The Purpose
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This guide shows you how to use Bitcoin as everyday money. It helps you go from just holding Bitcoin as an investment to regularly spending it in daily life. It’s your step-by-step path from fiat to the Bitcoin Standard.
The guide is divided into two main sections:
1. Money Management Wisdom The first section is all about the three most important money management principles which should be followed in the exact order they’re presented. The goal is to 1) take full control of your money, 2) become and stay completely debt-free, and 3) regularly keep 10–20% of your budget for giving.
2. Bitcoin and Your Net Worth The second section is about Bitcoin and your total net worth. It shows you how to treat Bitcoin as money and break down the rest of your net worth into two parts: Consumption and Capital, and apply the Rule of Thirds, a simple way to structure your net worth by keeping:
At least one-third in Money (Bitcoin)
No more than one-third in Consumption (personal-use assets)
No more than one-third in Capital (productive assets like businesses and investments)
Finally, we'll introduce Bitcoin Power Law Theory, which suggests that Bitcoin’s price grows in a predictable, logarithmic pattern: as the network expands, its growth rate slows. This will help you frame your long-term outlook on Bitcoin’s value.
We’ll also cover practical ways to manage Bitcoin’s volatility, including how to adjust your budget categories and track your purchasing power over time.
Who Is This Guide For?
This guide is for Bitcoiners transitioning from the fiat standard — a debt-slavery alternative to human civilization — to a full Bitcoin Standard. It combines timeless money management wisdom with modern strategies tailored for the Bitcoin era.
If you already own Bitcoin and any of the following describe you, this guide is made for you:
You dollar-cost average into Bitcoin.
You keep some fiat as “dry powder” to buy the dips.
You’ve tried trading but realized you prefer buying and holding.
You use credit cards, personal loans, a mortgage, student loans, or other forms of debt.
You're reluctant to spend or sell your Bitcoin.
You think in terms of “good debt” and “bad debt,” and might take a zero-interest loan to buy more Bitcoin.
You have a general sense of your income and expenses—but not the exact numbers.
You spend more time tweaking your Bitcoin setup than managing your actual finances.
You’ve tried orange-pilling others, but they didn’t take you seriously.
You want to allocate more to Bitcoin, but your partner or spouse isn’t fully on board.
You have a fiat job and no direct Bitcoin income.
You want to earn more but aren’t sure how.
You’re planning for retirement and wonder how much Bitcoin would make you financially free.
You advise others not to go all in on Bitcoin because of its volatility.
You sometimes worry you don’t have enough Bitcoin.
“Fiat is for spending, Bitcoin is for saving” makes sense to you.
“Never sell your Bitcoin” also makes sense.
If any of this resonates, you’re in the right place.
Bitcoin's Purchasing Power Volatility
Bitcoin is unlike any form of money most people are used to. Since its launch in 2009, it has gained tremendous value—especially when compared to fiat currencies, which continue to lose purchasing power. But Bitcoin’s growth has been anything but smooth. Its price has gone through wild swings, including multiple drops of over 80%. While these crashes are becoming less severe over time, using Bitcoin for everyday spending still presents challenges.
A well-known example highlights how far Bitcoin has come: In May 2010, Laszlo Hanyecz paid 10,000 BTC for two pizzas—worth about $30 back then. By May 2025, with Bitcoin priced over $100,000, those 10,000 BTC would be worth more than $1 billion—enough to buy thousands of pizza shops.
I first bought Bitcoin in July 2014, when it traded at around $600. Since then, the price has increased more than 160-fold. Despite several major crashes along the way, Bitcoin has always recovered and gone on to reach new highs.
Some key examples of Bitcoin’s volatility include:
December 2017: Bitcoin hit a peak of $20,000, then dropped to $3,300 by November 2018—an 85% crash.
March 2020: During the COVID crash, Bitcoin fell from around $10,000 to $4,000, then surged to over $60,000 in less than a year.
November 2021: Bitcoin reached nearly $70,000 before falling to around $15,000 by late 2022—an 80% decline.
July 2025: Bitcoin is trading at around $108,000, marking a more than 1,000% increase over the past five years.
This level of price movement can be intimidating—especially for newcomers. People respond in different ways. Some take a conservative approach, only investing what they can afford to leave untouched for years, and buy small amounts regularly through dollar-cost averaging. Others try to time the market, buying low and selling high.
But I’ve found a different approach to be more 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 free call using this link.
If you’d like to support this work, you can use the Lightning address below or this link.
I hope you find this guide helpful and I encourage you to put its suggestions into practice.
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