This is a guide on how to use Bitcoin as your primary money.
This means converting your income to Bitcoin and, if possible, receiving payments directly in Bitcoin.
It also means converting all of your current monetary goods to Bitcoin. Lastly, it means becoming used to exchanging Bitcoin for Fiat for your regular spending.
The guide has two sections: Money Management Wisdom and Bitcoin and Your Net Worth.
The first section outlines three practices that will enable you to: 1) get full control of your money in terms of time and opportunity cost (run a zero-based budget); 2) stop all wasteful outflows (become and stay debt-free); and 3) steadily increase your inflows (set aside 10-20% of your budget for giving).
Second section discusses a framework for thinking about and adjusting the composition of your net worth, so that it grows consistently and sustainably over time.
If you own some Bitcoin and recognize yourself in any of the following statements, this guide is for you.
- You have read The Bitcoin Standard, The Fiat Standard and Principles of Economics.
- You've read Inventing Bitcoin and have at least a basic technical understanding about how the Bitcoin system works.
- You practice dollar-cost averaging into Bitcoin.
- You keep some Fiat as "dry-powder" for buying more Bitcoin on the price corrections.
- You attempted to grow your Bitcoin stack through trading, but ultimately decided you'd rather buy and hold.
- You have and use credit card(s).
- You have and use personal loan(s).
- You (sometimes) use line(s) of credit.
- Your checking account occasionally goes into overdraft.
- You have a mortgage.
- You have an auto loan or lease.
- You have student loan debt.
- You have used or plan to use a home equity line of credit.
- You are hesitant to spend your Bitcoin.
- You're (sort of) afraid to sell your Bitcoin in any significant amount.
- You believe there is a good debt and bad debt.
- If the opportunity presents itself, you'd probably take out a zero-interest loan and use it to buy more Bitcoin.
- You have a rough idea of how much money you make and spend, but you don't have exact figures.
- You plan for "retirement".
- You tried orange pilling your family and close friends, but they didn't take your advice as seriously as you would have liked.
- You are willing to allocate even more of your money to Bitcoin, but your partner/spouse is not really on the same page.
- You have a Fiat job, and don't have direct Bitcoin inflow streams.
- Because of Bitcoin's high volatility, you do not advise people to go all in.
- Sometimes you feel like you don't own enough Bitcoin.
- "Fiat is for spending, Bitcoin is for saving" sounds reasonable.
You might view your Bitcoin as a long-term investment, a piece of your retirement portfolio, or a "rainy day fund." Depending on your journey with Bitcoin and when your "get off zero" moment occurred, you may have a Bitcoin position that is large or small relative to your total net worth.
I'm assuming that you are still not using Bitcoin as your primary money. That is to say, your income is probably not all paid in Bitcoin, and you are likely not converting all your Fiat to Bitcoin immediately after the funds clear.
You're also likely not used to converting Bitcoin to Fiat to pay for your expenses on a regular basis. If you've been following Bitcoin for a while, you've probably considered it, but dismissed it due to Bitcoin's high purchasing power volatility. You may have tried to trade some of your Bitcoin during the bull market, and you may have felt FOMO (fear of missing out), as well as the opposite, being a bit uneasy of how low Bitcoin price can fall in a bear market.
You might have some credit obligations, such as a mortgage, car loan, a student loan or credit card balance. You don't want to be a "forced seller" of Bitcoin, so you're treading carefully when it comes to deciding how and when to invest in it. You think about Bitcoin as a "buy and hold" asset, instead of "exchange Fiat to Bitcoin money". And you kind of don't want to sell your Bitcoin because you know it's going up forever.
If you can recognize yourself in any of these statements, this guide is for you.
Using Bitcoin as your primary money is not only possible today but is the best way to use Bitcoin overall. This basically means "going all in on Bitcoin" and stopping using Fiat money as a hedge against Bitcoin volatility, altogether. It also means converting all of your current money substitutes, like real estate, stocks & bonds portfolios into Bitcoin.
