How often have you heard something like this:
“If only I had listened to my friend in 2013 and bought Bitcoin …”
“I heard about Bitcoin in 2011 but never thought of it …”
“What people don’t understand” is the meaning of why someone sold two pizzas for 10,000 bitcoin in 2010. 10,000 Bitcoin will be worth more than $ 120 million as of October 2020. A naive takeaway from this event is that one should just use HODL, which is true to a certain extent. However, there are more interesting and disturbing reasons that should be discussed.
👇A thread on venture capital and bitcoin startups. There is a nuance why founders who understand Bitcoin should avoid VC as it is structured today.
– Jack C. Liu (@liujackc) July 7, 2020
A tweet from the thread above shows why prioritizing the accumulation of coins with a fixed supply and low barriers to entry for competitors into the economy is logical. The thread aptly points out that many Bitcoin (BSV) companies don’t seem interested in getting more coins while their VC funds keep them afloat. As Liu points out, in a Bitcoin economy, there is no point in delaying profitability.
In addition, companies that do without satoshis not only benefit not from a potential increase in value, but are also disproportionately disadvantaged in competition with companies that have earned satoshis during this time.
For example, if Company A generates revenue while operating on pure bitcoin loss compared to Company B, which is well funded up front but does not generate Bitcoin revenue (or fiat) when the price goes up, Company A suddenly becomes profitable and well-capitalized.
A fair criticism is that collecting and hoarding coins on the balance sheet is a bad idea when the company relies on a price hike to be profitable. However, with more options to spend the coins earned day-to-day and a supposed lesser time preference, this strategy looks very smart and would have earned our pizzas-selling friend a modest return of 2,926,829%.
This is a reminder that 1 BSV was worth around $ 60 18 months ago and has risen almost three times as much since October 2020.
Every dealer or building contractor who earned BSV last spring from trading such as selling mugs or writing your articles has three times the purchasing power today.
The fact is that early adopters and supporters of the Bitcoin network are disproportionately rewarded for their contributions.
Just ask Satoshi who has left nearly 1 million coins untouched and is worth billions of dollars a decade later.
Just ask the father / grandfather who cut down in 2011 and was able to retire 10 years earlier to spend more time with his family.
Just ask another family man who bought his first coins in 2010 and can now invest in Bitcoin SV companies again as he is ready for the rest of his life and that of his family himself.
There are many others who have saved their families’ fortunes by betting on what may be the most disruptive technology in human history.
Despite this strategy, which has proven to be far more numerous than just profit, the proponents of Bitcoin SV are still criticizing HODL’ing, charging their services, subtracting short-term profits, and claiming that the revenues now generated are insufficient.
Imagine you are now giving up making Bitcoin.
New to Bitcoin? Read CoinGeek’s Bitcoin For Beginners section, the ultimate resource guide, to learn more about Bitcoin – as originally envisaged by Satoshi Nakamoto – and blockchain.