Don't Stack without Studying
Understanding Bitcoin is more important than owning it. The understanding for the issues surrounding us can be critical in the years to come. I know I keep on saying stack sats, I say that because I believe that having Bitcoin enables you to remove yourself from the equation when it comes to silent taxation, which inflation is. I have talked about inflation in several other issues in this blog so if you're not entirely clear on the concept of inflation being a form of hidden taxation and expropriation then I recommend diving a bit deeper into my blog.
Once you understand why Bitcoin is important you can find a strategy for yourself that protects you against inflation. Personally I go with "stay humble and stack sats" as my strategy and most people who I know and follow with regards to Bitcoin have gone with that strategy. Bitcoin targets several issues and depending on which problem you value the most you might take a different route which might be just as effective depending on your personal goals. For example, you want to hedge against monetary inflation over just a couple of months and you live in Argentina, Turkey, Lebanon or any other high inflation country, you will find that it's probably better to insure yourself using the dollar instead of Bitcoin. If your horizon shifts from <1 year to several years Bitcoin will come into the mix. Because if we look at inflation over a period of let's say 5 years even the dollar does not look good anymore and Bitcoin has had better performances when considered on longer time horizons. Bitcoin is not a panacea! Which is why it is important to understand Bitcoin, understand which problems it is best suited to fix and which problems it is terrible at fixing. People who just go and buy Bitcoin will enter the space thinking "This will alleviate all my problems and I will become rich". This is a financially fatal blunder. Without understanding the volatility and the other mechanics which will drive and suppress Bitcoin you will most likely end up loosing a lot of your Stack.
One major way people, and also I, have lost significant chunks of their Bitcoin stacks is through trading, both garbage coins and Bitcoin. I have lost a lot of Satoshis through trading in my early days in the crypto space. Promises of the new Bitcoin killer or another revolutionary technology which was basically funding for a startup disguised as a new currency. Another way how people end up loosing their coins is through the wrong custody solutions. There are lending platforms, exchanges and other custodians out there which rarely do a good job at securing your coins. Many of these custodians have been hacked or gone bust in spectacular fashion. In "Not Your Keys not Your Coins" I have elaborated more on the topic of custody. Anyways, those are the main ways how you can loose money if you don't understand the Bitcoin fundamentals. I want to advise everybody who reads this to try to understand what Bitcoin is about. I've spent countless hours informing myself on Bitcoin and I now feel like I'm getting a solid grasp of the situation. It will take time as Bitcoin extends into so many different fields. Of course you don't have to spend years studying Bitcoin before buying some Satoshis but just be advised that you should keep on trying to get a good grasp on the mechanics at force in Bitcoin. There are some basic mechanics that everybody should know who is involved with Bitcoin in order to avoid serious errors. The topics I go through in this blog cover these basics.
So what I want to say is that you should try to understand Bitcoin to your best ability in order to avoid some common pitfalls where others before you have already lost a lot their Bitcoin stack. I will close a bit differently today with. Stay humble, stack sats and keep studying.
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