This guide is also intended to dispel some of the myths that Bitcoiners who do not fully understand what it means to adopt the full Bitcoin standard propagate. One of the most often heard ones is that "you should never spend your Bitcoin". Another one I hear a lot is that Bitcoin is all about increasing the number of sats you own over time. Both of these myths arise from misunderstanding of concepts like opportunity cost and purchasing power, very similar to how many think their house "is going up in value" because it's fiat denominated price increased over time. The truth is that the house, like any other consumable good, is losing value as it is used and consumed; it simply takes longer to recognize the force of entropy at work. The fact that 20 year old house that has been used to live in has increased in Fiat denominated price is proof of Fiat loss of purchasing power, not increase in house value.
Similarly, when someone says "I'm never spending my Bitcoin" but then signs a four-year lease contract to buy a car that costs more than half of his total net worth and more than half of his yearly income, he is actually spending money that could have been converted into Bitcoin, and even worse, is doing so with his future money which is completely uncertain.
If someone has $1 in Bitcoin and $99 in Fiat and makes a $20 purchase, he has spent $20 worth of Bitcoin (at the time of purchase), regardless of whether he made payment from his $ balance. Because if he converted all of his $100 worth of purchasing power to Bitcoin and then decided to spend $20 of it, he would still have $80 worth of purchasing power in Bitcoin at the end.
Bitcoin is a very different kind of money from Fiat that we are used to. Since the launch of the Bitcoin network in January 2009, its purchasing power has increased significantly while that of Fiat has steadily declined.
You probably already know about the famous Bitcoin pizza transaction. In May 2010, Laszlo Hanyecz posted on the Bitcointalk.org forum wanting to purchase two pizzas (costing about $30) for 10,000 BTC, and someone actually delivered them for that price. At the time of writing this (April 2024), 1 bitcoin is worth about $66,915. So, 10,000 bitcoins, equivalent to about $669 million today, could buy around 45 million pizzas.
But this increase in purchasing power came with even more well-known volatility.
When I consider my overall experience since my "get off zero" moment (in July 2014, at around $600/BTC), the current Bitcoin exchange rate is over 110 times higher than my entry point, in just under 10 years.
I only began studying Bitcoin seriously in late 2017, as I mostly forgot about my initial Bitcoin purchase in summer of 2014 until then. I've witnessed Bitcoin price running up all the way to the peak of $20,000 in December 2017, and then dropping down to as low as $3,300 per BTC in November 2018, a retracement of almost 85 percent. Then I witnessed Bitcoin recovering all the way to around $12,000 in summer of 2019, dropping back to around $8-9k range. And then March of 2020 came in, the infamous COVID crash, that slashed the price almost in half (though for a short period), touching $4k-$5k range.
Then I witnessed 2020 halving, and Bitcoin following up all the way to around $60k in Spring of 2021 (1200% increase), then drop back down to around $30k during the Summer of 2021 (50% decrease), only to climb back up to almost $70k in November of 2021. Then I saw it go down again in 2022, all the way down to previous cycle all time high of $20k in Summer of 2022, and retrace down even more to $15k-$16k in November of 2022, which is a retracement of around 80 percent from its high point.
I'm currently looking at the $66,915/BTC price in March of 2024, which is roughly 1693% percent increase over the past five years I'm following it closely.
I've also heard a wide variety of recommendations and approaches for addressing Bitcoin volatility. Typical conservative advice was along the lines of "only buy Bitcoin with money you will not need for at least a couple of years" and "just buy a small amount every month: dollar-cost average."
The more aggressive approaches typically consisted of attempting to trade this volatility by purchasing Bitcoin at low prices and selling it at high prices. I believe that both of these approaches can be effective for some (although they both carry risks that are often overlooked), but there is a third approach that I rarely see but am personally doing for the past three years very effectively, which is to simply use Bitcoin as your primary money.
It means converting all of your current and incoming money to Bitcoin or making arrangements to be paid exclusively in Bitcoin (if possible). You do this regardless of the current exchange rate. Then, when it's time to pay for your expenses, which are typically denominated in your local Fiat, you exchange Bitcoin back into Fiat and pay (or, if possible, pay directly with Bitcoin).
