The Purpose
The goal of this guide is to help you upgrade to a full Bitcoin standard. This means converting everything you still use, even partially, as a store of value—whether it's a regular bank savings account, money market fund, stock or bond index fund, precious metals, or even real estate—into Bitcoin. It also involves converting all of your income into Bitcoin and becoming accustomed to regularly spending Bitcoin. This way, you are effectively using Bitcoin as your primary money and keeping only very small amounts of fiat on hand, just to be able to complete near-term payments where Bitcoin isn't accepted directly.
If you have access to a Bitcoin exchange, you can adopt a full Bitcoin standard today. However, due to Bitcoin's high purchasing power volatility, I suggest that you apply the practices explained in this guide before doing so.
The guide is divided into two sections: 'Money Management Wisdom' and 'Bitcoin and Your Net Worth.'
The first section, 'Money Management Wisdom' explains:
How to gain full control of your money in terms of time and opportunity cost by running a zero-based budget.
Why and how to eliminate all wasteful spending by becoming and remaining 100% debt-free.
How to steadily increase your capacity for generating income by consistently setting aside 10-20% of your budget for giving.
The second section, 'Bitcoin and Your Net Worth. presents a framework for maintaining your net worth balance on a full Bitcoin standard. It will show you how to view your net worth as consisting of three components: 1) money, 2) consumption and 3) capital.
Then, it will encourage you to follow the "rule of thirds," which suggests: 1) keeping at least one-third of your net worth in money (Bitcoin), 2) allocating no more than one-third of your net worth to consumption goods or assets, and 3) allocating no more than one-third of your net worth to capital (production) goods or assets.
I recommend going through this guide and implementing it step by step. This means you first implement zero-based budgeting practice, then eliminate all debt from your balance sheet, and finally, adopt the practice keeping 10%-20% of your budget assigned for giving.
At this point, review the composition of your net worth and adjust it accordingly. This may mean liquidating parts of your net worth and converting that purchasing power to Bitcoin to achieve balance according to the rule of thirds. After that, you simply continue following the practices in the guide to maintain balance in the future. The more time you spend doing this, the better you will become at it.
Who is this guide for?
This guide is written for bitcoiners transitioning from a Fiat standard to a full Bitcoin standard and are facing various challenges and decisions during the process.
Are you afraid to sell Bitcoin? Are you bothered by high volatility? Do you have debt? Is your spouse not really on the same page as you? Are you wondering how you can make more money in general?
If you already own Bitcoin and recognize yourself in any of the following statements, this guide is for you:
You have already read The Bitcoin Standard, The Fiat Standard and Principles of Economics.
You've read Inventing Bitcoin and have a basic technical understanding about how the Bitcoin system works.
You practice dollar-cost averaging into Bitcoin.
You keep some fiat currency as "dry powder" for buying more Bitcoin during 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 cards.
You have and use personal loans.
You (sometimes) use lines 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.
Bitcoin's Purchasing Power Volatility
Bitcoin is a very different kind of money from what we are used to. Since 2009, its purchasing power has increased millions of times, while that of fiat currency has steadily declined. However, the process was extremely volatile along the way, with multiple price crashes of over 80% followed by massive rallies. While price volatility is decreasing over time, using Bitcoin as your primary money still presents significant challenges.
You probably already heard 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 (November 2024), 1 Bitcoin is worth about $90,000. So, 10,000 Bitcoins, equivalent to about $900 million today, could buy over 60 million pizzas.
But this increase in purchasing power has come with even more well-known volatility. Since my "get off zero" moment in July 2014, at around $600/BTC, the current Bitcoin exchange rate is over 100 times higher than my entry point, in just over 10 years.
I only began studying Bitcoin seriously in late 2017, as I mostly forgot about my initial Bitcoin purchase in the summer of 2014 until then. I've witnessed Bitcoin’s price run up to a peak of $20,000 in December 2017 and then drop to as low as $3,300 per BTC in November 2018, a retracement of almost 85 percent. Then I saw Bitcoin recover to around $12,000 in the summer of 2019, only to drop back to around the $8-9k range.
In March 2020, the infamous COVID crash slashed the price almost in half (though for a short period), touching the $4-5k range. Then I witnessed the 2020 halving and Bitcoin's climb to around $60k in the spring of 2021 (a 1200% increase), followed by a drop to around $30k in the summer of 2021 (a 50% decrease), and another climb to almost $70k in November 2021. It then went down again in 2022, reaching the previous cycle's all-time high of $20k in the summer of 2022, and retracing further to $15-16k in November 2022, an approximately 80 percent drop from its high point.
