Going All in With Bitcoin
Bitcoin excels as a store of value. Unlike the dollar, which loses value every day through inflation, Bitcoin is naturally deflationary. Preparing for a rainy day or a drop in stock prices is as easy as "hodling."
I have long been bullish on Bitcoin, but my appreciation for its real potential has grown in recent years.
Several years ago, with three Antminer S9s running in the basement, I was focused on using it as means to convert electricity into a profit. Each month I'd cash out, pay off the electric bill and use the remainder to prove to my wife that the constant "whirr" filling our home was worth it.
Slightly over a year ago, I graduated to keeping Bitcoin as a portion of my portfolio. It became another investment that maintains a well-defined balance with mutual funds, ETFs, individual stocks, bonds, options, and cash.
But, as of this week, I'm shifting to replacing all of my USD with Bitcoin.
The USD I hold serves three primary purposes:
- It allows my family to make our daily purchases and funds the operations of our household.
- It provides funding for an emergency.
- It provides investment funding when an asset price is discounted to its value.
I believe Bitcoin is a superior currency to USD for several reasons. (I'm happy to elaborate, but that isn't the purpose of this post.)
If I can accomplish my three primary objectives for USD with Bitcoin, then it seems logical, to my family at least, to replace our USD with Bitcoin.
To begin my transition, I combined my cash holdings and Bitcoin into one category in my portfolio. This will free up a portion to be used on other assets as the combined category is now larger than it should be. In my mind, the categories were a duplication.
The next step is to be paid in Bitcoin.
I'm doubtful my employer would approve of using the resources to find a method of paying a single employee in Bitcoin. I believe it would be an unreasonable ask at the moment.
I'll be using Strike as my direct deposit account as an alternative. Strike gives the option of instantly converting your direct deposit into Bitcoin. It appears to be the easiest method for being paid in Sats (1 Sat = .00000001 Bitcoins).
Household Operations and Daily Purchases
Most of our purchases are made online, and the most regular are made at Amazon, Walmart, and Sam's Club.
Moving forward, we can easily purchase gift cards on Bitrefill, using Bitcoin for those online purchases. It is pretty easy, and Bitrefill provides a "cash back" reward - paid in Sats.
What if we're out and about and need to purchase gasoline, stop by a boutique, or take a little one to the urgent care center?
At this moment, I'll be using a Bitpay debit card for those purchases. Using Bitpay's phone app, I can load from Strike and make purchases like normal.
From what I've read, a few folks haven't been happy with Bitpay. I'll heed their warnings and be cautious. But for alternatives, Coinbase seems too expensive (fees) and others require the use of their specific crypto tokens, which I want nothing to do with.
Strike is supposed to be releasing their own debit card shortly, which might be helpful, and Fold Card tells me they are working on an option to load up their cards with Sats.
If you know of other options, I'm all ears.
Of course, if a business is willing to take Sats, I'll happily pay in that method. A few of my service providers already have the option, and I hope more will add to it soon.
Emergencies and Investment Funding
Bitcoin excels as a store of value. Unlike the dollar, which loses value every day through inflation, Bitcoin is naturally deflationary. Preparing for a rainy day or a drop in stock prices is as easy as "hodling."
Extra funds will be held in cold storage offline, making my savings safer and more secure than any dollar I currently have. If needed, I simply transfer the Bitcoin back and use it as necessary.
I'll still have to interact with the USD to pay my mortgage or transfer funds into a brokerage account for a stock purchase. I live in the US, and it is our official currency. My goal is not to never touch dollars (yet) but to minimize the holding of a currency a bureaucrat can print at will.
That I have to spend $1.25 today on what cost $1 ten years ago is one of the reasons I'm choosing to go all-in with Bitcoin.
This will be new for me, and I'll try to share updates on the hurdles I find and share my progress.
One such hurdle will be capital gains taxes, and I'm hopeful my accountant doesn't hate me next tax season. I'll let you know.