Today, you can use a variety of services and exchanges, such as Bitcoin debit cards, which convert Bitcoin to Fiat at the time of purchase and pay the merchant in fiat. If you don't have access to this, you can still use Bitcoin as your primary money, but you'll need to plan your exchanges back to fiat money in advance. For instance, if you need to pay your rent in Fiat next week, you can simply convert the amount you need to pay from Bitcoin to Fiat couple of days in advance.
But in order to do this safely and effectively and embrace high Bitcoin volatility, you must first learn, implement, and consistently practice three money management principles: planning your money through zero-based budgeting practice, living debt-free, and consistently separating a part of your budget (10-20%) for giving. These timeless principles are founded on millennia of wisdom and are extremely important today, and even more so if you intend to use Bitcoin as your primary money because such a potent, but still largely misunderstood technology can have both extremely positive and extremely negative effects on your financial life. I'll go into details on why & how to practically implement each money management principle.
Bitcoin today, in my opinion, is comparable to electricity in its early years. Initially, most people were afraid of electricity because they did not know how to safely handle it. Most people today have at least heard of Bitcoin, but the vast majority still does not own any. An even smaller proportion of those who do actually use Bitcoin as their primary money.
We know that as people became accustomed to electricity, they learned proper ways to handle it safely and effectively, and so the technology spread all around the world. Today, we all teach young children not to approach electrical outlets while holding wet metal objects. We have installed overload and short-circuit protection in our homes and buildings. We are advised not to try and poke holes in our lithium-ion batteries, just to see what happens.
So today, a typical electricity user will not limit their electricity consumption to 1% of their power needs, as some Bitcoin investors do by allocating only 1% of their net worth to Bitcoin. Today's electricity users will not use electricity for only, say, two hours per month, as some Bitcoin users do today (they dollar-cost-average into Bitcoin with small amounts of money every month).
Instead, an average electricity user today will use as much electricity as they require because they understand how to operate electrical devices safely and effectively.
When you implement the timeless money management principles outlined in this guide, you will be able to use Bitcoin as your primary money to its full potential, just like you use electricity. Instead of fearing Bitcoin's volatility, you will have safety mechanisms in place. Instead of hedging against it, you will fully embrace it.
Instead of trying to predict the future exchange rate of Bitcoin and positioning yourself accordingly, you will completely flip the framework: you will learn to respond to changes in the purchasing power of Bitcoin (exchange rate) after they occur by reconciling and rebalancing your budget.
Instead of the "consume now, pay later" approach of the Fiat standard, you will eliminate debt from your life completely and learn the Bitcoin standard way of "pay now, consume later."
Instead of worrying about how you are going to increase your income, you will learn to practice setting aside a portion of your budget for giving, which will increase your capacity to earn money in unimaginable ways.
This manual has two sections.
The first section explains and discusses three fundamental principles of money management that you should implement and practice (as mentioned above: planning your money, living debt-free, and consistently setting aside a portion of your budget for giving). These principles are required, true, and relevant today, just as they were thousands of years ago when neither electricity nor Bitcoin existed. They will continue to hold true despite technological advancements thousands of years in the future.
The second section discusses how to start using Bitcoin as your primary money, assuming you have implemented the three fundamental money management principles. I'm going to show you how to think about Bitcoin as your cash balance which you are going to be budgeting, and regularly reconciling it's purchasing power and rebalacing your budget accordingly.
I'll also show you how you can balance the composition of your net worth using the rule of thirds. You will want to have at least a third of your net worth in cash balance (primarily Bitcoin). You will then look at your non-Bitcoin assets and view them as either part of Land (this refers to all assets you use in your leisure time), or Capital (this refers to all assets you use in your labor time, or use them to generate income).
I'll demonstrate why it's important to maintain both your Land and Capital to no more than one third of your total net worth each.
I'll show you how to rebalance your net worth during Bitcoin's bull and bear markets to ensure it's sustained growth.
You will also learn how to think about non-Bitcoin assets ownership and why & how to calculate the cost of ownership across time. This will enable you to decide wisely whether to buy or rent the asset.
If you've never heard of these concepts before, there is a lot to learn.
