The economics of Bitcoin have always been the driving force of this industry, or at least so I thought. It’s been a very long year and a half, and as somebody that questions everything for the sake of knowledge, it’s been hard to understand exactly what I should be doing and where I should be.
In December of 2017 I had some free time as I was visiting my mom. I took it as an opportunity to improve my ability to manage my personal funds and enter back into the stock market after life had distracted me from it. My life has always followed a flow like this, where I will learn, grow and fail.
I met somebody who had a unique, but relatable perspective on the movements of the market. I learned a lot from what they had experienced and were so kind as to have near-daily conversations with me as I learned and we bounced ideas off each other.
By the end of that month, I had refined my ability to tolerate risk while minimizing losses and taking gains. Just as I’d done in the past, however, January came and I took a step away from the market as my grandpa passed and my life become chaotic. I told myself that the diligence I had done on my positions was enough to rely on and I was able to take solace in that.
I was wrong, and just like in the past, I watched my positions dry-up in my absence, wiping away any feeling of success I might have had and leaving my experience a failure. This cycle has been prevalent in my life, and I’ve grown to expect it. When things seem to be going well, the moment I start to get happy with my position in life, the worst is right around the corner — you can never expect the unexpected.
At the same time, Bitcoin had started to pop onto my radar as something worth looking more into. The economics of Bitcoin and implications of blockchain were attractive to me and I immediately wanted to use the benefits of the technology as the backbone of my pet project I was just getting started on (game/app).
As December progressed, I realized that my trading strategy was going to leave me with taxable gains for the year that didn’t represent the actual profit/loss I was holding (sold gains versus held losses). It was for this reason, that I invested in mining hardware. I had a plan to minimize my risk while offsetting my taxable gains, but ultimately this was me just moving directly into my next failure.
While learning more about crypto, I would look and look and look for anything tangible in the industry. This is what I had always been waiting for, something real that would create value out of this technology. As a novice programmer / developer, I also always came at it from the position of what I could use and utilize.
In the end, the best projects I could find were ones that had a solid, reputable team of developers following a Whitepaper that promised to have utility — utility that I could understand and see myself using. This, however, ended up being the crux of my issue.
As a novice, I don’t consider GitHub as being a great place for learning how a project functions or how the files work together. I would dig through source code, but it’s quick and easy to drown out core functionality with loads of copy-pasta code and functions. The best I could do from my perspective, is try and evaluate the quality of the commits and approximate what sort of work has been done and the time it took to do it.
I have to admit, that to this day I’ve still never read the Bitcoin Whitepaper. My first step in learning about this industry was understanding how people perceive it. It’s because of this reason, that the only reason I ever even held Bitcoin was to hedge against my investments into alts, which seemed like the only things with promise.
From the beginning, I understood that what worked was utilizing computers to do work for the system (network). For Bitcoin, this work for the last 10 years has solely been to secure the network and permeate transactions — not something super exciting. I wanted to be invested into something that was progressing towards bringing work onto the blockchain. With so many scam coins, there’s no surprise that this was a fruitless effort.
Due to the change in narrative of BTC from its original vision and Whitepaper (which I was oblivious to), I didn’t yet fully understand the economics of Bitcoin, just the vague idea of the potential as I saw it. It’s because of this reason that my investment into mining ended up being a failure.
Part of my plan to minimize risk was to focus on GPU mining. I could buy computer hardware on deep discount and focus on pieces like PSUs, motherboards, storage and the likes that would minimize depreciation. Then, rotating GPUs and selling old ones in computer builds would offset the depreciation further. All of this to minimize the taxes I would pay on my gains, which eventually disappeared.
Ultimately, I could never get this off the ground anyway, because I had put myself in a couple other situations that limited how much of our electricity I could use, and I didn’t have the willpower to push this whole thing forward. From the electrical permit, setting the pole and building the structure to the logistics of everything, it was more than I could handle entirely alone, at least for now.
Meanwhile, the market continued its bearish trends since the ATH and I was eventually able to invest directly into this market, which ended up being imperative since I am now holding these trailing losses on mining hardware. My favorite alt was always the one that ran best on my GPUs, but it also seemed to be the most promising as I was hoping it would become a platform I could utilize. This was my next failure.
