How To Crypto

I convinced our Facilities Unit Leader to start investing in cryptos a couple days ago, but it took until last night, with a lot of help from Nick, to get his phone adequate reception, re-set his banking password because he’d forgotten it, download the requisite apps, put all that together.  Now he bought some, and he’ll be demobed off this fire before it becomes available to move or trade off-site, and he’s going to call Nick for help with moving it to his new software wallet we helped him install.  

I feel proud of that!  He’s a smart guy, and will be a shrewd steward of his expanding resources, I have no doubt.  Whenever I meet someone I really like, I float the idea of buying some Bitcoin their way, just to do something nice for them.  They can be receptive to the idea or not, but I wish someone would have told me, years ago, what I tell them.  

I didn’t start dabbling — and I mean dabbling, with very little money, having no foresight or plan, frequently yanking my money back out because I got nervous or needed it for something — in Bitcoin until 2017-ish.  Guess what I found out, just the other day, thanks to watching CryptoJack, the best crypto-centric YouTube channel in existence?  I found out that, had I been buying $10 worth of Bitcoin every week for the last five years, I’d be up around 800% on that investment.  Damn, that feels like a missed opportunity backwards, but it’s not gonna be a missed opportunity forward, because guess who’s buying $10 worth of Bitcoin AND Ethereum, every week, from now on?  Me.  I set it up to auto-purchase, in Coinbase.  Coinbase is kind of a rape, with their fees plus how they jack up the price of the crypto you just said you want to buy, but I still use it — it’s still the thing I’m used to.  Nick uses the Cash app, more often.  They sent him a debit card, and he just cashes out like $100 worth of his Bitcoin at a time, on the cash app, and it’s available right away on his debit card.  That’s smart, I’ll probably go that route.  Anyway, back to mind blowing facts, anyone who bought Bitcoin with their $1200 COVID stimulus check from the spring — I didn’t, I still haven’t rendezvoused with that money — would be up about 100% on that.  

So everyone’s confused and off-put about cryptos — that’s why I really appreciated our Facilities guy, well into his 60’s, being willing to figure it out and make it happen, when much younger and techier people aren’t, often — and so I’m just gonna lay out what I know, for your benefit.  I am BY NO MEANS an expert, and I suggest you subscribe to CryptoJack’s YouTube channel and start watching his daily posts, at least, just to start wrapping your head around these ideas.  

First, a plug for CryptoJack — he’s so funny to imitate, Nick and I go around fire camp imitating him all the time.  He’s *SUPER* British, with the more upper class accent —  an adorable nerdy British teddy bear.  “What’s up guys and welcome back to another video,” is his consistent opener.  The best CryptoJack-ism was when he was speculating on Bitcoin going to $1 million: “Go ahead and drop a comment down below if you agree that would be — quite nice.”  This was CryptoJack’s mild mannered allusion to the mansions, pool parties, and Lamborghinis that would be happening for everyone, in that event.  “Quite nice.”  

He’s been at it for a long time, with his channel, and is one of the most trustworthy voices I’ve encountered.  He never “reps” for a new alt-coin coming out, he’s always shooting straight, he takes you through the same thought processes he uses to make trading decisions and market analyses, and he’s obviously done very well for himself.  He lives in the United Arab Emirates.

Okay, second important thing, and here’s what I wish I would have understood years ago.  This is the stock to flow chart for Bitcoin:

The thin solid lines represent the amount of available Bitcoin since its inception as a currency, around 2010, and as you can see more is produced over time by many computers and servers being networked together to “mine” more.  Once the blockchain formula is exhausted, there will never be more Bitcoin mined, because a termination of the ability to do so is built in to the blockchain itself.  What that means is, however the price may fluctuate over time, Bitcoin cannot become hyper inflated due to someone, somewhere, simply making more, as can be done with the US dollar and nearly all fiat currencies.  (“Fiat” means national unit of money — dollar, peso, pound, whatever).  Bitcoin has its own built-in gold standard, if you want to think about it that way.  

The squiggly, thick, jagged rainbow line represents the market price of Bitcoin over time, and the main thing you need to take away from this graph is that, despite short term deviations from the circulating-supply line, the supply and the price have correlated over time to an astonishing degree.  This means we can expect a high degree of correlation in the future.  This means that, despite the much-trumpeted “volatility” of Bitcoin, and cryptos generally — and they are volatile, especially in the alt-coin market, where fluctuations of x-several-thousand are not uncommon ahaha — Bitcoin looks on the verge of going steadily meteoric, to $100k, by the end of this year or next year, and reaching $1 million by around 2025 or 2026.  And what would that be, according to CryptoJack?  “Quite nice.”  It would be quite nice.

