When I understood I was on a Bitcoin Standard, I went out to my close bitcoin friends to ask them suggestions. Only few of them had. The goal of this post is to write down an overview of I found myself on a bitcoin standard, what's my specific situation and how I'm tackling it as of now.
How did I happen to be in a bitcoin standard?
For those of you that didn't stumble upon my last posts (particularly the one that celebrates my "fiat liberation"), I'm going to give a little background.
I've been a bitcoiner since 2019. I don't know what defines a "bitcoiner", I used and still am calling myself as such because I hold sats, love the tech and the community. And the idea of Freedom that Bitcoin brings.
At the time I had just started my University career and stumbled upon a fiat job that guaranteed a fixed monthly income. I was not rich, but I had little expenses and was able to save a lot of liquidity.
I don't believe in luck generally, but with bitcoin I feel I've been very lucky. Sats were quite cheap (cheaper than now lol), the ratio signal/noise in the community was extremely high, I didn't happen to crush into scams, shitcoins and all the stuff usually distracting newbies.
As time went by, I continued saving liquidity and converting partially my income into sats. I didn't have a specific amount of sats I wanted to hold, just proceded to mindlessly convert fiat into sats. I never spent any bitcoin for basically 4 years, all sats were going directly to cold storage.
Long story short, if you convert fiat to sats and only spend fiat, the bitcoin standart is almost inevitable. Off course price appreciation contributes to this process a lot, just avoid to fall into the trap of portfolio rebalancing...let bitcoin do its job on your behalf.
This is how I happened to have almost all my wealth in sats.
I've a background in (fiat) economics and I know that from the mainstream point of view this is not wise at all. Instead, that's a crazy position to hold. I'm not advocating for this nor suggesting it to anyone...that's not financially rational (they say).
Store wealth in the more free protocol, choose wisely
A couple of years ago I found myself thinking about the difference between lightning sats and onchain sats. A lot of people used to consider lightning sats trapped into channels, meaning that they are sort of constrained into an environment, whereas onchain sats are more free. I believe the contrary is true: lightning sats are more free to flow, whereas the freedom of onchain sats is constrained to the volatility of onchain fees.
Same thing happens to me now when I compare bitcoin to fiat shitcoins: everyone believes bitcoin to be less free to flow into the real economy because it's more difficult to find places to spend bitcoin. But if you think about it, bitcoin is programmable in a more dynamic and customizable way, is not geographically or politically constrained.
Wealth stored in bitcoin is more free than wealth stored in fiat.
Income sources
Now, when I published the "I'm fiat free" article some of you stackers asked me if I had an income in sats that made me able to go into bitcoin standard mode.
The reality is...I've no bitcoin income. From time to time I happen to receive sats instead of fiat as a payment, but that's very occasional. My main job is a fiat job and I earn euros, going directly in my bank account. I do some small activities that pay me in cash, but still fiat.
Expenses sources
I'm in my twenties and I live on my own in a small flat, so I've some recurring expenses to take care of monthly: rent, bills, groceries, car-related expenses. My real life relationships are all normies oriented, I've friends I see and go out with but only some of those have interest in bitcoin (and almost all the members of this small subset have financial interest).
Given this outlook, I've found out that some of my current expenses can be taken care of in bitcoin. For example, services like @bitrefill or The Bitcoin Company (love you guys <3) enable me to pay for gasoline, groceries, some restaurants etc in bitcoin. Given that gasoline and groceries sum up to almost 30% of my monthly expenses (on average), I decided I'm going to spend also some sats monthly to take care of those.
My rent cannot be paid in bitcoin, nor the bills. The telephone expenses can be paid with bitrefill, so that I'm using it too.
Earning sats directly
As I said, I've not a bitcoin job. Occasionally friends pay me in bitcoin for stuff or give me back money they owe me in sats, but that's very rare.