In late 2018, it became apparent that this project had turned into a zombie. There was a major pivot behind the scenes and a couple major team members departed. Since then, the development I had been keeping track of turned into a bunch of barebones commits and nonsense. Part of this could be chocked-up to the private repository for the new platform, but since recently it is now clear that development has been slow and rough and all of us hodlers have been deceived.
I was already skeptical when the pivot happened, if they were masking the reality of the situation with promises that things were continuing on like normal. Despite this, the damn thing was still one of the most attractive projects on the market. If it was dead, then with my newer perspective, it meant that the BTC story was dead too.
On November 15, 2018, Bitcoin was reborn. At the time I knew very little of it (BSV), or of the original vision for Bitcoin, but I had already started getting an idea of what it should be. It would be months before I truly knew the implications of this question, but I asked a trader I follow, “Do you think BSV threatens the current direction of the market?”
I’m usually a private person, and I won’t comment if I don’t think anybody reading the comment will get value from it. I’m not going to berate people for being wrong, but if I feel I can relate and offer a new perspective, I might chime in. Despite this, I recommended once or twice that if you hold BTC, you should be hedging at the very least 20% into BSV, knowing that people wouldn’t agree.
Since that time, my perspective has changed wildly and I can’t even humor any of the beliefs I held prior — and that’s a problem. I’ve never considered myself a trader, I just like to maximize the swings on companies I wanted to be involved in. It’s because of this massive realignment in my understanding of the market, that I’m now in a very risky position — over 80% of my position is now in BSV.
I had starting buying BTC at $6k and averaged down as it finally dipped below that resistance, with my largest purchase < $4k. The main reason I was getting in was so that I could start distributing my position into the most promising alts as I learned about the market. This was always a double-edged sword because there are loads of attractive alts, or at least it seemed so at the time. No matter which coin is your favorite, there are a dozen others doing the same thing that look equally tantalizing. On the chance there aren’t already a dozen, there will be tomorrow.
I already made sure to stay out of ICOs, but had the restrictions for U.S. customers not been so tight, there were one or two I had contemplated. Despite the problems with this country, this is actually a case where I am [somewhat] grateful. It doesn’t matter how promising, how big or how reputable a project is, it has been proven to me now that anything can and will happen in an unregulated market.
I’ve already talked about how a legitimate project can get gutted behind the scenes and turn into a zombie. This kind of deception to investors isn’t allowed in a regulated market, and regardless of the consideration of this token, to me it was a piece of this company to be involved in bringing their products to market, even if it’s all I could do.
An even better example, however, is another small coin that I put a very small (1%) position into after I found a random blog post and did some diligence. They had a platform they were building that processed and held data on the blockchain to be used by business partners for a variety of products/services. It didn’t take long, however, until the company had pivoted away from the currency and started focusing on selling the technology, not the tokens.
There are lots and lots of these projects — promising projects that are backed by a company with a goal and an idea. When we’re talking about unregulated assets, however, there’s no reason to be reasonable with investors or make it clear what position the project is in (dead or not).
It’s hard to ever see the market in the same light that my naive eyes used to. It went from an industry full of developers and aspirations to an industry that is lost and confused, if not outright defrauded. I can’t even imagine the scale and man-hours that have been invested into what now seems like a complete farce. There are countless developers that have been spinning their wheels for years now, trying to create and build this technology for the global market when they could have been creating them on Bitcoin from the beginning, which was designed to not have these imposing flaws.
This is the exact reason that I wasn’t quicker on my move to BSV. It’s impossible to imagine the scale of this fraud, should that be the story and the reality. There’s so much work, so much time and an unbelievable amount of, “value,” tied up in this market and I’m supposed to believe that it was all worthless — that it was all for nothing!? Dr. Wright talks about what he would like the outcome to be, but he’s also said that he doesn’t want to destroy the wealth of others. So, I ask you — every one of you — what the hell can the outcome be?
