Bitcoin (BTC) is having an exceptional end to 2020. Euphoria has taken hold of the market since Christmas, and its price keeps breaking records hour after hour. More and more retail investors will be looking to come to the world of Bitcoin in the coming weeks. The big question they will ask will be whether it is better to buy Bitcoin first or understand the why of Bitcoin. In this article, I share with you my take on the matter.
I’ll start this article with a question that should surprise you:
Who came first from the egg or the chicken?
You thought you were reading an article on Bitcoin, and I’m starting by asking you an ancestral question that has almost become a scientific and philosophical running gag. As always, this seemingly innocuous question leaves no one indifferent.
There are clearly the pro-hens and the pro-eggs.
Some will swear to you fondly that the chicken came first, while others will be ready to fight against anyone who will not admit that the egg came first. This question arouses passions.
I will disappoint you but I have no clear opinion on this issue. I just wanted to start my article by pointing out that some questions are struggling to get a consensus answer.
In the world of Bitcoin, there is a question that I see coming back frequently:
Should a person first buy Bitcoin and then seek to understand the why of Bitcoin? Or should she first find out why Bitcoin is a real currency revolution before buying Bitcoin?
I don’t have a definite answer to this question, so much I can find arguments in favor of one or the other.
Buying Bitcoin requires you to be really involved
Buy Bitcoin a first time is an essential step in getting a beginner’s footing. This is because once you put some money into Bitcoin, you will really feel involved. You won’t be able to put off important things until tomorrow.
I often say that the best time to take action in life is now. This obviously applies to the purchase of Bitcoin. Rather than thinking for months and months about your strategy, then the best time to enter Bitcoin based on its price, it makes sense to buy it right away.
Bitcoin’s divisibility is a huge advantage here since you can buy just $ 50 worth of BTC. The risk is more than limited, and you will understand how many concepts work that you might find too complex. You will then see that the complexity of Bitcoin is a legend that is constantly amplified by opponents of Bitcoin.
What is also true is that people who buy Bitcoin without understanding the stakes of the Bitcoin revolution will tend to panic more easily when its volatility kicks in.
Buying Bitcoin without understanding the why of Bitcoin causes some people to panic at the slightest drop in price
At the slightest very significant drop in the price of Bitcoin, like the one we experienced in March 2020 for example, these people end up breaking down by selling their BTC at a loss. Not having understood that Bitcoin’s volatility can be your greatest ally, they make them their worst enemy.
People who choose to understand the why of Bitcoin first usually don’t have this problem.
Indeed, they choose to really understand how money works by going beyond what the education system has always taught them. They then discover that the current monetary and financial system is failing and cannot be fixed.. They discover with joy that Satoshi Nakamoto invented Bitcoin to address these issues.
Bitcoin is a unique invention that represents our only real alternative to the limits of the current monetary and financial system.
Understanding Bitcoin gives you confidence in its revolution
Once you understand the power that Bitcoin will have over the world in the years to come, you can’t help but become a Bitcoiner forever. It takes time of course, but it’s the only way I can think of it. Once you embark on this journey that will make you become a Bitcoiner, you will understand how valuable your BTC is.
Instead of panicking with every Bitcoin price drop, you will make the winning choice to accumulate more each time. Each drop in the price of Bitcoin will be an opportunity to increase the total BTC you own.
People who buy Bitcoin directly without having taken the trouble to understand the why of Bitcoin often make a fundamental mistake: they think Bitcoin is a financial investment like any other.
These people understand that Bitcoin is the best hedge against monetary inflation. They therefore buy Bitcoin to guard against the endless increase in the money supply of the US dollar. This is effectively part of Bitcoin’s biggest value proposition in 2020 and for years to come.
Bitcoin is much more than the best monetary inflation hedge
However, Bitcoin is not only the best monetary inflation hedge around, Bitcoin is also, and most importantly, the best way to protect your wealth in a censorship-resistant way..
Those who do not make the effort to fully understand Bitcoin do not perceive the liberating power of Bitcoin. De facto, they feel that buying Bitcoin through PayPal or any other third party is a good thing, because they haven’t taken the time to understand Bitcoin. They don’t know that you don’t have any BTC if you don’t have the associated private keys.
If you make this mistake, you will find yourself stuck in a system with the same risks as the current banking system. By letting others own the private keys of the BTCs you buy, you are letting an entity have control over your wealth.
Barely a few days after entering the world of Bitcoin, PayPal has already shown that this risk is indeed real. A PayPal user who had bought Bitcoin via the service of the online payment giant thus saw his account banned for a totally arbitrary reason. This user has made too many crypto transactions in the eyes of PayPal.
Since this user did not have the private keys of his BTCs, PayPal was able to confiscate them.
Understanding Bitcoin Will Help You Take Full Control
A person who chooses to understand the why of Bitcoin will never make this mistake. She will have understood that to take full advantage of the Bitcoin revolution, she must take responsibility for the security of her Bitcoins. Under these conditions, you will never see a Bitcoiner accept that someone else has the private keys of their Bitcoins.
Do not forget the first of the ten commandments of Bitcoin:
Not your Keys, Not your Bitcoin.
If you don’t have the keys associated with your Bitcoins, you don’t actually own any Bitcoin. This is something that more and more people seem to take lightly over the past few weeks.
This endangers the Bitcoin revolution as initiated by Satoshi Nakamoto. Indeed, the risk is real that you let third parties come and steal the Bitcoin revolution from you by locking you into a centralized system with the same flaws as the current system.
To protect yourself from this problem, do not make the mistake of buying Bitcoin through a third party like PayPal or American banks for example.
It’s hard for me to say which is the best path to enter the world of Bitcoin. Buying Bitcoin directly has advantages but also disadvantages if those who do so don’t make the effort then to build skills on understanding why Bitcoin is right.
Those who seek to understand the why of Bitcoin in the first place take the risk of getting lost in theory and being afraid to take action.
In life, nothing is ever all white or all black. The best solutions are usually found in shades of gray. In my opinion, it is best to take a mixed approach.
My general advice is to take action by buying Bitcoin while learning more about money, the current system, and why Bitcoin is. Buying and understanding Bitcoin in parallel will allow you to combine theory and practice. Ultimately, you will probably end up making the only choice that is necessary to ensure a better future in terms of money: to become a Bitcoiner.
Please feel free to share your feelings on this matter with me in the comments. I can’t wait to find out what you think is the best beginner’s approach to getting started in the world of Bitcoin.
A developer by training, I discovered Bitcoin in 2014 but did not immediately grasp the importance it could have for the world of tomorrow. I took a more in-depth look at it from the start of 2017 and I haven’t let go of it since.
Passionate about Bitcoin and the new system it is trying to build for the future, I decided to participate in its evangelization at my modest level by writing about Bitcoin, Blockchain and cryptocurrencies in different media.
It is with pleasure that I publish some of my texts in French on The Coin Tribune.
I also write quite a bit about personal development and self-improvement.
Please feel free to connect with me via social media or in comments on my articles if you have any questions regarding my articles.