This manual is a work in progress, so please send any feedback you may have to [email protected]. If you want personalized advice, please use this link to schedule a call. If you would like to support this work, please use one of the following lightning addresses:
Alternatively, please use this Opennode link.
I hope you like reading this, and I encourage you to put the suggestions into practice in your life.
The Austrian school of economics defines money by its function: a medium of exchange.
People exchange goods and services with each other because they value them differently from each other. Exchanging goods and services directly quickly runs into a problem of double coincidence of wants.
For example, person A has an abundance of oranges and person B has an abundance of apples. A would like to trade some of his oranges for apples, and B would like to trade some of his apples for oranges. They'll carry out an exchange that benefits them both in the end. A and B value what they have more after the exchange than before the exchange, so the exchange is mutually beneficial.
Subjective value is increased for all parties involved in a voluntary exchange.
For instance, Person A has an abundance of oranges, while Person B has an abundance of apples. Person B prefers to exchange his apples for bananas instead of oranges, while Person A would like to exchange some of his oranges for apples.
By using a medium of exchange, we are able to solve the problem of double coincidence of wants. For example, if person A finds someone to exchange his oranges for bananas, only to then exchange bananas for apples with person B, person A used bananas as a medium of exchange. In other words, A obtained bananas not because he wanted them, but because he intended to exchange them for what he truly wanted, which was apples. In this scenario, A used bananas as a medium of exchange, or money.
Anything can serve as a means of exchange or money, but some goods are more effective at doing so than others.
The effectiveness of a medium of exchange / money can be measured in terms of its salability (marketability, how easy / difficult it is to exchange for what we actually want).
Salability can be measured with respect to four distinct dimensions: time, space, scales, and goods.
Salability over time is the degree to which a good used as a medium of exchange increases or decreases in value over the interval of time between exchange.
Most people understand that government-issued fiat money loses purchasing power / value over time.
This is why they use a variety of mediums of exchange / money that have a higher salability over time than government-issued fiat currencies. Some examples include government bonds, stocks, real estate, precious metals, and artwork.
Due to its fixed supply issuance schedule, which caps at 21 million units until the year 2140, Bitcoin has greater salability over time.
Salability across space is the degree to which the object being exchanged has a value increase or decrease over the unit of space between exchanges.
To move money across space, most people use electronic bank transfers.
The cost of performing the move can range from 0 to a few hundred USD, depending on the number of counterparties required.
It is possible to censor, stop, or reverse the flow of fiat across space.
Since fiat is issued through debt, its movement across space is never truly settled.
Because it can be sent anywhere with an Internet connection in a permissionless, censorship-resistant manner and make final settlement in a matter of hours for a relatively small mining fee relative to the transaction size it can support, Bitcoin has superior salability across space.
Salability across scales is the degree to which the value of an item used as a medium of exchange rises or falls with the size of the exchange. When it comes to small and large payments, Bitcoin is the best.
Salability across goods refers to the extent to which a given good or service is desired or recognized as such. Currently, government-issued fiat money is the most popular and widely accepted form of payment in most parts of the world, although Bitcoin is quickly gaining traction in this space. This is evident in the expanding number of exchanges, liquidity, and contracting bid-ask spreads between government-issued fiat currencies and Bitcoin.
After providing a functional definition of money, we will examine management best practices derived from millennia of experience.
I'll start by defining what money means in this manual so that it can be as helpful as possible to its readers. You should know this because you probably use some things as money that you wouldn't if Bitcoin was your primary money.
We humans are at the same time similar and different from other species in many ways. We are similar to other species in physical aspects. For example, we, like many other species are mammals, we have a pair of limbs, ten fingers on both hands, two eyes and two ears. We use our bodies to eat, drink, sleep, mate, and have bodily functions.
As much as we are similar physically, we are completely different from other species from a metaphysical or spiritual perspective. Bear in mind, the term "spiritual" is used here to refer to non-physical characteristics that cannot be measured like size, weight or volume. Here, "spiritual" refers to the intangible (metaphysical) parts of a human being, such as their accountability, discipline, patience, responsibility, generosity, optimism, kindness, loyalty, courage, perseverance, hope, resourcefulness, or creativity.