Since I work in the tech industry, it could be that in the future I'll be able to land into a bitcoin company, but as of now my seniority is very low so that I'm not even considering it (given the minimum requirements in job offers I saw posted around).
As a side remark, I know that companies like Bitwage are out there and can help to get an income in sats.
I don't want to be KYCed on my earned sats and I don't want to be treated as a trader every time I spend sats because of some supposed financial gains I had. Sadly, these services are not an option for me.
Spending sats directly
Spending sats directly is almost impossible in my geographical zone. There are some places, but it's not that I can go out dining every day at a restaurant just to spend sats. Occasionally I happen to go to these places (fairly distant from where I live) but overall I've no chance to spend bitcoin directly in a recurrent manner.
Spending sats with giftcards
If you don't spend sats directly, you have to use some exploits. I love gift cards, I love how many services I can pay for with Bitrefill.
But still, gift cards are an exploit.
I would not be surprised if overnight Bitrefill or The Bitcoin Company will need to KYC customers, I believe they have a lot of pressure on their legal teams because of that.
I used to think gift cards as a clever idea to fuck the system, now I'm slowly changing opinion: gift cards are fucking us, not the system.
Why?
Because we are used to them..at least I am. Gift cards will disappear for legal reasons...be prepared.
What if I didn't spent sats?
When I discuss the idea of spending sats with my close friends, their opinions
tend to converge to something like:
Man, you're stupid. You don't spend sats, you store them and hodl. What if the 20k sats you spent today for a pizza will let you buy a car into 10 years?
Also, some of them tend to express the following concern:
You got to a dangerous financial position, specifically because you don't want to KYC and sell sats for fiat in the bank account. You're better off spending sats and keep as much fiat as possible, because these sats will be not spendable in the real economy once the attack on bitcoin will be more severe.
I don't expect to get different answers, so I'm not surprised. The solutions to the matter of spending sats (or not spending them, really) appear to be:
-
Avoid spending sats directly, instead take a p2p loan by putting bitcoin as collateral and spend the stable-shit-coins you got from the loan. If the loan is long enough, you'll be able to repay it with the asset appreciation. With this strategy, I can keep my current balance between bitcoin expenses and fiat expenses, with the addon that bitcoin expenses will be not in sats but with collateralized bitcoin.
-
Always spend all the fiat and keep all the sats. This second strategy somehow creates the issue of having the need to KYC myself to get consistent fiat chuncks if I were to need them to buy a new car, flat or whatever.
With regards to the second point - the concern about my unbalanced financial position - I know that I don't want to KYC myself. I don't need to put my ID everywhere just to spend money. Fuck it.
The consequence is that I'll not be able to buy big stuff like a new car or an house with the sats. At least not as of now and particularly in the place where I live here.
The future
I have to think through my situation in a profound manner, I feel I'm learning day by day more things about myself thanks to this situation. I know I don't want to spend sats only because...you know why, sats are the most precious thing on this planet (leave aside love for a moment).
I also know that I need some fiat, unfortunately. My job pays in fiat, so that helps.
I'm very annoyed by the fact that here in the damn southern Europe you have to pay capital gain taxes if you sell bitcoin. That's mental...and that's why I want to stay as far from KYC as possible.
I'm not a trader, I've a ton of interests and few hours in a day I can spend working on my side projects...I don't want to spend my time collateralizing on p2p platforms and playing with shitcoins and interest rates. So I guess I'll keep spending bitcoin directly when I need it, splitting my expenses into sats and fiat and keeping also an emergency fund in a fiat bank account because...you never know.
Spending and earning are not what used to be
I so this is what happens when you fall into the Bitcoin Standard hole: spending is not as it used to be, earning is not what it used to be.
I'm fairly young so I can dare to risk a bit more, even though I would like to focus also on having a family into the next 3/4 years. But that's a matter for an another post.
I genuinely look forward to your opinions, experiences about being on a bitcoin standard, if you happen to have all your wealth in bitcoin.
In the meanwhile, take care.
