Why I Bitcoin

Why I Bitcoin

Photo © Rob Byron – Fotolia

If you had asked me just three months ago about Bitcoin, I would have given you a blank stare. Although I consider myself a techie kinda guy, Bitcoin flew under my radar until the big peak in early December. $1,000 for one bitcoin!? That got my attention.

Did you ever get the feeling you’re a little behind the curve? Some great money making opportunity comes around, but you find out about it after the opportunity passes by?

Yup, me too.

It runs in my family, I think. Did grandpa buy stock in Kodak, Polaroid or Ford? Nope. Did dad buy into Xerox, IBM or Microsoft? Nope again.

So, this time, I figured if people were willing to pay $1,000 for one bitcoin, I should probably take time to investigate what the heck it is, and jump on the boat before it pulls away from shore.

Have I made any profit yet? Nope, but I think I’m on the way, especially if the bitcoin-dollar exchange rate rises above $864. Meanwhile, I’m trying to hang on for the ride.

Investing

So, my initial motivation to get into Bitcoin was as an investment, albeit a very speculative one. I reckoned I could risk about $300 straight away, and see what happened from there. So far, it has not been a total disaster, despite all the crises the Bitcoin ecosystem has weathered since I bought my first bitcoins.

Taking a cue from stock investing, I have diversified as much as I can. I own bitcoins, litecoins, namecoins, peercoins and yes (thanks to my son tipping me) dogecoins. I mine BTC and LTC at two cloud-mining websites. I even visit some faucet sites whenever I am sitting at my computer doing other stuff.

One thing that impressed me about Bitcoin, and cryptos in general, is the low cost of entry. The traditional financial system is just not very friendly toward the little guy, the small investor who has maybe a couple hundred dollars to invest. I have a Sharebuilder account, so I’ve got some game in the stock market, but it’s a very small game. I’ve owned mutual funds, too, though right now I’m having more fun picking my own portfolio, tiny though it may be. (I’m a little ahead of the S&P500, by the way.)

But to really make money in the stock market, you need to have thousands of dollars at your disposal. I’ve been a teacher for 30 years. We don’t get big salaries, so being a big player in the stock market was not an option.

With Bitcoin, I can risk a couple hundred, move funds around, try new things, and not get hit with lots of fees that would eat away at my savings. It’s like the Stock Market Game, but with real money that won’t bankrupt me.

The Anti-Bank

Then, there’s the fact that Bitcoin offers an alternative to banks. That appeals to me, too. I’m old enough to remember when banks were expected to serve their customers, not matter how small their balances, and help them save money. Some of you reading this may not believe it, but when I was a kid banks were required — required by law — to pay 5.5% to 5.75% compound interest on savings accounts. I had a passbook savings account that my dad had opened for me when I was 5. I know for sure the balance in that account at one time was only $5 for months at a time, because my folks let me take the money out if I wanted to buy something special.

Bank deregulation ended all that. Now you’re lucky to get 0.5% on a savings account, and good luck keeping an account open with only a $5 balance. If you’re small potatoes, most banks will show you the door. Even credit unions are not so friendly as they used to be.

Many Bitcoin enthusiasts come at it from a libertarian angle. They find government regulation of the financial markets anathema. Some would say, “Abolish the Fed!” or “Go back to the gold standard!”

Not me. I’m a progressive, or a liberal, or whatever the nom du jour is. I want regulation of the banks and the stock markets, because regulations put a check on greed and irresponsibility. They’re like vaccinations, which prevent epidemics of life-threatening diseases. Regulations would have prevented, or at least ameliorated catastrophes like the Great Depression and the financial crisis of the early 2000′s.

It’s those regulations that made it possible for me, as a grade school student, to earn 5.75% interest on a balance that never exceeded $400.

Bitcoin is a completely different animal from traditional banks and stock markets, which are after all run by a small cadre of very wealthy and influential people. They make decisions that are in their own best interests, and that of “the market.” They have not historically been very concerned about the people on the lower end of the income scale, who are trying to get ahead and stay ahead by the skin of their teeth. Bitcoin’s decentralized, democratic nature prevents that kind of greedy self-interest, and as I see it, gives us “little guys” a way to get ahead without making The Man any richer than he already is.

Technology

Finally, there’s the tech aspect of it all. I’m a computer geek. I don’t know all the intricacies of coding, but I was an IT coordinator for eight years for a high school. I’ve managed servers, networks and websites, tended Windows, OS X and Linux boxes. (I remember programming using paper tape and punch cards, and before that, flipping switches on a PDP-8. Yeah, had to deal with sabre-tooths, too.) Bitcoin’s technical aspect is just plain cool. The details of mining, the block-chain and hashing all are still fuzzily understood in my head, but I know enough to trust the system. In many ways, I trust it more than I trust my bank or PayPal. Especially PayPal.

I see a future for Bitcoin, and maybe Litecoin, too. The other ‘coins, I’m not so sure about. (Wow. Much puzzled. Very questions.) I’ve decided not to let timidity stand in the way of getting involved in the crypto markets. Maybe I missed the last big price surge, but I am not going to miss the next one.

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About the author

I've been a teacher for 30 years, most recently in China. Before I became a teacher, I was a newspaper reporter. Somehow, I still haven't gotten over the writing bug.

View all articles by John Wheaton

2 comments

  1. James Wheaton

    Wow, 5.75% interest! My bank’s smallest “savings” account gives 0% interest! It’s complete BS – as long as the banksters and lobbyists control the politicians, then the 99% will continue to get screwed by the Man. Bitcoin is a “disruptive” product and we’re just getting started on cryptocurrencies: no more fiddling with PayPal. Who knows what the future holds; although maybe there’s some good speculation done by cyberpunk novelists…

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