My first foray into Bitcoin was back in 2012. I managed to snag 1.5 Bitcoins (BTC) for a price of about $65 USD at the insistence of a friend who was mining 5 BTC a month. He was also using his Bitcoin as well on the internet to pay for goods and services.
Being a poor student at the time, I was reluctant to invest any money in something so…new. This is still a hang up for most people and is entirely reasonable. During 2012, we were coming out of another election cycle, plus there was an awful lot of controversy regarding Edward Snowden and the revelations he brought to light. Many were concerned about their privacy online and protecting it from prying eyes. VPNs started to make an appearance as a solution to protect your privacy. These can also be purchased with bitcoins.
This is what I ended up doing with my BTC. I watched the value go up and down, on MT-GOX. There was constant talk of how each crash was “the end of BTC” and then deafening silence when it would rebound.
What was most interesting, was how Bitcoin fluctuated, it seemed every few weeks or so once BTC peaked, it crashed by about half, regained its value and then some. When I felt like it was time, I cashed in with a VPN. Mullvad was the service I chose, and it was a positive experience for me.
My Bitcoin increased enough in value, and my purchasing power went up as well. I was able to get a year and a half subscription with .75 BTC, and I decided to spend it all after another spike to extend my subscription to three and a half years with the remaining .75BTC. Three and a half years of a Mullvad subscription is five euros, and in total that would be about 210 euros for that time. My initial investment of $65 appreciated enough to almost quadruple my purchasing power in less than a year; this is a win in my book.
My VPN came in handy especially when traveling abroad (Asia) to access websites. I also got the chance to see for myself what it is like to use a cryptocurrency. I could dwell on “if I only kept those BTCs!” but I don’t. I am not averse to getting involved in cryptocurrencies in the future. More than ever, people are creating their blockchains and the opportunity is growing.
Now, you might be questioning getting into BTC, and that is prudent. My big hang up is using dollars to invest in cryptocurrencies. I could use these dollars in real life more efficiently and conveniently than BTCs. I would recommend anyone who is going to invest in BTC, or any crypto, is to — USE it so you know it works and comfortable with the technology.
If I put dollars into the digital economy, they are more or less stuck there. If I wanted to exit, surely some fees would be charged, which is OK I guess. Everyone has to make money. But I am very suspicious of lots of exchanges (like Coinbase, Bittrex, Kraken, and BTC-e) because there is no accountability or oversight.
If you have been in the game long enough, you might remember the MTGox debacle. Something like this can still happen in the future with the “exchanges” around today. If you are considering getting into cryptocurrencies, I believe the best ways to do so are:
- 1) Create your own blockchain
- 2) Create your own mining pool(s)
- 3) Create your own exchange platform.
By creating your own blockchain, you are creating your own cryptocurrency and can control it. It will take some to establish a value, but it may be worth it. Mining pools are another great way to get into the game.
By mining, you are harvesting currency from the web instead of buying it from an exchange. You will usually be subject to a 1% fee from the owner of the mining pool and if you create your OWN mining pool, then you can charge a percentage from all the people who use it to mine currency.
If you create an exchange platform or website, then you can facilitate P2P transactions for cryptocurrencies or reliable wallet software and charge fees for such services.
These three strategies are most ideal, in my opinion, because you are taking control of your own currency and if you market it right there could be profitable returns. Creating your own platforms and mining pools also gives you control and stability in this growing digital economy, that doesn’t have to be in your own blockchain either. There are dozens of options: Ethereum, Ethereum Classic, Dogecoin, Ripple, etc.
I believe it is important to let go of the past. If you are holding onto something that happened more than two years ago, then you need to talk to someone, just something to keep in mind for all you speculators or new investors out there. Just think about the guy who bought a pizza with 10,000 Bitcoins, at least you’re not him.