In this guide, you'll read about concepts like the "spirit of freedom," the "spirit of slavery," the "spirit of peace," etc. We're referring to these intangible human qualities that we can either foster and grow or stifle and eliminate.
Now, this is very important point: humans use money because while they are similar to each other physically, they can be completely different from one another spiritually. This is the reason people trade with each other -> because they value goods and services differently from each other. When we value things differently, we engage in exchange, beacuse after the exchange we are better off -> we end up with things we value more than whatever we exchanged for them.
So trade, and subsequently emergence of money is a uniquely human phenomenon, and its operation is primarily related to the spiritual realm. Animals do not save money, specialize in one area, or trade with one another. They don't use money and don't assign different values to the same good or service at different points in time or in different locations due to internal spiritual differences.
Trade encounters a significant challenge known as the "double coincidence of wants." This issue arises when A wants what B has, but B does not want what A has in return.
The solution to the problem of the double coincidence of wants is the introduction of a medium of exchange. A medium of exchange is anything that a person acquires with the sole intention of using it to exchange for something they really want to use or consume.
So, in our example, if B desires what C possesses, A may attempt to exchange what it has with C, only to then trade it with B. A is acquiring what C has, not because A intends to use it, but solely for the purpose of exchanging it with B. In this case, A used C item as a medium of exchange with B.
Over time, throughout a number of interactions like this, certain goods emerge as better mediums of exchange than others due to their better salability across time, space, and scale.
We define money as the most widely used medium of exchange. While anything can be used as money, some things prove to be more effective than others.
It's crucial to understand that all valuation occurs within our spiritual realm; there is no intrinsic value in physical objects. Our spiritual schematic, comprising all non-physical aspects, determines how we value things.
In essence, money is actually spiritual phenomenon when it comes to how humans exchange goods and services with one another. The physical objects we use as money, such as coins and bills, are like carriers or symbols for this value in the physical world. There is nothing inherent in physical objects that makes them money. They are used and recognized as money by human beings.
A gold bar lying on the ground next to a fisherman on the shore is of no value to a seagull. A seagull is considerably more interested in the fish the fisherman catches. The gold bar, however, is more valuable to the fisherman than the fish because he knows he can exchange it for fish or anything else he might want in the future from other people.
This manual is designed to impart wisdom on how to alter our spiritual schematic to become more adept at using money. Remember, we can use anything as money, but I will argue that Bitcoin is the most effective tool for money in today's world.
Think of this manual as a guide on cultivating a "spiritual money tree" with three components: roots (zero-based budgeting), trunk and branches (becoming and remaining debt-free), and leaves and fruits (establishing a giving practice). Alternatively, you can envision it as a blueprint for constructing a house, with the foundation being zero-based budgeting, the base ensuring freedom from debt, and the visible structure establishing a giving practice.
- Zero-Based Budgeting: This practice grants us full control over our money by determining its opportunity cost and managing it in the dimension of time.
- Becoming and Staying Debt-Free: This involves eliminating wasteful outflows, which often result from misjudged valuations, by replacing credit spending with cash spending. This stops the growth of the spirits of slavery, restlesness and confusion and fosters growth of the spirits of freedom, peace and clarity.
- Establishing a Giving Practice: This step is focused on increasing our inflows. By practicing giving, we nurture the spirit of generosity while preventing the growth of the spirit of stinginess. This, in turn, opens up more opportunities to grow our inflows.
It is critical to understand that money is a medium of exchange and that anything can be used as such.
Do you know someone who "invests in real estate," that is, buys properties not to live in or rent out but rather to "store value," with the goal of later selling them for a higher price than they paid for them? If that's the case, then this person is using real estate as money.
Some of the most popular instruments that people around the world use as money include banknotes, coins, fiat bank checking accounts, fiat bank savings accounts, credit, government bonds, corporate bonds, stock index funds, mutual funds, precious metals, art, real estate, altcoins, stablecoins...
The goal of this guide is to help you get ready to use Bitcoin as your primary money and give you the tools you need to do so. This doesn't mean you'll never use any other kind of money again. There is a good chance that you reside in an area where most people use government-issued fiat currency as their primary means of exchange.