I’ve held true to my recommendations, but they’ve evolved as I’ve learned. I originally held ~25% of my Bitcoin balance in BSV. Then when we went back to ~$60, I held 25% of my total portfolio value in BSV. Finally, as BTC went on the rise and Dr. Wright was granted copyright for the Bitcoin Whitepaper, I unloaded my position chunk by chunk until I ran out of BTC.
Holding zero BTC is not something that I ever wanted to do, and as it keeps going up in price, it shows how I injected cracks into my investment strategy. Because of my view, I found truth in some of the things traders were saying, and ended up with a smaller position in BTC that I would have liked — to hedge against my other investments. And because of my unwillingness to sell >10% of my BSV, even for trading, I wasn’t able to convert fiat quick enough and I’ve now missed out on some reasonable gains that would’ve helped me keep building towards a better future.
At this point in time, it’s hard for me to say I’d want to hold BTC or any other alt. When I look at how much BSV I could have instead, it makes me want to close out my last two positions. The problem is, that I already have too much BSV. I may have gained confidence with my successful trades since December 2017, but a speculative asset like Bitcoin — BSV at that — is now ~25% of my total wealth. The rest has been cash since I stopped trading.
The best case scenario, if I gave into my desires, is that I could have 4X life-changing money in a decade. I desperately want enough wealth so that I can start and fund my own businesses to help build the future on Bitcoin. With the position I’m in currently, I can’t afford to pay for the help I need to overcome many of the hurdles I struggle with. Despite that, the BSV community is great and they have been helping me grow my knowledge and ideas, free of charge.
I already hold more money in a single currency than I had only originally dreamed of. I pulled out all (but ~2) of my alt positions for gains as BTC was starting on its uptrend, and after converting the gains in BTC then into more gains in BSV, in this exact moment, I’m exactly where I want to be.. almost.
I’m overexposed to one asset, which isn’t a major concern as I’m a small-portfolio value/swing trader at heart. I generally hold cash until I’m ready to take a swing, but what if I miss? My biggest concern is not that BSV will crash, but that it may drop to a point where I could have doubled my position.
With my current exposure, doubling that position would be the very beginning of life-changing money. Because I’ve been so blessed to have this position, I’ve already done some cheap-and-easy, “work,” around Bitcoin, but with twice as much, I could actually start building something real — or rather, I’d have the confidence and safety net to do so without restriction.
I’m only one person in an already small group of BSV developers and investors. I’ve tried being a miner and will likely return after I’ve settled my current holdings (I look forward to Squire’s hardware offering). I’ve also tried to build and develop on the blockchain. In the end, the only thing I can do right now is plant seeds until I’ve built enough to bring my life to the next stage.
I don’t know which of these things are within my grasp, but I’m going to continue learning and growing until others have already built the things I want to see and use. I sleep easy with my truckload of BSV, but the overexposed nature has me worried that things may still be rough before they get better, as they always have been before.
I’ve had plenty ideas of what to do with this technology, but even with this small group, I’m never going to be the only person with that idea. Project after project gets released and I continue to try and learn how I can implement and release my own version. Despite that, I have at least one project that I will almost certainly be working on for the next decade.
I started the concept for my game in January 2018 and my plan was always to make the networking aspect of the game directly peer-to-peer and then to eventually integrate blockchain. This seemed like a herculean task on top of already creating my game engine from scratch, but not impossible. Just like Dr. Wright, I have ideas that will persist for a lifetime and I’m not going to stop growing them, refining them and rebuilding them until my vision is complete.
Long before I had Dr. Wright explaining the nature of Bitcoin, my vision for blockchain in my game was already what Bitcoin offered — or at least, should have offered. Since I’ve come to understand the technology, it has fundamentally changed the approach to my game. The vision I have for my game has never been so clear, and I’ve still got a lot of time ahead of me to keep building and refining.
There’s always two sides to each story. In this case, these two sides are at complete odds with one another. My vision has become clear enough on one side that it has completely obscured the other side of the story. At this point, it’s hard to see alts as anything but the symptom of a problem — a problem imposed onto Bitcoin.
That leaves me with only one option; investment be damned, it’s time to get back to building.
Thank you for reading,