Famous investor Warren Buffett recently said:
"If you offered me all the bitcoins in the world for $25, I wouldn't take it." 1
And he would have done well. Bitcoin would have no value in that case. For bitcoin to serve its purpose, it must be well distributed to as many people as possible. That's also why I want to try to convince you to play the bitcoin game with me.
But what good would bitcoin be to you anyway? You may not even have any of the problems that bitcoin is trying to solve.
It doesn't protect you from inflation.
There is a fixed amount of bitcoin - it will be almost 21 million someday and never more. But over the last year, bitcoin wouldn't have protected you much. Whatever you bought at almost any time in the last year, you're worse off now.
|Bitcoin price in USD over the last year
You don't need unlimited transactions
With bitcoin, you don't need to ask permission to send funds. But most of the time, neither does your bank. When they want proof of income or freeze your funds for a while they do it to protect you.
You don't really need fast and cheap transfers around the world either
Bitcoin works from morning to night, during the holidays, and is very fast and cheap when using the Lightning Network. But you do most of your transactions in your country. Card company fees are hidden in the purchase price and you don't have much reason to deal with them.
There's no need to run away from the war
With bitcoin, you can flee to a foreign country. All you have to do is remember 12 words. But you have contacts in your country, you know how it works here. Running away would bring too many complications.
However, bitcoin is a so-called coordination game
If others don't use bitcoin, it will be useless to you. But it's not such a big deal if you have some bitcoin. But if the rest of the world switches to bitcoin and you don't have any, you'll have a big problem. In the new world, your money will have no value. Those who have been accumulating bitcoin for years will have a huge advantage against you.
|Bitcoin adoption matrix
The later you enter bitcoin, the more of your privileges you will lose.
But all this is only if others want to use bitcoin. Why would they?
There are plenty of reasons. Some of them I've already mentioned, even though they probably don't make sense to you. But for the masses of people in the rest of the world, they are of great importance.
Isn't bitcoin protecting you from inflation?
If you look at the numbers in the long run, you'll see that it protects you too.
|Bitcoin price in USD since 2013
If you think only in the last year, you only need to live in a country with an even worse currency than we have. For example, this is a chart of the Turkish lira.
|Bitcoin price in TRY over the last year
I couldn't find charts of countries with the worst inflation like Sudan or Venezuela.
Inflation is rampant all over the world. Only about 21% of the world's people live in countries with inflation between 1-3%, which is generally recommended by macroeconomists (even though there is nothing meaningful to support such a target). The other 6.6 billion people live with higher inflation. Over 100 million people live with annual inflation over 100%.2
There are many people in the world who are already protected from inflation by bitcoin. Billions more people will one day notice that there is a way to protect themselves. Then the move to bitcoin may be very quick.
People around the world are blocking transactions
In early 2022, truck drivers in Canada were forced to get vaccinated if they wanted to continue their jobs. This led to widespread protests. People pledged their support through the GoFundMe platform. The court subsequently decided to freeze the funds.3 The state tried to harm them in many other ways, but the funds only came to them through bitcoin. Read more here: https://bitcoinmagazine.com/search?query=trucker These people had a good incentive to use bitcoin and became an example and a threat to many others.
At least in China they are experimenting with so-called CBDC - central bank digital currencies. It's not that much of an impairment compared to normal government money. But it does free the hands for more restrictions and central planning. There are enough people in China alone who will soon need an escape to the free money that is bitcoin.
Globally, 31% of adults don't have access to a bank account.4 In developing countries, it's over 40%. Overall, this affects 1.7 billion people. Even in your country, you can meet people who don't have a bank account yet, but they work with bitcoin on a daily basis.5
All these people have a good motivation to learn how to use bitcoin.
Fast and cheap transactions
If you earn money abroad and send money home you may have to pay high fees. Low- and middle-income households moved about $550 billion in 2019. Companies like Western Union have a fee of between 5 - 9.3% on these transactions for $200. For smaller amounts, which are more common, the fee was commonly 40%.6 This motivated Jack Mallers to offer the Strike service in El Salvador with virtually zero fee. He uses the bitcoin network to do just that.7
People are being forced to flee the country.
Bitcoin then saves their life savings. For example, one Ukrainian man fled to Poland and transferred $2,000 worth of bitcoin.8 Over 6 million people have fled to the Czech Republic alone this year because of the war. Globally, in 2021, over 81 million people were forced to leave their country.9 All of these people have a good incentive to gradually learn how to use bitcoin.
Bitcoin is the money that most people in the world agree on. The great powers are competing with each other - the dollar, the yen, the ruble and many others. Ordinary people, meanwhile, are gradually switching to bitcoin. In the western world, people play casinos with altcoins. But in the long run, those who save in bitcoin win. You don't have to want to accept that. But the sooner you adopt bitcoin, the better off you will be over time. A world with bitcoin is both fairer and more efficient.
- You don't need bitcoin much in the Western world
- You're better off than people in other parts of the world
- But they need bitcoin very much.
- If you don't switch to bitcoin in time, you will lose your privilege
Or as the classic says:
"It might make sense to get some in case it catches on. If enough people think the same way, it will become a self-fulfilling prophecy."Satoshi Nakamoto
This article is a free transcription of my lecture from UTXO.cz on June 5, 2022 in Czech language 🇨🇿
See for example twitter.com/Stepec_Drabek/status/1546491478125461505 ↩