This is the first of some articles I am going to post about Bitcoin, specifically. I will write about other cryptos of course but I don't want to generalize too much.
I learned a couple things early on with Bitcoin. I thought this experience could be of value to newer hodl'ers.
For the millions of explanations for what Bitcoin is, there is one that stands out in my book. That is, "Bitcoin is a holding tank that can expand to ANY size." Can it shrink? Sure. Stay long enough and you will probably go through a shrinkage. Maybe many. The odds however, over time, are on expansion. This is the part most people, and I mean like 99% of people in the United States, don't understand: The US dollar is the bubble, not Bitcoin. They will always make more and more dollars, but we know the cap on Bitcoin.
The reality is, the USA (and so many other countries around the world) need to create more and more dollars to pay for liabilities. This is a given: Hold dollars and you will be screwed over time by inflation. Bitcoin is merely a tank with a fixed number of units that can absorb these paper currencies and perhaps help protect a similar value in the future that you put in today. That's the part people don't get. I don't know when they will.
When you spend Bitcoin, it's can be very hard to replace what you spent. You can replace the value in dollars, for example, but more often than not, it won't buy you as much in Bitcoin terms. As basic as it sounds, this lesson usually has to be learned the hard way.
There are times, sometimes years, when the Bitcoin price drops. That doesn't mean it gets easy to acquire. People, yes even in the United States, don't have a lot of extra money laying around. Will they put it into Bitcoin next time the price is falling off a cliff? I doubt it. Will they buy some when it stops falling? Probably not.
It's a hell of lot harder to acquire one Bitcoin at $2,000 then it was at $200. Duh, right? Well, who's going to be able to get left of the decimal point when it's $5,000 or more? I doubt your wealthier friends will have one bitcoin. They won't at $10,000 and they won't at $40,000.
There are less than 16,000,000 bitcoin available, today. There are over 6 billion people in the world. Not many people will have one bitcoin. Dwindling middle class America might have a little more time left to get there, but I doubt many will. That's not to say they shouldn't try to save regularly in bitcoin. You don't have to have a whole bitcoin to benefit, here.
Acquiring bitcoin only gets harder over time. People should see this as more of an incentive to start building sooner than later, not a reason to not participate.
So, bitcoin waits for no one and - more often than not - only gets harder to acquire. If you own bitcoin and you think it can't go up any more, guess again. Spend it, cash out for dollars and see if you can get back what you used to have. Bitcoin slips away from people.
Think of these as features of bitcoin. The holding tank that grows by eating paper money.