But this doesn't mean you can't use Bitcoin as your main form of money. It just means that for most of your daily spending, you'll need to exchange bitcoin for your local government's fiat currency. On the other hand, you can convert any income you make, regardless of the currency in which it is paid to you, into Bitcoin.
If you follow the recommendations provided in this guide, you won't need to "hedge Bitcoin's volatility" anymore, and you won't think of bitcoin as a long term illiquid investment that you "don't touch". Instead, you will learn to treat it as your primary cash balance, which means you will frequently convert from fiat to Bitcoin and back, depending on your goals.
I first heard about Bitcoin in 2012 but didn't find it interesting. I thought it was just some digital currency for gamers. I found out in 2013 that the FBI shut down Silk Road, the place where they used Bitcoin for buying and selling. The U.S. government's involvement added to my level of interest. It showed that Bitcoin wasn't just a code that could be changed by its creators, but was actually used in real commerce. Illegal, but real.
I considered buying Bitcoin in 2013, but wiring money from Croatia to Japan's Mt. Gox exchange was just too complicated, so I ditched the idea. And then I remember reading in 2014 that Mt. Gox was gone and shut down.
My entrepreneurial pursuits took a backseat during the summer of 2014 as I experienced burnout and needed to take a break. I was just taking it easy, not really paying attention to much. At that time, I found a Lynda.com tutorial called "Up And Running With Bitcoin" that gave an in-depth explanation of how to use Bitcoin. I got Bitcoin Core up and running and was ready to send and receive my first Bitcoin transaction.
As I was reading more about it, I realized the network was still operational even after the shutdown of Silk Road and the bankruptcy of Mt. Gox exchange. So I decided I’ll definitely try to get some Bitcoin to experiment with this time. Fortunately, where I live in Croatia, there was a small Bitcoin exchange that was just getting started when I purchased around $20 worth of Bitcoin in July 2014. Bitcoin exchange rate was around $600 per BTC at the time.
After receiving my first Bitcoin transaction from the exchange, I researched it further on Bitcointalk.org forums, but as summer drew to a close, my attention shifted back to my entrepreneurial venture. By the time the winter of 2014 rolled around, I had practically forgotten about my Bitcoin experiment as I became increasingly preoccupied with work.
It wasn’t until late 2017 that I suddenly realized Bitcoin was trading above $15,000 per BTC, whereas I distinctly recall purchasing it for around $600 per BTC. This was the moment that made me become so fascinated by the phenomenon, and I think of it as the start of my journey down the rabbit hole.
Fortunately, I had very little time to get exposed to altcoins, and starting in 2018, I entered my first real Bitcoin bear market. It was when I read “The Bitcoin Standard” by Saifedean Ammous that I understood the basics of the monetary economics, the difference between hard and easy money, stock to flow, salability, and the problems money actually solves. I stopped analyzing altcoins from the perspective of their marketing narratives, and learned to look at them through Austrian economics lens.
All of this occurred during the 2018 bear market, and by mid-year, I also parted ways with the startup I co-founded. This meant my regular inflows from the startup stopped. I felt the need to learn how to manage my budget since my savings were getting depleted, while income became irregular. I discovered the Dave Ramsey Show and his teachings on why people should get out of debt. I was listening to hundreds of stories about how people’s lives got ruined by debt. I grew convinced that my previous stance on debt was wrong, both in my personal and business life. I started budgeting my money, and by the end of 2018, I cleared all of my debt.
By the end of 2018, I also sold all the altcoins I was experimenting with and decided I'll focus on Bitcoin-only. Throughout 2019, I did some freelance work while studying Bitcoin. I made my first Bitcoin presentations at my former university and conducted some workshops in the small town of Rab, where I now live. There wasn’t much interest from the public, but I slowly connected with a couple of Bitcoiners from Croatia. I spent most of my time listening to Bitcoin podcasts, reading Bitcoin Twitter, and trying to find people I could talk to about Bitcoin.
It was in the summer of 2020 when I started working in the Bitcoin industry by connecting with Saifedean Ammous, author of The Bitcoin Standard. I started out by helping him fix some issues he had on his website. We continued working together in a larger capacity from then on. I learned more about economics and Bitcoin by working on his online courses, seminars, podcasts and books.
