The Purpose
draft
This GitBook is a practical guide to using Bitcoin as everyday money. It shows you how to move beyond treating Bitcoin as just a long-term investment and start using it as your main tool for saving and spending. You'll learn how to gradually shift your finances to Bitcoin—how to convert your savings, cover daily expenses, and deal with price volatility.
The guide is divided into two main sections:
1. Money Management Wisdom Take full control of your money with zero-based budgeting, eliminate wasteful spending, and achieve lasting financial freedom by becoming completely debt-free. Learn how regularly setting aside 10–20% of your income for giving can also increase your capacity to earn more.
2. Bitcoin and Your Net Worth Gain a practical framework for managing your entire net worth under a full Bitcoin standard. This section is built around three core components: Money, Consumption, and Capital. It introduces the “rule of thirds,” which recommends holding:
At least one-third of your net worth in Money (Bitcoin),
No more than one-third in Consumption (everyday living expenses and personal-use assets),
No more than one-third in Capital (businesses, investments, or long-term productive assets).
To fully transition to a Bitcoin standard, follow these steps in order:
Practice mindful money management through zero-based budgeting.
Eliminate all debt and remain completely debt-free.
Regularly allocate 10–20% of your money to giving.
Evaluate and rebalance your net worth using the rule of thirds—and aim to maintain that balance over the long term.
Who Is This Guide For?
This guide is designed to support Bitcoiners transitioning from a fiat standard (a debt-slavery alternative to human civilization) to a full Bitcoin standard. It draws on centuries-old wisdom about managing money, distilled and adapted for the 21st century.
If you already own Bitcoin and recognize yourself in any of the following statements, this guide is for you:
You practice dollar-cost averaging into Bitcoin.
You keep fiat as "dry powder" to buy more Bitcoin during price corrections.
You've tried growing your Bitcoin stack through trading but decided you'd rather buy and hold.
If you have and use any of the following: credit cards, personal loans, lines of credit, a mortgage, auto loans, student loan debt, or a home equity line of credit.
You are hesitant to spend your Bitcoin or afraid to sell it in any significant amount.
You believe there's such a thing as good debt and bad debt, and you'd consider taking out a zero-interest loan to buy more Bitcoin.
You have a rough idea of your income and expenses, but you don't know the exact numbers.
You have tried orange-pilling your family and friends, but they didn't take your advice as seriously as you'd hoped.
You're willing to allocate more of your money to Bitcoin, but your partner or spouse isn't fully on board.
You have a fiat job and don't have direct Bitcoin income streams.
You'd like to increase your total income, but you are not 100% sure how to go about it.
You plan for retirement and find yourself wondering how much Bitcoin you would need to own so you don’t have to work.
Because of Bitcoin's high volatility, you don't advise newbies to go all in.
Sometimes, you feel like you don't have enough Bitcoin.
"Fiat is for spending, Bitcoin is for saving" sounds reasonable to you.
"Never sell your Bitcoin." sounds reasonable.
Bitcoin's Purchasing Power Volatility
Bitcoin is a completely different kind of money from what most people are used to. Since it was created in 2009, its value has grown tremendously, especially compared to fiat money, which has steadily lost purchasing power over time. But this growth hasn’t been smooth—Bitcoin’s price has gone through major ups and downs, including multiple crashes of more than 80%. While these wild swings are becoming less extreme, using Bitcoin as everyday money still comes with big challenges.
One famous example from Bitcoin’s early days shows just how much things have changed. In May 2010, a programmer named Laszlo Hanyecz paid 10,000 BTC for two pizzas, worth about $30 at the time. Fast forward to May 2025, and with Bitcoin priced just over $100,000, those same 10,000 BTC would now be worth more than $1 billion—enough to buy thousands of full pizza businesses.
Since I first bought Bitcoin in July 2014, when it was around $600, the price has increased more than 160 times. Along the way, there have been several major crashes—but each time, the price has bounced back and eventually reached new highs.
Some examples of this volatility include:
In December 2017, Bitcoin peaked at $20,000, only to drop to $3,300 by November 2018 (an 85% drop).
In March 2020, during the COVID crash, Bitcoin briefly fell to $4,000 before recovering.
By November 2021, Bitcoin reached nearly $70,000, only to drop to $15,000 by late 2022 (an 80% drop).
As of May 2025, Bitcoin is trading at around $102,000, more than 1000% increase over the past five years.
This level of volatility can be very intimidating—especially for newcomers. People deal with it in different ways. Some take a cautious approach, only investing money they won’t need for years and steadily buying small amounts over time through dollar-cost averaging. Others try to take advantage of the ups and downs by trading—buying low and selling high.
But I found a different path to be the most effective: simply using Bitcoin as your primary form of money.
Using Bitcoin as Your Primary Money
Using Bitcoin as your primary money means converting all of your income and savings into Bitcoin, and getting paid in Bitcoin whenever possible. This approach doesn’t depend on the current exchange rate—you treat Bitcoin as your base currency. When it’s time to cover expenses, which are usually priced in fiat, you simply convert the amount of Bitcoin you need back into fiat to make the payment—or pay directly in Bitcoin if the merchant accepts it.
Today, tools like Bitcoin debit cards make this process more convenient by automatically converting Bitcoin to fiat at the time of purchase. But even without these services, it’s still manageable with a bit of planning. For example, if your rent is due next week and must be paid in fiat, you can convert just enough Bitcoin a few days beforehand to cover it.
To use Bitcoin as your primary money effectively and safely, it’s important to follow three core money management principles:
Zero-based budgeting – Assign a purpose to all of your money by dividing it into categories, and track all inflows and outflows consistently.
Living debt-free – Avoid or eliminate debt so you're not financially overextended.
Setting aside 10–20% for giving – This timeless habit encourages generosity and, interestingly, often helps people grow their capacity to earn.
These principles become even more important when you're operating on a Bitcoin standard. Bitcoin is a powerful, but often misunderstood, form of money—and without strong financial habits, its price swings can either work for you or against you.
Bitcoin: A Powerful Technology in Its Early Phase
In 2025, Bitcoin is a lot like electricity in its early days. When electricity was first introduced, many people were afraid of it simply because they didn’t yet understand how to use it safely. But as society learned to manage it—with tools like insulation and circuit breakers—it became a transformative force in everyday life.
Bitcoin is following a similar path. Most people have heard of it, but only a small percentage actually own any, and even fewer use it as their primary money. Like early electricity, Bitcoin can seem risky at first. But with the right financial tools and habits, you can harness its power safely and effectively.
By applying the money management principles outlined in this guide, you’ll be able to tap into Bitcoin’s full potential. Rather than fearing its price swings, you’ll learn to work with them. Instead of guessing what Bitcoin might be worth tomorrow, you'll focus on adjusting your budget as its purchasing power shifts.
You’ll also move away from the fiat mindset of “consume now, pay later,” and adopt the Bitcoin standard of “pay now, consume later.” This shift—combined with living debt-free and practicing generosity—not only strengthens your financial foundation but also opens the door to greater earning potential and long-term wealth.
Feedback and Support
This guide is a work in progress, and I welcome your feedback. If you have any suggestions or questions, please feel free to email me at pavao@hey.com.
For personalized advice, you can schedule a call using this link.
If you’d like to support this work, you can use the included Lightning address or this link.
I hope you find this guide helpful and I encourage you to put its suggestions into practice.
Last updated