I'm currently observing a $90,000/BTC price in November 2024, which is over 940 % increase over the past five years.
I've heard a wide variety of recommendations and approaches for addressing Bitcoin volatility. Typical conservative advice includes "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." More aggressive approaches involve attempting to trade this volatility by purchasing Bitcoin at low prices and selling it at high prices. While both approaches can be effective for some (though they carry risks that are often overlooked), there is a third approach that I rarely see but have personally found most effective over the past four years: using Bitcoin as your primary money.
This means converting all of your current and incoming money to Bitcoin and arranging 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 to complete payment (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 in advance. For instance, if you need to pay your rent in fiat next week, you can simply convert the amount you need from Bitcoin to fiat a couple of days in advance.
To do this safely and effectively and embrace Bitcoin's high volatility, you should consistently practice three money management principles: zero-based budgeting, living debt-free, and consistently setting aside a part of your budget (10-20%) for giving. These timeless principles are founded on millennia of wisdom and are extremely important today. They are even more critical 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.
Bitcoin Is a Powerful Technology in Its Early Adoption Phase
In my opinion, Bitcoin in 2024 is comparable to electricity in its early years. Initially, most people were afraid of electricity because they did not know how to handle it safely. Similarly, most people today have at least heard of Bitcoin, but the vast majority still do not own any. An even smaller proportion of those who do own Bitcoin actually use it as their primary money, or in other words, live on a full Bitcoin standard.
As people became more accustomed to electricity, they learned proper ways to handle it safely and effectively, leading to its widespread adoption. 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 poke holes in our lithium-ion batteries just to see what happens.
Today, a typical electricity user does not limit their consumption to 1% of their power needs, as some Bitcoin investors do by allocating only 1% of their net worth to Bitcoin. Likewise, electricity users do not use electricity for only a few hours per month, as some Bitcoin users do by dollar-cost averaging into Bitcoin with small amounts of money every month.
Instead, an average electricity user today uses 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 Bitcoin's purchasing power (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: planning your money, living debt-free, and consistently setting aside a portion of your budget for giving. These principles are as relevant today as they were thousands of years ago, long before the existence of electricity or Bitcoin. 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 will show you how to think about Bitcoin as your cash balance, which you will budget and regularly reconcile in terms of its purchasing power, rebalancing your budget accordingly.
I will also show you how to 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 / money (primarily Bitcoin). Then, you will look at your non-Bitcoin assets and categorize them as either consumption (assets / goods used in your leisure time) or capital (assets / goods used in your labor time or to generate income).
I will demonstrate why it's important to maintain both your consumption goods and capital goods to no more than one-third of your total net worth each. I will show you how to rebalance your net worth during Bitcoin's bull and bear markets to ensure its sustained growth.
You will also learn how to think about consumption and capital assets / goods ownership and how to calculate the cost of ownership over time. This will enable you to decide wisely whether to buy or rent an asset.
If you've never heard of these concepts before, there is a lot to learn.
This guide is a work in progress, so please send any feedback you may have to pavao@hey.com. If you want personalized advice, please use this link to schedule a call. If you would like to support this work, please use the following lightning address:
Alternatively, please use this link.
I hope you like reading this, and I encourage you to put the suggestions into practice in your life.
Why Do We Use Money in the First Place?
The first point we should address is defining money in the context of this guide. Here, I'll use the definition from the Austrian School of Economics: money is a widely accepted medium of exchange. However, for practical purposes, I'll add a caveat and define money as any economic good that you use not because you intend to consume it or produce something else with it, but because you expect to exchange it for something else at a later time.
Using this definition, we can recognize that many people use a variety of different things as money. But why do they use medium of exchange, why not exchange goods directly?
People exchange goods and services with each other because they value them differently. However, direct exchange of goods and services quickly encounters the problem of double coincidence of wants.
For example, person A has oranges and person B has 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 will carry out an exchange that benefits them both in the end. A and B value what they have more after the exchange than before, making the exchange 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 the 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.
Effectiveness of a Medium of Exchange
The effectiveness of a medium of exchange, or money, can be measured in terms of its salability (marketability, or 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 exchanges. 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 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 Bitcoin 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, it 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 unfortunately 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 to 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," and the "spirit of peace." We're referring to these intangible human qualities that we can either foster and grow or stifle and eliminate.
