The strategy for bitcoin: Buy and hold for at least 4 years. You will be rewarded for your low time preference.

The strategy for alts: Hope you get rich quick timing the market, more than likely get rekt.

At this point I don't even think about bitcoin in terms of USD. I am fully onto the "sat standard" as they call it. My goal is to accumulate sats, not to make USD. When you have this mindset, and the price drops 10-20%, you understand that you haven't actually lost anything. You still have the same number of sats as you did before the dip. There are two very different mindset between bitcoiners and those that play in the altcoin casino in an effort cash out in USD.

I also see doge has dropped over 7 cents in the last half hour.

posted by brutus161

I've been using doge to my advantage for quick gains, and using those gains to buy bitcoin

This is a strategy I can support, just be careful. It's not for me, but good for those that do it successfully. 

posted by justincredible

The strategy for bitcoin: Buy and hold for at least 4 years. You will be rewarded for your low time preference.

The strategy for alts: Hope you get rich quick timing the market, more than likely get rekt.

At this point I don't even think about bitcoin in terms of USD. I am fully onto the "sat standard" as they call it. My goal is to accumulate sats, not to make USD. When you have this mindset, and the price drops 10-20%, you understand that you haven't actually lost anything. You still have the same number of sats as you did before the dip. There are two very different mindset between bitcoiners and those that play in the altcoin casino in an effort cash out in USD.

I also see doge has dropped over 7 cents in the last half hour.

I agree. That's why my alt investments are small enough to write off, but the gains are large enough to continue to throw into bitcoin for the long haul. It keeps adding up. 

From an email I just got:

Liftoff: Show me the incentives and I'll show you the outcome.

Charlie Munger famously said, “show me the incentives and I’ll show you the outcome.”

In other words, incentives are a powerful force that drive nearly all human behavior. 

Incentives are why capitalism works and why socialism can’t work.

Let’s examine the incentives underlying Bitcoin and its path to adoption. 

For Bitcoin to reach global dominance, it must inspire a vibrant ecosystem of allies. 

Bitcoin needs allies, the stronger the better. Fortunately, Bitcoin is attracting new users at an unprecedented rate. People adopt Bitcoin for many reasons, including to:

• Get wealthy
• Stay wealthy
• Preserve freedom
• Make easy global payments 
• Help repair a broken monetary system
• Increase prosperity in the world

Once someone adopts Bitcoin they are incentivized to defend, improve and grow the network. And everyone who joins the network contributes to the network as a whole. 

In other words, Bitcoin is as strong as its strongest link.

How are Bitcoin’s incentives playing out in the real world?

Many investors buy Bitcoin to generate wealth. No surprise there: it’s the best performing asset of the last decade, up 500% in the last year, and currently ~60,000 people are buying Bitcoin for the first time every day. 

In this macroeconomic environment, governments are forced to devalue their currency and many corporations cannot keep up. Savvy corporations realize this and are buying Bitcoin to protect their melting balance sheets. 

In fact, corporations like Tesla, Square, and Microstrategy have already acquired billions in Bitcoin. Currently, 6% of the Bitcoin supply is owned by corporations, and the FAANG companies haven’t started buying yet…

People and corporations are incentivized to go where they’re treated best. 

• Government officials realize this and are using Bitcoin as a tool to attract talent and pools of capital. 
• Kentucky offers tax breaks to attract Bitcoin miners. 
• Wyoming offers a new banking license that lures Bitcoin banks and businesses. 
• Miami has rebranded as a “Bitcoin and tech hub,” offering favorable laws, low taxes, and exploring ways to pay their employees in Bitcoin. 

It starts with local jurisdictions but eventually nation states will be incentivized to do the same. And when governments compete the individual benefits.

Pensions and insurance companies need Bitcoin to generate a positive yield.

With mounting unfunded liabilities, $17T in negative-yielding bonds, and few options for positive yield, money managers will be forced to buy Bitcoin. It’s their only hope. 

Bitcoiners adopt Bitcoin because it’s the right thing to do.

The current system is not working for the vast majority of people. Bitcoin shifts power from the rent-seeking incumbents to the individual. 