This was also the first time I earned Bitcoin directly. Around the time Bitcoin broke it’s all-time high in late autumn 2020, I ran out of fiat money. Both my income and savings were all in Bitcoin. I had a bit of fiat inflows, but I spent these first, and I had no choice but to learn how to live on full Bitcoin standard. I still had expenses in my daily life, but my Bitcoin income and savings simply grew faster than my expenses. So I started treating Bitcoin as my cash balance, which means I started spending it just as I would spend my fiat.
I was already consistent in budgeting, completely debt-free, and had established giving practice. When I switched my cash balance from fiat to Bitcoin, all I had to do in my budget was practice a regular “purchasing power reconciliation.” Once I started doing that, things went smoothly.
During the bull run in early 2021, I naturally made some significant expenditures because I was hitting my savings goals because bitcoin was going up so much. I also put money into my business by investing in a new office space and equipping it with the tech I needed to get more done. I also replaced all of my consumer electronics and bought a new scooter to get around the island. I took several brief vacations & trips, all of which were paid for with Bitcoin.
In the latter part of 2021, state COVID lockdowns and attacks against basic freedom intensified in my local community. My budget for giving expanded due to Bitcoin appreciation, and I felt compelled to provide financial help to some people I knew had their livelihoods threatened. It was then that I fully realized Bitcoin's potential as money that cannot be censored. I was helping locals, who were protesting state oppression daily, to begin their journey with Bitcoin. I also helped them continue the resistance. If I wasn't all in on Bitcoin, I'm sure would have been much more careful about what I expressed. I’d feel too vulnerable to lose access to my money, like people who protested the COVID regime in Canada.
I connected with Bitcoiners from Germany and Austria, who were seeking to leave their oppressive state regimes. I helped some of them move to where I live. All of this led to me organizing Bitcoiner’s gathering in Rab in the spring of 2022. We formed “Dvadesetjedan” group, which is an open Bitcoin-only group for the Balkans region. This idea came from “Einundzwanzig”, a German Bitcoin network, and now it's part of the “Twenty One World”. By hosting a weekly podcast in my local language, I could both teach and learn about the many ideas within the Bitcoin space.
My overall expense rate in 2022 was lower because I had already incurred most of my budgeted major expenses in 2021. This was fantastic because Bitcoin was approaching a bear market around the early stages of summer in 2022. I responded naturally by cutting down expenses and raising income, which led to an increase in my Bitcoin savings rate.
As the bear market progressed, I saw that the Bitcoiners I was following decreased their Bitcoin purchases. Most were almost seeking for reasons to become more bearish on Bitcoin. This was especially clear in the summer of 2022, when the Bitcoin price dropped below its 200-week moving average and stayed there for over 6 months. It was the time when I was accumulating Bitcoin at the highest rate in my life, while most other Bitcoiners were slowing down or even stopping. Many were trying to time the market and buy Bitcoin at its absolute lowest price, which happened in November 2022 when the price reached roughly $15,000. But I remember nearly every Bitcoiner expecting it would drop to $12k or lower. Many missed the absolute bottom, while my all-in Bitcoin approach was picking up the bottom at the highest possible rate.
I was doing my best to explain what I was doing by living on a full Bitcoin standard on our weekly Dvadesetjedan Bitcoin podcast. I started writing notes that would eventually become this manual. After a bull and bear market on full Bitcoin standard, I now know that this is the best way to handle Bitcoin volatility. In the bull market, I spent more, which led to a decrease in my expense rate during the bear market. During the bear market, I decreased my spending and increased my earnings, resulting in greater accumulation. Even though I wasn't really thinking about what the price was going to do in the future, I was still doing better than the best traders I knew. I just kept readjusting my budget and spending as needed.
Learning how to live on a full Bitcoin standard is like learning to ride a bike. You'll only have to learn it once, and you'll never forget. I wrote this guide to help you, a regular Bitcoiner who still lives one foot in the Fiat world, to completely upgrade to full Bitcoin standard. This is the way all of us are going to embrace eventually. You have the opportunity to do it now.
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