Now, this is a 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: they value goods and services differently. When we value things differently, we engage in exchange because, 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 the 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 he 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's item as a medium of exchange with B. Over time, through numerous interactions like this, certain goods emerge as better mediums of exchange than others due to their superior 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 a 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, restlessness, and confusion and fosters the growth of the spirits of freedom, peace, and clarity.
Establishing a Giving Practice: This step focuses 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.
What Do You Use as Your Primary Money?
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," buying properties not to live in or rent out but rather to "store value," with the goal of later selling them for a higher price? If so, 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, and 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.
However, 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.
My Path to the Full Bitcoin Standard
I remember first hearing about Bitcoin in 2012 but didn't find it interesting, because I thought it was just some kind of digital currency, similar to virtual money in computer games like World of Warcraft. In 2013, I remember reading about FBI shutting down Silk Road, where Bitcoin was used for buying and selling. The U.S. government's involvement added to my interest, showing that Bitcoin wasn't just a code that could be changed by its creators, or some kind of game money, but was actually used in real commerce, albeit illegal.
I trying to get some Bitcoin in 2013, but there wasn't really a conveneint way do to so. There was the option of wiring money from Croatia to Japan's Mt. Gox exchange, but I found that too cumbersome, so I just ditched the idea.
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 remember delving a bit deeper into how Bitcoin actually worked, and there were more resources available in video form on how to do it. I got Bitcoin Core up and running and was ready to send and receive my first Bitcoin transaction.
As I read more about it, I realized that the network was still operational even after the shutdown of Silk Road and the bankruptcy of the Mt. Gox exchange. So, I decided to try to get some Bitcoin to experiment with this time. Fortunately, where I live in Croatia, there was a small Bitcoin exchange just getting started, so I was able to easily purchase around $20 worth of Bitcoin in July 2014, just to play around with. The Bitcoin exchange rate was around $600 per BTC at the time.
After receiving my first Bitcoin transaction from the exchange, I researched further on the Bitcointalk.org forums. However, as summer drew to a close, my attention shifted back to my entrepreneurial venture. The price action wasn't really going anywhere at the time, and I had invested only a small amount of money anyway. By the winter of 2014, I had practically forgotten about my Bitcoin experiment as I became increasingly preoccupied with work and running a startup.
It wasn’t until late 2017 that I suddenly realized Bitcoin was trading above $15,000 per BTC, whereas I distinctly recalled purchasing it for around $600 per BTC. This was the moment that made me 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 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 view them through an 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 which meant my regular inflows 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 listened to hundreds of stories about how people’s lives were 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 to focus solely on Bitcoin. Throughout 2019, I did some freelance work while studying Bitcoin, and also delivered 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 public interest, but I slowly connected with a few 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.
In the summer of 2020, I got a chance to start working in the Bitcoin industry by connecting with Saifedean Ammous, the author of "The Bitcoin Standard" by helping him fix some issues on his website, and 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 its 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'd spent that first, and I had no choice but to learn how to live on a 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, spending it just as I would spend my fiat.
I was already consistent in budgeting, completely debt-free, and had established a giving practice. When I switched my cash balance from fiat to Bitcoin, all I had to do in my budget was practice 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 as Bitcoin was going up so much. I also invested in my business by acquiring a new office space and equipping it with the tech I needed to get more done. I replaced all of my consumer electronics and bought a new scooter to get around the island. I took several brief vacations and trips, all 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 whose livelihoods were threatened. It was then that I fully realized Bitcoin's potential as money that cannot be censored. I helped locals protesting state oppression daily to begin their journey with Bitcoin and continue their resistance. If I wasn't all in on Bitcoin, I'm sure I 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 a Bitcoiner’s gathering in Rab in the spring of 2022. We formed the “Dvadesetjedan” group, 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, and connect with Bitcoiners who spoke my native language.
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 going through a bear market and I responded naturally by further cutting down expenses and raising income, which led to an increase in my Bitcoin savings rate.
As the bear market progressed, I noticed that many Bitcoiners I was following were decreasing their Bitcoin purchases and were almost seeking 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 six 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 I was following 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 did 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 experiencing both a bull and bear market on a 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 a full Bitcoin standard. This is the way all of us are going to embrace eventually. You have the opportunity to do it now.
Last updated