For my fellow USD-centric Americans, you can think about Bitcoin (and perhaps to a lesser degree, although we’ll see, Ethereum) relative to other coins the same, vague, mostly uninformed way you think about the dollar versus other currencies — notably, we don’t.  I mean, we’re ambiently aware that the British pound is worth, whatever, like 2+ of our dollars, and the Mexican Peso is worth, like, some of our pocket change, and I’ve become aware that prices look higher in Australian money than in dollar money because I like to buy Australian dresses by Spell and the Gypsy Collective; the main point being, we don’t think about it much at all.  It’s just, you know, the dollar.  So don’t assume that you have to understand everything, or even anything, about blockchain technology, mining, servers, exchanges, markets, platforms, or hardly anything at all, to still stand a real chance at becoming a Bitcoin millionaire here in a few years.  

Coinbase (where most people go to initially buy their Bitcoin etc.) is no more difficult to download on your phone and set up than, for instance, PayPal.  You make an account, you link it to your bank, you convert dollars to cryptos or cryptos back to dollars whenever you decide — it’s entirely liquid.  You can buy some Bitcoin today and then convert back to dollars next week, if you get buyer’s remorse or have something unexpected come up.  It’s so much easier than the average person assumes.

Now, here’s one thing that is different, and that you need to know: once you buy your Bitcoin or other crypto, you need to move it to a secure wallet.  Cryptos have a public key and a private key, which (stay with me) is no more complicated than your user name and password that you use to log onto anything, anywhere.  Your user name is an example of a public key, and your password is an example of your private key.  When you buy cryptos on an exchange, such as Coinbase, they can “live” there and probably be okay?, forever?, but this is the Wild West of money.  Everyone lost their money on one of the more fledgling exchanges, several years ago, because the guy who started the exchange died unexpectedly and no one knew his password.  Literally.  That happened.  Coinbase seems to be a little more polished than that, but I still wouldn’t leave lots of money in there.  

I recommend a software wallet called Exodus, accessible from your laptop, desktop, and phone.  Again, it’s just an app you download and set up, like you’d do with anything else.  There are several kinds of wallets: software, hardware (like Trezor, and we also have some of those in my family), and paper.  I don’t know a goddamn thing about paper wallets, and I’ve had a frustrating time trying to help my dad with a few projects involving paper wallets, and I don’t trust that process because I don’t understand it, so I can’t say much there.  I guess it’s, like, the safest of the safe?, in the event of some total societal and tech catastrophe (my dad’s ultimate fantasy/nightmare, it’s hard to tell which, sometimes) because it’s not a digital thing at all that could be destroyed by, you know, an EMP — and I’ve helped my dad make “faraday cages” for hardware wallets, so I kind of know about that — but I’m just hard pressed to clearly visualize this situation in which everything digital is so fucked that a paper crypto wallet wins the day, and yet I’m able to still do anything with the digital money represented by the paper wallet…yeah, I don’t know.  

Hardware wallets, like Trezor, are just a thing you buy on Amazon or direct from the company, follow instructions, set up, and then you gotta plug it in to move stuff and keep it in a safe place, etc. and so forth.  I’m obviously, you know, living out of a trailer right now in the middle of a field in the middle of nowhere, so my life organization is such that a software wallet is my go-to.  So I recommend Exodus for that, I really like it, and now I’ll talk about moving money.  

When you send cryptos from one place to another — from an exchange to your wallet, or from your wallet to someone else’s wallet, for instance — the receiving wallet generates a long code, you copy/paste this code into the source exchange or source wallet, type in the amount you want, hit send, and that’s it.  There may be a fee of a few pennies, maybe up to a dollar or two depending on the amount.  This fee goes to pay the miners, the people who set up networked computers to mine the Bitcoin.  And interestingly, every transaction is recorded on a public and decentralized (therefore entirely secure, un-fakeable, unchangeable) ledger.  The ledger is anonymous, so no one knows who sent what, or from where, or to where, but the transaction itself is on the ledger.  That’s how we know that there are “whales” in this ocean.  A Bitcoin whale is some person or entity who holds millions and billions of dollars (or other fiat currency) worth of Bitcoin, and moves it.  It shift the whole market, in that case — several billion dollars moving from one place to another, anonymously but definitely.  And imagine — those transactions of several billion dollars-worth cost only pennies, dollars at most, for the sender, and are nearly instantaneous.  