Bitcoin levels the playing field. Anyone with an internet connection can benefit from its price appreciation, whether you're a billionaire or you sell coconuts in Costa Rica. 

Bitcoiners realize the positive impact of Bitcoin which inspires them to ensure its success

Corporations and the major banks used to dismiss Bitcoin. 

However, in the last year, we’ve seen almost all of them becoming Bitcoin bulls. Why? 

Because they realized it’s in their best interest to adopt Bitcoin to generate revenue and protect market share. Makes sense.

Bitcoin aligns incentives unlike anything before.

Bitcoin is attracting everyone from billionaires and corporations to middle-class wage earners and the unbanked. After storing some wealth in Bitcoin, they have an incentive to support the Bitcoin network. 

It’s a virtuous cycle with each new user making the network stronger and more valuable. Bitcoin aligns incentives unlike anything in human history.

Show me the incentives and I’ll show you the outcome.

Justin, how many satoshis do you typically buy at a time?

posted by ernest_t_bass

Justin, how many satoshis do you typically buy at a time?

I buy X amount every day, automated through an exchange. This is called dollar cost averaging, or DCA. It just means you're buying at set intervals regardless of the price. You'll be buying the dips and peaks, which is a much easier strategy than trying to time and just buy the dips. It's basically a set it and forget it situation. Every couple weeks I check my balance to see how many sats I have (nunya).

I'll also instant buy in chunks when I've got additional money to spend that isn't budgeted for bitcoin already.

Depending on the service, I think you can buy as little as $1 at a time (1800 sats right now). I believe the CashApp allows that. The service I use (Swan) only lets you instant buy $100 or more at a time. You can DCA far less than that, though.

If you want to earn sats without actually paying for them directly:

https://lolli.com/share/zeSwjk9AUo

I've earned 50k sats over the last few months just buying food and medication for our dogs on chewy.com. This is basically like Rakuten cash back, but for sats instead of dollars.

$20 worth every 2 weeks here. I was soooo close to fully cashing out during the last dip. Always said once it hits X I'll bounce and buy back in. Glad I didn't. 

posted by Automatik

$20 worth every 2 weeks here. I was soooo close to fully cashing out during the last dip. Always said once it hits X I'll bounce and buy back in. Glad I didn't. 

Dumb it down for me justincredible...

Say I put $500 or a $1000 in for Bitcoin....just let it sit. What do you envision it looking like in 1 year? 5 years?

What would recommend a noob middle class Joe like me doing if I wanted to invest/dabble?

If you answer with more than 2 words/terms I don’t understand I will def neg you...thanks

I can dumb it down to three simple words: number go up.

"Number go up" is a stupid meme within the bitcoin community (NgU Technology), but it hasn't been wrong yet.

See how it kinda peaks every 4 years? This is due to the pre-programmed adjustment in monetary policy, when the amount of bitcoin mined in each new block is halved. 

Looking at a chart (it's kinda old, from last Feb) that shows the actual halvings, you can see what the price does within each epoch (4 year halving period). Number go up.

This doesn't mean something can't happen that would cause a shock to the price, but the monetary policy is set in stone (code) and will not change. But, for all intents and purposes, the price is essentially programmed to go up forever as each new cycle brings new eyes to it, while the available new supply is slashed in half. Increase in demand + decrease in supply = number go up.

People often ask, "what's stopping them from changing the monetary policy? What if they just doubled the number to 42million?" To that I say, I'm stopping them. I run a full node in my house (it means I'm verifying every block mined is valid) and would not run bitcoin software that changed anything about the monetary policy. That would lead to a fork of bitcoin, similar to how it forked into Bitcoin Cash, Bitcoin SV, etc. It would eventually be left in the dustbin of society while 21m bitcoin rolls on.

So, to your question. If you bought $500 today (we're at the early stages of an epic bull run, IMO) I think in a year the usd denominated price would very likely be higher, but I do expect a "crash" from whatever the peak is in this cycle (we haven't hit that peak yet, it'll be 6-figures). In 5 years the usd denominated price would almost certainly be higher. While it's not a guarantee, I wouldn't bet against it being higher.

