Credit Cards & #GetOnZero \ stacker news ~bitcoin

1404 sats \ 12 comments \ @NOV 3 Feb bitcoin

I’m sure most have seen Jack Mallers’ recent thread about getting on zero fiat. As outlined in his podcast, his philosophy is to spend on credit cards and then sell bitcoin once a month to pay off the credit card in full.

Let’s assume he sells the bitcoin on Strike - how does he send those dollars to pay off the credit card? I imagine he’d still have to have a banking relationship somewhere. Now, Fold is starting to fill this void but the question remains:

What services have been built or must be built to allow us to live on bitcoin (zero fiat)?

This includes spending at merchants, paying bills, tax reporting requirements, etc.

What’s the lowest friction method for living on zero fiat?

Best, -NOV

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505 sats \ 0 replies \ @anon 4 Feb

Everyone absolutely must live their own values and perspectives in a free world. I seek to convince or argue with no one and just peacefully live my life. With that said, I am genuinely shocked how bearish everyone is. Holy shit, is this Stacker News or the NY Times water cooler? #TeamJack #GetOnZero

640 sats \ 2 replies \ @orthwyrm 4 Feb

I did this for a while:

Pay for everything on credit card
Pay off balance with monthly salary
Convert surplus into BTC

However there were still many instances where I needed to sell BTC to cover larger expenses. This can be expensive due to transaction and trading fees.

As of now I essentually have a 3-month emergency fund in cash, with almost everything else in cold storage BTC. But the opportunity cost of that not sitting in BTC eats away at me.

150 sats \ 1 reply \ @carlosfandango 4 Feb

Having readily accessible cash (rather than BtC) is so important and 3-month is a good amount. The tax implications around selling BTC (as mentioned in the OP) are pretty debilitating and outweigh any opportunity cost fears.

100 sats \ 0 replies \ @orthwyrm 4 Feb

I think that depends on the tax system. We have a bad CGT deal in the UK, but it only applies if the BTC has appreciated in value and outperformed cash.

I think the real killer is if the price crabs for a couple years, but you're flip-flopping between exchanges and taking a ~1% haircut with each transaction.

41 sats \ 0 replies \ @NOV OP 3 Feb

Some initial thoughts of my own:

-I currently save in bitcoin exclusively, but spend the fiat from my paycheck to pay bills and leave a little cushion for other fiat expenses. This avoids the tax burden of buying and selling bitcoin. This also requires one to live within his means, avoiding spending more than he earns to avoid selling sats.

Unless tax reporting requirements change, I think this is the lowest friction, highest reward strategy.

I really like the idea of Fold’s latest features, but the tax man always cometh…

150 sats \ 0 replies \ @OriginalSize 3 Feb

Zero fiat is too risky. See below for a better strat. The reason zero fiat is too risky is services like Strike appear and disappear often which creates a lot of work for you. Outside of established and long-lived exchange services, I think we have everything we need.

Components of a more sensible long term strategy include: Don't sell except when the market shoots up through your target price level(s). Try to achieve through that process an allocation that works for you. If you can buy at <1/3 of what you sold last cycle, then you get the best of all worlds, taxes paid, cash to spend, stack maintained.

100 sats \ 0 replies \ @KLT 3 Feb

Zero fiat is pushing it but I’ve been living this way since last July. There was something about earning interest on a savings and then having to pay taxes back on that too that made me go, this is silly. Why keep a melting ice cube in dollars? I think what’s important to note is job stability. If you have a relatively stable job and are living below your means, then ideally you shouldn’t have to dip into your stack and use your cash flow to pay any unforeseen monthly expenses.

If you’re disciplined with credit, getting cash back and using that to stack more is another great power move.

If someone is able to save say $3k - 5k per month just from living below their means with a steady job, then if something unforeseen happens, that $3k - $5k won’t go to stacking sats, but instead to your unforeseen expense.

This movie isn’t for everyone obviously. YMMV.

100 sats \ 1 reply \ @joda 3 Feb

Zero fiat is a bad idea. You can be a maximalist and still have enough critical thinking to diversify. Remember how at the beginning of COVID Bitcoin went to like $4k?

I don't use Bitcoin credit cards because they don't have rewards as good as fiat cards. I can get 3-6 percent back on fiat credit cards, then use that for, you know.

Selling Bitcoin every month just means fees and taxes.

1 sat \ 0 replies \ @NOV OP 3 Feb

What’s a healthy allocation to bitcoin versus cash for you? An emergency fund of fiat? 50-50 cash-bitcoin?

100 sats \ 2 replies \ @SwearyDoctor 3 Feb

there are quite some bitcoin credit cards now that function as debit cards, where you either have a stack of bitcoin that gets sold every time you use the card OR that you have to convert to fiat to charge the card.

0 sats \ 1 reply \ @NOV OP 3 Feb

Yeah - Fold is probably the most bitcoin friendly one I’ve heard of. Any other companies come to mind? BlockFi and Gemini had one, I think, but I wouldn’t touch those companies…

150 sats \ 0 replies \ @SwearyDoctor 3 Feb

that's the thing, they're all (of course, I guess) tied into things. There is one by Binance, it got dscontinued in Europe, but in other parts, still works. Crypto.com has one, and there's the CL card which ties in with a ledger (though only in the sense that it's in the ledger live software - you can certainly use it without keeing bitcoin in a ledger, you just have to transfer some to their custodial wallet to be usable in the card. But yes, all of them have contact points with things you might not want to have contact points with, though it's possible to minimize the contact by keeping your stash in other places and only transfer over what you need to spend.