This has several ramifications that are mind-blowing to those of us accustomed to thinking about the movement of money in terms of traditional banks, or even wiring services.  I can essentially “text” someone, in another part of the country or another part of the world, money in any amount, to include the entire GDP of some nations, for virtually free, virtually instantly, and with total anonymity.  I mean, just let that settle in.  In fact, I can share my Bitcoin wallet address with you here: 

bc1qg5ltxha89stdejqyft5suhar56pzc0c9w8alwr

And YOU can send ME Bitcoin!  You can’t rob me or hack me or get any of my money from me or know where I am, where I bank, etc. with that address, but I can publicly share it with impunity (and hey, maybe someone wants to donate to my millionaire-by-20205 cause) — isn’t that cool?  And here’s another reason why the Cash app with debit card system Nick figured out is especially great for traveling — even if someone stole his wallet, they couldn’t drain that account.  All they could get is whatever he converted from crypto to fiat before-hand, and the rest is locked up.  So, many people publicly post their wallet addresses for donations and payments, and even if they change banks or change cities or change the nation they live in, it still works.  

The dangerous volatility you’d probably heard about, and been scared away by, mostly affects the alt-coins and tokens (and don’t ask me what the difference between a crypto, an alt-coin, and a token is, because I don’t know and also don’t care).  The initial offering of a new alt-coin — and they’re always accompanied by a website, a really confusing write-up on what that one does, how it’s specialized, why it’s different, which I also don’t understand or really care to — is usually accompanied by some kind of offer, like 30% extra value on your purchase until they reach their ICO (initial coin offering), the total amount initial investors need to purchase to launch the coin in the first place.  These coins aren’t available on exchanges like Coinbase yet, which deals in more established coins, and you have to actually buy them on the site and wait for the coin to launch before transferring it to your wallet.  If it doesn’t attract enough initial investment to launch, I guess you’re just out that money — I haven’t played with that much.  I did just buy $150 worth of Bidao, a new token that has not yet reached ICO, to experiment.  

The appeal of speculating on this level is that these new alt-coins and tokens CAN “pump” by thousands or even tens of thousands of a percent, at first, and then most of them flatline after that.  ChainLink, shortened to Link in common parlance, is an example of a coin that pumped, dropped, and then resurged over time, and Nick has made about $600 in the last month or two by speculating on Link.  

So for the intermediate to advanced level crypto nerd, these ICO’s and alt coins can be a huge return on even very small investments, but there are so many of them, and they are so unpredictable, that you’re really on your own there.  Probably the best strategy is to simply buy like $100 worth of a bunch of different emerging and notable alt-coins, and then pay close attention.  These can pump and then flatline in a matter of minutes, so you’d either have to make watching them your full-time job or get really good at setting buy and sell orders.  These buy and sell orders do just what it sounds like — an automated transaction according to parameters you set in advance — but with volatility on that level, you’re either going to set modest parameters and risk FOMO in the event of a pump, or set meteoric parameters and risk most of your transactions not meeting the criteria to go through.  

So for most of us — for the average person — this can all be condensed down to: just buy some Bitcoin, put it in a wallet, and don’t fuck with it.  And keep buying more, as you can afford to, but only with your truly expendable income; like I said, you’d be up 800% if you’d been hodling $10/week for the last five years.  It’s called “hodling”, not holding, which stands for “hold on for dear life”, rather than speculating, buying, and selling, moving stuff around.  Bitcoin is the honey badger of cryptos, with a very consistently muscular trend upwards despite its jaggedy moments, per that stock to flow chart I shared.  Nick speculates in the alt-coin market but always returns his profits to Bitcoin, for safe keeping.  

I see Bitcoin this way: you know how you go the airport, and you’re walking to your gate, and you come up on that horizontal accelerated walkway thing?  You can go around it and keep walking at your normal brisk pace, or you can step on to the walkway and get there faster, while still walking.  Converting US dollars to Bitcoin is like putting your money on that walkway.  If it seems scary, I’d invite you to consider the problems with fiat currency, the dollar specifically, and the ongoing collapse of world banks despite numerous bail outs.  I’m not saying Bitcoin isn’t a risk, but we probably have a lot more faith in the dollar than is actually warranted at this point in time.  It merits at least some skepticism, let’s say, given our debt-based, upside down economy.  

