for everyone, but without it we wouldn’t have motorcars, electricity or little computers that we can hold in our hand. Oh how we laughed at The Jetsons! But change is happening. Millions of consumers, businesses big and small, and entire nations are actively using cryptocurrencies. They’re not looking at price, and they’re not cashing out in the face of some cryptopocalypse. Just like any currency they’re living with the exchange rate. But unlike fiat currency, they’re not paying exorbitant transaction fees, or dealing with accessibility issues. And sooner or later, they won’t need the grubby little fingers of Central Banks fiddling with their cash either.
A World Without Fiat Currency Is Closer Than You Think.
Imagine for a minute you are in a new country with no access to the local cash currency. How would you buy food, shelter, medicine and transport? And before you scoff, consider European colonization and how they imposed their money onto indigenous tribes. Refusal of the new way to trade spelled isolation or death. It’s hardly surprising we live in a world without ‘Colored Rockefellers’.
So when Jim Reid’s prediction is realized, and we no longer trade in fiat currency how will you transact with the world? And how will your kids and descendants ‘trade’ for their essentials, and luxuries? Because when that day comes, just like shells and beads, your fiat cash will be worthless.
Digital poverty is a legitimate concern.
Because, unless you haven’t been listening, the world is already using digital currency en masse. And across the globe the demand for a new way to pay is insurmountable. As Reid from Deutsche Bank says - the end of fiat has begun. This is not some wacky theory waiting for a future start-date. It’s happening now, whether you like it or not.
So you can see, making currency decisions based on investor activities is not wise at this stage of the game. Saving crypto so your family can live a good life is the same as early indigenous people saving those ‘pesky white-man coins’ so they could have some chance at survival through forced cultural appropriation.
But I know what you’re wondering. How do you buy a Bitcoin for $7000 for something that you haven’t yet accepted is going to happen?
The first step is in fact, acceptance. Without it, even the smallest Satoshi just feels like a lead weight on your conscience. It means accepting Bitcoin as your new virtual currency, and letting go of the notion it is some scary-looking stock that only investors are privy to. They have bigger narcissistic lungs to yell with, just ignore them.
The next step is understanding you can, right now interact with the world in digital currency. Over 100,000 businesses accept Bitcoin! And with Cold Storage Coins™ making it safe and easy to buy a coffee with this decentralized digital currency, it’s simple enough to start using it today.
Finally, you don’t have to buy a whole Bitcoin! We must start thinking in Satoshi sized units. Even a mere $500 purchase today is enough to get started with low risk. Think of it like a piggy bank, just drop a little BTC purchase in every week, and when fiat crumbles, you can still pay your power bill.
… And stop focusing on price.
The idea is to use secure Cold Storage Coins™ as your digital piggy bank and save your crypto for that time, when the only way you can buy coffee is with Satoshi. Just save what you can in your digital wallet. And when you make this transition, it means you are selling off bad money that loses value through inflation and counterfeiting, and owning crypto currency that is useful and practical with blockchain technology.
Save Crypto by Saving Crypto: Advice From The Experts
We won’t lie, it takes intestinal fortitude to get into crypto and hold strong when you’re watching the price every day. Have you heard of the term HODL?
HODL is a slang term and Internet meme that is used in the Bitcoin community when referring to keeping, i.e. holding onto the cryptocurrency rather than selling it. It originated in a December 2013 post on the Bitcoin Forum message board by an apparently inebriated user who posted with a typo in the subject, "I AM HODLING.”
It has since been given the backronym - Hold On for Dear Life
So as you step out of your comfort zone, and adjust your blinders to block out things like Futures, mass sell-offs, crypto currency trading and volatile prices, just know you’re in good company. We’re all riding this history-making bull together!
Crypto expert, and well-known influencer Erik Voorhees shares his advice for those new to buying digital currencies like Bitcoin, and anyone still a little green on the whole idea.
Use Coinbase to buy bitcoins, and to sell them – avoid unknown exchangesDo not sell bitcoins when they crash, buy moreDo not panic about missing the boat, you’re not, just stay coolYes, it is likely to crash into free-fall, keep holdingDo not day trade Buy only Bitcoin (BTC) or Ethereum (ETH)Buy it, and forget about itDon’t watch the priceDon’t invest more than you can comfortable loseBe conservative and assume you will lose all of itDo not go into debt to buy it
And of course, we’d like to add; save your digital money in a cold wallet like Cold Storage Coins™ and away from the risks of a hot wallet, or paper wallet. It’s just one less thing to worry about as you navigate your way through the currency paradigm shift and learn about how to manage your new digital currency in a safe, secure way.If you can handle putting $50 savings aside each week, you can handle saving $50 worth of BTC in your Cold Storage Coins™‘digital piggy-bank’. Some days, your $50 of Bitcoin will feel like you won the lottery, and some days it won’t. As Voorhees says, buy it and forget it about it. Be patient. Save it and get on with life.Because when the day comes that blockchain brings banking to its knees, you’ll be glad you could at least buy a bottle of bubbles to celebrate your true grit in helping develop the future of global currency.
- Use Coinbase to buy bitcoins, and to sell them – avoid unknown exchanges
- Do not sell bitcoins when they crash, consider buying more
- Do not panic about missing the boat, you’re not, just stay cool
- Do not day trade Buy only Bitcoin (BTC) or Ethereum (ETH)
- Don’t invest more than you can comfortable lose
- Buy it, and forget about it
- Yes, it is likely to crash into free-fall, keep holding
- Be conservative and assume you will lose all of it
- Don’t watch the price
- Do not go into debt to buy it
And of course, we’d like to add; save your digital money in a cold wallet like Cold Storage Coins™ and away from the risks of a hot wallet, or paper wallet. It’s just one less thing to worry about as you navigate your way through the currency paradigm shift and learn about how to manage your new digital currency in a safe, secure way.
If you can handle putting $50 savings aside each week, you can handle saving $50 worth of BTC in your Cold Storage Coins™‘digital piggy-bank’. Some days, your $50 of Bitcoin will feel like you won the lottery, and some days it won’t. As Voorhees says, buy it and forget it about it. Be patient. Save it and get on with life.Because when the day comes that blockchain brings banking to its knees, you’ll be glad you could at least buy a bottle of bubbles to celebrate your true grit in helping develop the future of global currency.