Bitcoin is dead as roadkill, again. The government of China shut down the miners. Elon Musk is a Doge Pump and Dumper and hates proof of work. The price has fallen > 50% . Notify the bitcoin obituaries. The fear, uncertainty, and doubt are daunting,
Yet one thing remains constant: The blocks keep getting mined. Granted, they are being mined a little slower. Instead of 10 minutes, the average block comes in at about 12 minutes. It’s almost a 20% increase in the time it takes to mine blocks. What will Bitcoiners do? We’ll wait. The difficulty adjustment happens every fortnight or 2016 blocks. How many of the China Ban FUDsters know this important piece of information?
The game theoretical design of bitcoin protects the protocol from countries banning it. Few understand this and it shows. This causes the price to ‘crash.’ Let’s be honest, we all knew this would happen. Too much dumb money came in. Maybe that’s a little harsh, but let’s be honest: What do all the neophyte bitcoin noobs know about bitcoin? They know what the media tells them. I would venture to say that most of the “crypto” people don’t know how to use PGP. I didn’t know how to use PGP when I first got into Bitcoin. I never even heard about it or cryptography for that matter. I also know that this rabbit hole runs much deeper. I am still not 100% comfortable with Taproot. I feel like I sorta get it. I use lightning all the time, but I have a lot more to learn about it.
Therefore, the first rule about bitcoin is : Stay Humble.
The second rule about bitcoin is: Stack sats.
Stay humble because you cannot possibly know everything about bitcoin unless your name is Adam Back. The future is uncertain. The price of bitcoin will crash. It will pump, presumably forever, but there is a non-zero percent chance that blocks will stop being mined one day. Humanity once forgot how to make concrete. If we forget how to produce electricity, bitcoin will probably stop working. It’s not impossible, but I’m not betting on this.
Stack sats because you are saving for your future self. You should not be concerned with the day to day price. Take a long term view. There will be less than 2.1 Quadrillion satoshis ever produced. This makes satoshis the only objective measurement of value. The supply of currency decreed by nation states expands forever. Bitcoin is a monetary network that provides a fixed supply schedule. It’s a battle between absolute mathematical scarcity versus never-ending money printing. This is why Number Go Up. They keep making more and more dollars, but less and less bitcoin.
Let’s compare these two systems. Imagine you started saving $200 a month, but you don’t want to put all your eggs in one basket because… Well because that’s what everyone has told you your whole life. I’m sure everyone that told you that is super rich for following this advice, right? Nevertheless, you start stacking $100.00 with of sats a year ago. You also sock away $100.00 into your savings account every month.
Over the last year, your savings account allows you to buy $1200.12 worth of stuff. Your bitcoin wallet allows you to buy $2425.00 worth of stuff. This is over 100% return in a year’s time. Well yeah, but you might ask what if it crashes 50%?
It did. Dollar Cost averaging Hodlers are still up over 100%.
You also saved $100 per month in a bank of A… state savings account which pays 0.01%. Interest. Here is what your bank statement says you have to spend.
Nothing changed, except for the price, but the fundamentals are still there. The hashrste changed, but this always changes. This time, it’s a bigger change, tick-tock a difficulty adjustment happens every 2016th block like a grandfather clock chimes every hour. It will change again, when volcano’s contributes to the hashrate. Ignore the price. Think about saving sats.