My recommendation is always to DCA (see previous posts) a small amount each day/week, and always only with money you're okay losing. A $500-1000 instant buy to start out is also a great way to get exposure. I only ask that you put in the time to do a deeper dive into why it matters once you do have skin in the game. I think the book Boogie mentioned earlier, The Bitcoin Standard, is a great place to start.

A big concern I get when trying to talk to people about bitcoin is, what if the government just bans it? Sure. They could. And some have tried. But, Satoshi being the genius that they were, whoever they were, programmed in game theory that makes it highly unlikely at this point. The time to kill bitcoin was 10 years ago. It's essentially too late at this point.

https://danheld.substack.com/p/can-governments-kill-bitcoin

My personal opinion is that bitcoin is inevitable (it will be the world reserve currency) and governments realize this. Some nation states are already accumulating. I've hear rumor that a lot of individuals (low-level, at least) within the federal reserve are already stacking sats. Cities and states in the US are starting to get on board (see Miami, Jackson, TN, Wyoming, Kentucky). Eventually there will be cities/states with their own sovereign wealth funds, i.e. a fat stack of sats. 

Governments are going to stop trying to ban it, and start trying to accumulate it. My plan is to front-run them as much as I possibly can.

Will Ohio Chatter be it's own governing body?

posted by ernest_t_bass

Will Ohio Chatter be it's own governing body?

Yes, and I will rule with an iron fist.

Pressure bust pipes.

New York Giants, Grayscale Investments announce first (*Bitcoin) partnership of an NFL team#Bitcoin in sports will be normalized. pic.twitter.com/pF5fcULeQb

— Okung 💯 (@RussellOkung) May 5, 2021

John Dalby, the Chief Financial Officer of Bridgewater Associates, the world's largest hedge fund, just joined the #Bitcoin focused NYDIG as CFO.

— Documenting Bitcoin 🟩 (@DocumentingBTC) May 7, 2021

Good essay here on Bitcoin being a mechanism for time in and of itself. Little known fact, the "blockchain" was initially called the "time chain."

https://dergigi.com/2021/01/14/bitcoin-is-time/

I actually listened to it here: https://bitcoinaudible.com/bitcoin-is-time/

It's worth the time to listen/read if you have any interest in bitcoin. 

I've been finding myself in Youtube blackholes involving mining. Large and small scale operations. Super interesting.

posted by Automatik

I've been finding myself in Youtube blackholes involving mining. Large and small scale operations. Super interesting.

Yeah, I love learning more about mining.

Check out Great American Mining and Upstream Data. Two US based operations, I believe both are turning flared natural gas into bitcoin. Fucking fascinating.

What is the most dumbed down version of "mining" you can give, Justin?

Mining is the process of turning energy into bitcoin.

It's essentially a lottery, all miners are competing to find an astronomically large random number. Once a miner has found it, and can prove it (through cryptography), it is rewarded with all transaction fees (from users "spending" their bitcoin that get added to this specific block) as well as the coinbase. The coinbase is the newly minted bitcoin (currently 6.25 per newly mined block, will split to 3.25 at the next halving in 2024). The miner now has the option to sell the bitcoin they just earned to cover energy costs or keep it. The percentages of miners keeping their bitcoin is increasing, meaning a lot of the new bitcoin being added to the supply aren't actually for sale.

This is called proof-of-work, which just means you can prove you expended energy in finding the block. This is what secures the bitcoin network. The more energy there is being used by the network, the more secure and harder to "hack" it is, because the cost to try to take over the network would be unaffordable. Your best bet would be to join in and start accumulating. Game theory.

This helpful?

posted by justincredible

Yeah, I love learning more about mining.

Check out Great American Mining and Upstream Data. Two US based operations, I believe both are turning flared natural gas into bitcoin. Fucking fascinating.

I'll check it.

Assuming you've seen the lunatic nerds with setups in their houses/apartments?

posted by Automatik

I'll check it.

Assuming you've seen the lunatic nerds with setups in their houses/apartments?

I'd love to start mining myself, but finding an affordable ASIC is impossible. The noise/heat is another issue, but I've seen some cool innovations in that front.

You can literally turn bitcoin mining into heat and hot water for your house.

https://heatminer.io/de/beispielseite/