How Bitcoin’s Fluctuating $ Value is Hiding a Philosophical Shift
Solving our financial problems means solving our thinking first. We’re going to unpack that today.
Today, we are diving head-first into the truth about money, why most of us are doomed to slow ourselves down, and how changing our thinking is the ultimate key to financial freedom.
Howdy all. Here comes another issue tackling unconventional ways of thinking and making thinking work for you, and not the other way around. It’s financial freedom through freedom of thought.
With a better understanding of how we see money, we have a better shot at achieving financial freedom. With the wrong understanding, we are doomed to fall into the rat race built with consumerism, waste, and short-term thinking.
Financial freedom, or financial independence, is defined by Investopedia as:
Having sufficient income, savings, or investments to live comfortably for life and meet all of one’s obligations without relying on a paycheck.
A little dry. I like my definition better, but hang tight and we’ll get there. We need to build a bit of history first.
As it stands, everyone has a guide to achieving financial freedom. And practically no one who is giving you these guidelines is financially free.
5 Years Time: the bitcoin saga
If you’ve read any of my other work, you’ll know that my approach to understanding and solving something requires a lot of conviction and thought. You’ll also know I’m deeply introspective. In other words, I don’t toss around parabolic ideas without a solid understanding of what leads to them.
My conviction results from a long journey, starting with entering the space around the fork wars, late 2017. Hopped on Binance and hit the slots… I mean the altcoin market. Many years have passed, as have thought processes and choices of where to store my value.
I’m fortunate enough to be steadfast in my beliefs of where I want my money, and as a result of that have come to some mind bending conclusions.
In 5 years time, I’m at a point of reflection. That reflection is this: Bitcoin changed me.
My take on the truth about bitcoin
In my earlier years in the space, I viewed bitcoin and cryptocurrency as a tool to get financial freedom. Every token and their mom promised that they were changing the world for the better, so I even felt good doing it. Sitting back and watching my profits sore.
And then. Bam.
Fast forward to December 2018. The top 10 coins down percentage from their ATH. A bloodbath.
It was then and every bear market cycle that I really started seeing who was in it to win it. The ones who kept their boots on the ground and building. Now, this isn’t an article to say what you should buy. For the purposes of this philosophical change, though, my take is on Bitcoin having that powerful change.
It’s so easy to get wrapped up in bitcoin’s price before realizing what is actually happening behind the scenes. But it is also humbling to survive a bear market, and see a change in yourself. And guess what? We’re in another bear market.
Thinking: what bitcoin does to it
We’re going to give ourselves a shortcut to how we think, and set ourselves up for financial freedom. First, let’s understand it.
That phrase, financial freedom, is one we hear quite often. The FIRE method, compounding interest methods… there is a host of methods to achieve financial freedom, but what if we’ve been misunderstanding financial freedom this entire time?
Or rather, what if in order to achieve financial freedom and the thinking that helps us to get there, we have to re-frame what it is to have financial freedom? To get there, you’ll have to go along with the following:
Assumptions
- we are influenced by our society
- we are influenced in ways we do not realize
- we are especially influenced by powerful motivators like money
With me on these? Great. Let’s start with that change in our thinking here.
Financial freedom, taken literally, is the freedom to have control over your money. The freedom of your finances.
Bitcoin does this. Literally, physically, and through its issuance.
Low-Time Preference
First, we have a form of money, called fiat money, that exists to inflate and lose its value over a period of time. That’s built into it, and expected, on a long enough time frame. Thing is, we don’t know when that money will be changed in how it’s issued. That has an effect on the US economy, as well as economies around the world, and your mind and stress.
With how the dollar is set up, I need this money to work for me and for me to work for the money, in order to achieve the classical definition of financial freedom.
Due to how money is set up, we are incentivized to not hold it for long periods of time. Meaning we have a high-time preference, as it makes more sense to spend it and grow the money in investments.
High-time preference translates in other areas. Immediate gratification. The social media dopamine machine.
If money is such a strong motivator, it only makes sense that how we approach it would run parallel to the ways we approach other things.
Look at someone who has grown up poor. More often than not, they are likely to eat their food fast when they first are served it, even if they are no longer poor. This is a survival mechanism ingrained into them to ensure they are fed while the food is there.
Back to money — as inflation increases, we have an increasing appetite to make money. Queue the get-rich-quick schemes, or the low-end products that don’t quite hold their value.
Making money requires time. Inflation takes away time. As a result, you’re in the rat race of all rat races.
How do we start achieving low-time preference?
To hold bitcoin is to stomach losses of ~75–80% during a bear market. To do so, you typically have to be steadfast in your beliefs and willing to wait it out. With bitcoin’s issuance, the supply only decreases over time, with a cap of 21,000,000 coins that will ever exist.
Naturally, all those who interact with bitcoin are now operating with the mindset that this is a great savings tool in the long-term (anecdotal). All of a sudden, I didn’t want all of the junk in my room that could instead be saved in good money (not anecdotal).
I began to intuitively understand that for me to be happy, I must be more patient — across the board. Relationships, money, progress, work. You don’t know how many times I’ve tried to force that thought.
With holding bitcoin, I intuitively knew it and felt it. Bitcoin price did what it does, but holding it through those changes forced a change in me.
The fun p(art)
The refrigerator of today is built worse than the refrigerator of our parents. Same with the bread machine. All of it. Why?
You guessed it, money.
To increase profits, companies started to make a product that would require more frequent buying, thus resulting in more waste. Jerks. But they’re caught up in that rat race.
With product quality trending towards zero, we had the same instance in Architecture.
I mean, look at this beauty, BUILT IN 125AD. Do you think the structures we’ve built today would last ~1,900 years?
In order to build, we needed to find cheap material to cut costs wherever we can. We now operate under a different financial system than we did then.
As we’re faced with money (bitcoin) that is something we would prefer to save, we are all pushed as people to create things that are worth that good money. Let me explain.
I started a company. I want to sell clothes. Hey, you, check out this shirt I made, wouldn’t you like to buy it? Clearly I need to work on my marketing campaign.
The shirt I make will be of great quality, because unless it’s worth buying, no one will want to part with their bitcoin. Producing good quality items → lasts longer → less waste → less penny-pinching (sats) → etc.
This is the extremely nuanced part of many facets of Bitcoin that are hard to explain when a news headline says bitcoin is bad for the environment. Same thing can be said about the internet in its infancy.
Value for value
Those who have been in the space already recognize the importance of holding their bitcoin instead of spending it. Therefore, companies have gone above and beyond to create products that reward the consumer. No more food filled with chemicals. If I’m giving you my bitcoin, it better be worth it.
See the beef initiative (not sponsored).
Bitcoiners intuitively understand bitcoin, especially in its infancy, is not worth parting with unless someone gives them something of real value.
It will be an interesting lifetime to live through, and I very much look forward to it.
A note on this article that I couldn’t fit into it:
Have you noticed poorly written articles that lack in substance? That your google / search engine of choice is giving you results that say the same bland vague thing over and over? It’s not people losing their quality of writing. It’s SEO incentivizing a specific type of writing that AI is able to pump out.
Bitcoin is why I try to give you value in this article, even if it means not getting noticed for a long time (low-time preference). Once it’s noticed, I hope that you’ll find it well, and it will help you. Thank you for reading.
