The Purpose
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Most people see Bitcoin as a long-term, risky or speculative investment, and few actually use it as their primary, everyday money. The goal of this guide is to present best practices and principles for doing exactly that.
This guide is not written for complete beginners. It requires at least a basic understanding of how Bitcoin works on a technical level and, more importantly, an understanding of the economic reasons behind its creation.
For beginners of all ages, I usually recommend starting with the short illustrated story Bitcoin Money: A Tale of Bitville Discovering Good Money, which provides a solid foundation for answering the question: Why Bitcoin?
After that, for readers who want to go a bit deeper and develop strong technical intuition about how Bitcoin works, I recommend reading Inventing Bitcoin: The Technology Behind The First Truly Scarce and Decentralized Money Explained by Yan Pritzker.
On the economic side, for building a stronger framework for thinking about Bitcoin, I recommend reading the works of Dr. Saifedean Ammous, namely The Bitcoin Standard: The Decentralized Alternative to Central Banking, The Fiat Standard: The Debt Slavery Alternative to Human Civilization, and Principles of Economics.
By the end of this guide, you’ll have the tools and knowledge to use Bitcoin in your daily financial life — how and why to convert all your income into Bitcoin, and how to spend, save, give, and invest it.
The guide is divided into two main sections:
1. Money Management Wisdom The first section covers three money management principles:
Practice zero-based budgeting,
Become and remain completely and always 100% debt-free, and
Always keep 10–20% of your budget for giving.
2. Bitcoin in Your Total Net Worth
The second section focuses on how to think about Bitcoin in the context of your total net worth. It explains how to treat Bitcoin as money and how to divide the rest of your net worth into two parts: Consumption and Capital.
This section also introduces the Rule of Thirds—a simple guideline for maintaining a balanced net worth by keeping:
At least one-third in Money (Bitcoin)
No more than one-third in Consumption (personal-use assets such as items used for leisure and everyday life)
No more than one-third in Capital (productive assets such as businesses, investments, tools, or anything primarily used to generate income)
Finally, this section introduces the Bitcoin Power Law Theory, which suggests that Bitcoin’s price grows in a predictably measurable way. As the network matures, its growth rate gradually slows, and it does so in a scale-invariant manner. This framework helps form a long-term perspective on Bitcoin’s future value and sets realistic expectations, making it easier to establish time-based saving, spending and investing goals.
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 who are interested in living on a full Bitcoin Standard today. It is inspired by timeless principles of money management, applied to the modern world of the 21st century, in which Bitcoin continues to monetize toward what I believe is its ultimate goal: becoming the dominant global monetary standard.
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.
You think of Bitcoin as part of your diversified investment portfolio.
If any of this resonates, you’re in the right place.
Bitcoin's Purchasing Power Volatility
Bitcoin is unlike any form of money most of us are used to. Since its launch in 2009, it has gained tremendous value—rising millions of times over, from just a few cents in 2010 to around $100,000 in 2025. However, this growth has been anything but smooth. Bitcoin’s price has experienced wild swings, including multiple drops of over 80%, prolonged and brutal bear markets that led many to capitulate, and massive run-ups that left people overly hyped and highly leveraged—only to be wiped out later. While volatility has been decreasing over time, using Bitcoin as primary money still presents challenges, precisely because price fluctuations remain significant and short-term price movements are very difficult to predict.
A frequently cited example illustrates just how far Bitcoin has come. In the now-famous first recorded Bitcoin transaction in May 2010, programmer Laszlo Hanyecz asked on the Bitcointalk.org forums whether someone would bring him two Papa John’s pizzas in exchange for 10,000 BTC. At the time, those two pizzas were worth roughly $30. Fifteen years later, with one Bitcoin trading around $100,000, those same 10,000 BTC would be worth over $1 billion—enough to build and operate a global pizza franchise, fund international food supply chains, or provide meals worldwide at a humanitarian scale for years.
In my personal experience, since my first Bitcoin purchase in July 2014, when it was trading at around $600, I have witnessed its price increase by more than 100-fold, despite several major crashes along the way.
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 – Eliminate all debt from your life.
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.
I hope you find this guide helpful and I encourage you to put its suggestions into practice.
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