What this means for me is, I need most of my summer earnings to accomplish our expensive move to Hawaii, at the end of the fire season, but I’m willing to store quite a lot of it in Bitcoin in the meantime, because the chance of that airport walkway going faster than my normal pace is higher than the chance of it going slower.  I expect to have more money than what I’ve actually earned, in several months, because I’m willing to store some of it in Bitcoin form, but I’m not storing all of it that way because if I’m wrong, I still need to have some money.  Meanwhile, Nick is speculating more actively, optimizing our earnings to an even higher degree despite the predictable fluctuations of the market and his guesswork, and always returning those profits to Bitcoin form, for hodling.  

I understand gold and silver are both robust forms of wealth storage, right now, and it’s less that the price of silver is expected to go up, per se, and more that it’s been artificially suppressed for a long time.  Just wanted to mention that.  

Another couple of things: banks and the government responded to the rise of the crypto market first by ignoring it, then by deriding it, then with threats (Jaime Dimon of JP Morgan said he’d fire any employee caught speculating in cryptos.  Wow, North Korea much? And then, like a douchebag, came out with his own crypto shortly thereafter, called the JPM, or JP Morgan coin.  It flopped, don’t recommend) and finally, with participation.  That’s who these “whales” are, more likely than not.  With my last job, the one I got laid off of for the fake pandemic, my retirement package (what a shit show, whole ‘nother story) was managed by a private firm that, according to their website, deals in cryptos as part of their diversified portfolio management strategy.  This is a big deal, a real example of crypto markets working their way into the financial mainstream.  I called, because I was wondering if I could tell them to just go all in on cryptos for me — I wanted to just keep that money for myself and put it in cryptos directly, but the employer wouldn’t let me — and they said diversification into cryptos wasn’t available for individual clients, only commercial accounts. 

In any case, banks are obviously threatened by the rise of cryptos.  In a world where anonymous individuals can send money back and forth, even in huge amounts, instantaneously and with no middle man, and store wealth more securely and with a higher expectation of return, and exchange cryptos for fiat and vice versa immediately, privately, via apps, without ever walking into a building or signing up for an account — it’s just a different landscape.  Those poor old banks!  Whatever, fuck ‘em.  

There’s nothing makes me happier than seeing something become obsolete that needs to become obsolete.  When Victoria’s Secret first came out with front-zip sports bras, I was like BAM!  BURN!!  Burn, all you sports bra manufacturers who tyrannized us for decades with your pull over designs, your clip in the back designs!  Why did it take this long!  How hard is it to figure out that a really tight, binding garment that goes over your boobs and holds them in is going to be really hard to get into and out of, if it clips in the back?  Now a lot of other brands of sports bras zip or clip in the front, and I’m like, “That’s right.  Line up for the scraps, you dogs.”

Same thing with Uber.  Some of these airports, you know, only allowing traditional taxis because the taxi union or whatever demanded that the city protect their obsolete business model from the muscular encroachment of an observably 1000%  better way of doing things — come on.  The entire reason for driving drunk is because taxis suck so much.  You call, the person who answers is obviously juggling like four other items of attention, they say 20 minutes, you wait 40 minutes, they never arrive, and by that time you’re cold enough and sober enough that you just drive your own ass home.  Ridiculous.  Uber and Lyft are market epiphanies, and no one should lay down on those train tracks.  

Air BnB: same thing.  Some neighborhoods make it illegal to Air BnB an extra room in your own home, that you legally own.  North Korea much!!!  This type of thing enrages me.  Like I’ve said, I can’t stand a bully.  So for me, cryptos represent a wonderful new evolution of money.  They have problems, they are associated with black market transactions for obvious reasons, they can be volatile, they don’t seem as tangible, but I’ll take all those risks and weigh them against the entirety of human history, where your money was controlled by your government.  This is the first time that’s not true, and the ramifications have not even begun to play out.  The world has not even begun to crypto.  And I don’t lose anything by encouraging as many people as possible, as want to, to start investing in some Bitcoin now, if they haven’t already.  Because at some point, the FOMO will set in, everyone will try to rush to get Bitcoin, the price will be driven up, and we’ll all be glad we set up wallets early and got strapped in for the ride.  

If you’re interested in coming along, here’s how:

  1. Download Coinbase or Cash apps to buy Bitcoin, and Exodus for storage.
  2. Link to your bank and figure out how to buy some.  You can buy in any increment.
  3. Wait the eight days or whatever — exchanges *get* it for you, they don’t *have* it, so there’s a wait.
  4. When it’s available to move, figure out how to move it to your Exodus wallet.
  5. Rinse and repeat.                                        

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