***NOTE: I formatted and scheduled this post on Saturday, January 13, 2018. BTC was trading at about $14,100.***
I thought it was 2014, but I went rooting around in my Sent folder and found the email trail. My husband and I seriously considered getting into Bitcoin in November of 2013, and decided against it. It had jumped that month from about $200 to about $600 the week we considered it. As I write this, in January of 2018, a BTC is valued at nearly $15,000. We could have made 24x on our investment!!! Right?!?!? The natural emotional response of most people who looked back on this kind of decision would be deep regret. “The one that got away.” We stand by our decision, and in some ways we’re even more confirmed that we did the smart thing.
The short version is that I had an extended conversation with a good friend of mine who was a Bitcoin miner. She and her husband had been into it for a couple-few years, and they had already made a bunch of money. Technically, kind of literally they had “made money,” in the sense that they were creating new Bitcoins. I already knew what Bitcoin was. Through this conversation I grasped the premise that we could set up an extra computer in the office and, over time, it might generate a tiny amount of this speculative figment called cryptocurrency.
I went home and told my husband about it, which I will discuss three paragraphs from now.
Then I went into a research black hole.
When something ignites my curiosity, there’s no stopping me. I will open two dozen tabs, read 800-page books, speed-listen to podcast episodes on 3x, talk to anyone and everyone to find out what they know, and basically let the topic eat my brain. Sometimes this goes on forever, and other times I find out enough to satisfy me in a few days or hours. In the case of cryptocurrency, it went on my news radar and stayed there in the background.
One of the constant themes my husband and I have in our conversations is “Walking Dead Future vs. Star Trek Future.” Cryptocurrency definitely fell on that track. I can and do research and make my own investments, and if I had wanted to go into Bitcoin alone, I certainly would have. I knew my husband would be interested in it, though, because he’s a numismatist. That means he’s extremely interested in coins. In fact, he makes museum-quality replica hammered coins. Anyone with that level of fascination in the history of money would obviously take note of cryptocurrency. Would we jump on the bandwagon, though?
First, we looked over the extra computer equipment we had sitting around in the office gathering dust. We quickly figured out that it wasn’t robust enough to generate any BTC. If we wanted to do this at a serious level, it would cost us nice flat green American dollars to upgrade our computer setup. There is little short-term risk in this kind of investment, because if we wanted out, we could either use that rig for something else or we could sell it and recoup part of the cost. (Until three years went by and the whole lot of it became laughably obsolete). Digging a little deeper, we learned that people were already dealing with the problem of dispelling the extra heat from their rooms of dedicated Bitcoin machines. Getting started as miners would cost us a lot of real-world money, and we’d be competing in an ever-escalating computing arms race.
At that point, we pivoted. Mining wasn’t a strategy for us, so what if we just speculated and bought some BTC?
The reason we passed was that in 2013, Bitcoin couldn’t buy anything. We couldn’t pay our rent with it. We couldn’t make our car payment with it. We couldn’t buy groceries with it. All we could really do was to save it and hope it was worth more one day, and that at a certain threshold, mainstream retail establishments would start accepting it. To my knowledge, that has not yet happened at even one single business entity where we routinely make transactions.
In 2013, we were still catching up financially. I married a man in recovery from a disastrous divorce settlement, and he married a woman with student loans. (Well, two in a row, actually). We had a guaranteed 16% rate of return from continuing to pay off our credit card debt. We had money in the market that we weren’t even remotely planning to pull out, which is great, because we did well between 2013 and 2018. We had everything to gain from continuing to earn, spend, and invest traditional US dollars, and only a dim future to imagine with Bitcoin.
Then I kept doing research and waving my mental antennae.
There were more potential pitfalls with cryptocurrency than we had realized at first blush. First off, cryptocurrency most likely will be a key player in the AI-flavored, robotic, Space Age near future. The question is, which cryptocurrency? There’s been significant drama among the people who run the Bitcoin show. What if the real winner winds up being Dogecoin? Second, international fiscal policy and potential currency manipulation. Third, the wallets. There was no guarantee that the company we trusted to store our BTC would continue to exist a decade later. I also read stories of people being hacked and robbed, and you know you’re living in a libertarian paradise when there’s no legal enforcement and nothing anyone can or will do about it. Fourth, loss. Lost BTC is already legendary; even Elon Musk has lost some.
Hold that thought, because what Elon Musk does is highly relevant to the way my hubby and I make strategic decisions. Study hard, work hard, create value, create the future. Don’t act like Elon; think like Elon. But I digress.
The funniest thing about cryptocurrency is that so many of the players seem to be worried about that Walking Dead Future I mentioned earlier. Um, what are you going to do with your BTC when the power goes out and stays out? Seriously! Might be better off at that point trading bottle caps.
The thing about the history of money is that it’s gone through a lot of very weird phases. What we’re looking at with the dawn of cryptocurrency is just like the early days, in Colonial America, when people issued their own competing currencies and scrip. Many cultures and eras have produced cool museum artifacts in the form of “money” that is only “worth” anything due to its status as a rare collectible. Exactly, exactly like postage stamps.
Stuff is only worth what someone will pay you for it. Or the use you get out of it.
If you believe in the Walking Dead Future, build your physical stamina, work on your wilderness survival and food preservation skills, and put the bulk of your effort into learning communication and leadership. If my game is Get Allies and your game is Anarchy, I’m going to be your new queen. You may kiss the ring. Guards, deal with him. If you believe in the Star Trek Future, what makes you think money is going to be such a big deal anyway? Part of why my husband and I still deal in ordinary American dollars is that we’ve already lived through the beginning of the Information Age. We remember when long distance phone calls were very expensive, and now they’re virtually free. Pretty much the same thing happened with minimum viable food and clothes. Next it’s going to be electricity, wi-fi, and transportation. This isn’t the post for the full gamut of my futurist predictions, but they’re relevant to why we passed on Bitcoin.
We’re not really skeptical about cryptocurrency. Of course it will be relevant in the future, of course it will! (Which one, though?) Still, we’re glad we didn’t buy in back in 2013. We would have made anywhere from $15,000 to maaaaybe $45,000. We paid off our credit cards and increased our earning power significantly in that time. We also realized far larger gains in US money with our strategy than we would have by using it to speculate on BTC. Also, how would we know when to cash out? What would be the point of a virtual wallet that was only “worth something” as long as we left it in there? What about the transaction costs? What about a false sense of security? If we’d bought BTC four years ago, I’m sure we’d be squabbling right now about whether we’re in a bubble (probably) or whether it’s just a hockey stick. We’ll have a better idea about that in another four years. In the meantime, we’ll continue to focus on building our real-world earning and survival skills, as well as our real-world financial wealth.
I've been working with chronic disorganization, squalor, and hoarding for over 20 years. I'm also a marathon runner who was diagnosed with fibromyalgia and thyroid disease 17 years ago.