First Experience With Cryptocurrency [What Is Bitcoin]

When I was 20 years old, I did not have any interest in markets, stocks, bonds or really any financial instruments. I did not have a lot of money to play with either, so why would I? Although, one thing I have always been interested in was making money through alternative means or passive income. So here is my story on, my first experience with cryptocurrency.

Why Bitcoin?

Around 20, I heard about a digital currency that had crashed after multiplying up to $1,000 from mere cents. What was this strange digital asset that people were freaking out about I thought? After some researching and a few long nights of Youtube videos, I had discovered Bitcoin for the first time in March 2014 and it hooked me.

Even after youtube videos, studying and talking to a few friends, I still had no idea what Bitcoin really was.

I kept thinking to myself, “What is Bitcoin?”

Why are people freaking out about it? Why are people investing in a fake currency that will probably disappear after a few years anyways?

To answer these questions, I learned more. The next year and a half consisted of studying and recording the market prices of this allusive asset.

I used a journal every morning to record a few things:

The time I woke up (Usually around 7am)
What I ate for breakfast (2 eggs + protein shake)
If I made my bed (First part of a successful day is making your bed)
If I worked out (Got to stay in shape to stay healthy)
And of course the price of Bitcoin. (Between $500 and $800 during this time period)

I like to keep a record of my days and hold myself accountable. Discipline works best for me, so I made a point to invest a part of everyday. This was the only was I would start to understand this new asset class. That’s what I did for the next couple of years.

Eventually, I finally started to realize what Bitcoin really was. What is Bitcoin?

It is not just a digital currency like I thought, it was so much more. It had an underlying code base called the blockchain. This Blockchain structure was used to store data including the transactions and authenticate itself through a process called consensus. Consensus was achieved through a system called Proof of Work (POW). Proof of work simply means that people around the world run their computers on the bitcoin protocol (software or network) and are randomly chosen to confirm transactions through algorithms. These algorithms get harder and harder as the network grows (more computers join) and as time progresses, the amount of Bitcoin awarded for complementing these algorithms decreases. These decreases happen over 4 year intervals until 2140 and all 21 million Bitcoins are released. What happens after that? Well.. we are unsure but the good news is that is a ways away.

Why Is Bitcoin Important?

Before I could convince myself to invest, I had to answer all of my questions that were burning in my head. The next question I solved was, why is this important?

Bitcoin became important because it was the only decentralized currency on the market back in 2008 and for the next couple of years following. Bitcoin promotes anonymity to the users and a veritably provable ledger that can not be tampered with or altered due to the blockchain. This solved a well known “double spend” problem where people sent money to one place, and before the ledger is updated, they spent the same money else where. With Bitcoin, that is impossible. Also, no country or independent source controls Bitcoin or can control it.

This gives it immense intrinsic valuable as almost a hedge against the world market as a commodity. Additionally, it is very liquid-able as grows and gains adoption. Slowly as Bitcoin is adopted, the decoupling from the world will grow less and less until it is the very pinnacle of how the world predicts and assesses the digital market place.

Time to Invest In Bitcoin

Once I realized the potential of this asset and started to research others, I knew I had to have some. A simple college student with knowledge of supply and demand could reason that as it gains adoptions, less and less Bitcoin will be produced. Gather that information with the knowledge that Satoshi, the original creator has 1 million locked up and people are constantly losing Bitcoin or getting is hacked and frozen, that does not leave a large supply long-term for the late comers. I gathered some money and decided to sign up for Gemini and Coinbase. Two of the exchanges I had heard about from friends. Free to sign up and yet to have a hack? Sign me up.

Little did I know that 2 years into my crypto journey, I would stop short of investing. Both Coinbase and Gemini were relatively new and had horrible procedures for new members. In order to establish my new account I had to:

Sign up my email and phone number
Authenticate both sources
Prove my identity with a video call and state my name and purpose for the account
Link my bank information and enable deposits and withdraws (this was terrifying)
Complete a KYC with my drivers license and my personal information
Communicate and figure out the process with a service representative

On top of this process, it took over 4 weeks for any response or information about my new account or when I could start to purchase Bitcoin. After waiting 4 weeks, I had decided maybe I was just being silly.

Get an account early was hard

It took over 4 weeks to even get a decent response or update on my account. It took 8 weeks in total for my account to be able to purchase Bitcoin. By that time, I was sure I had been scammed out of my information or simply this was all a joke. Maybe, I am not supposed to invest I thought? Maybe this was a sign. I spoke with my grandfather who was a stockbroker and financial planner for years. He convinced me that it was not worth the risk.

“There’s no way to tell if it will go up or down.” He said. “Either way, always expect the market to take up to 3 years to recover. It can always take more, but it will usually be less.”

He was a wise man and passed away from lung cancer before he could see Bitcoin reach its full potential. He always encouraged me on my dreams and passions.

It was Time to Invest

Additionally for the next couple of years, I kept up with the market. I would track the price of Bitcoin in my journal daily, attend meetups in my local community once a month and I even tried to launch a startup in the space in early 2018. Most importantly, I decided to invest into the ever exciting world of cryptocurrency in 2017. I did not time it perfectly, but I was close enough. Today my assets are not worth what they were in that time. Although, not many are.

Finally after all of that waiting, all of that preparation, and all of that patience, I was investing into the market I had grown to know so well. Some of the things I purchased, I still have today:

Bitcoin (grandfather Bitcoin)
Ethereum (I heard there was free kittens)
XRP (My first accurate prediction of this market for an asset)
Cardano (In Charles we trust)
IOTA (I got tangled up in it)
NANO (Formally Raiblocks)
QTUM (Because.. space duh)
Bluzelle (Data storage token with a bright group)
Sharder (Another data storage token out of China that is alittle less known.)

What I Have Learned

Today the market is recovering from a prolonged bear market. Instead of shorting, I took the strategy to dollar cost average in (DCA) and ride out the wave. My portfolio is quite nice and if the market returns to highs, then I should be able to comfortably purchase a house with my investments. There is no rush, I understand good things take time, and I am willing to wait.

From being in the market this long, I have learned that you are almost never right. The market is a wild beast dictated by whales, media and of course fud. Regardless, the market is at a steady increasing trend since 2008. It is clear that the path is up, there may just been some hills and valleys along the way. From listening to people argue about BCH vs BTC vs BCHSV to ETH getting hacked for the 12th time, there is always something to laugh at and enjoy. I have learned not to take life too seriously or the market for that matter. You win some and you lose some.

Finally just remember, we are all going to the same place. To the moon.