What is the “high” for the irreplaceable money that is the standard for humans? Is it time to get off zero.
This is an editorial opinion by Luke Broyles, Bitcoin content creator.
How much bitcoin do you need to get rich and finance your lifestyle? How little bitcoin do you need to protect yourself from the inevitable inflation, bank runs and death of fiat? Are you “too late” for Bitcoin? What will the 1% allocation do?
This is a question that Bitcoin beginners and veterans ask themselves and each other and, often, there is no clear answer.
Let’s provide a powerful framework to answer these questions.
There Is No ‘Top’ To An Immutable Monetary Standard
January 2009 was the first BTC price prediction. Hal Finney predicted that bitcoin could become the dominant global payment system, or $10 million per coin (Finney’s calculation would be closer to $40 million today). But bitcoin won’t surpass $1.00 until April 2011… Over two full years.
What Finney understood was that when the perfect money was invented all the global wealth would be consolidated. Henry Ford, Nikola Tesla and others saw this too.
The closed (monetary) system always absorbs the entire open (productivity) system. Money is a technology that values everything in its own ledger. There is no “top” price prediction for mankind’s unchanging monetary standard, at standard.
It’s About Purchasing Power, Not Price
So, a better way to think about the value of bitcoin is not in price, but in purchasing power. Overlaying the share of monetary shares with a certain amount of productivity (or economic value) is a better way to predict the value of money. It is worth noting that in a finite ledger, wealth inequality as we know it today, reverses what we want it to be today (a topic for another time).
First, let’s define “entity.” We have 10 arbitrary “groups” based on current estimates of the mega-rich entities for the poor.
Second, we must note what is often associated with the “Pareto principle”: The majority of productivity is created by a minority of people, and the majority of that productivity is created in the minority of that minority.
Third, we need to list the monetary shares to fill our matrix. It is often said that there will be “only 21 million bitcoins,” but this is not true. Accounting for the lost bitcoins, it may be lower than 16 million.
When we follow the Pareto distribution and the current ranking entity distribution, we get the following. charming results. Michael Saylor, the US government and several others have become the top 10 Bitcoin “mega rich” entities.
In addition, the average person today is more prosperous than the billionaires of the 20th century. Therefore, if Bitcoin only survives … only 800,000 sats can buy a lifestyle in the future that is more luxurious than the lifestyle of the upper middle class today, because bitcoin is true -represents the benefits of real prosperity around the world.
Let’s go further. There are just over two million bitcoins left on exchanges and just under two million to be mined. Let’s take a hyper-bullish scenario and assume there are only four million BTC to be distributed, not 16 million. If we do the math here, it just becomes more absurd.
In this scenario, as little as $14.81, $100, or 75,000 sats (at the right time) can be a life changer for a person or company in the future.
What if global wealth and prosperity increased tenfold? What if the global population increased by two billion? What if the other two million bitcoins disappeared? What if nation-states began to secretly accumulate, and another three million bitcoins were held? What if tomorrow a multi-billionaire allocates 20% of his wealth to bitcoin, to absorb 100,000 BTC from the market? What if the companies of the future use billions of AI bots to create productivity to fight the remaining BTC? What if only those two scenarios happened?
What if in a few centuries energy companies do not burn coal or rely on fission, but mine asteroids, use fusion and start the construction of the Dyson cluster? Based on our model, what if this future company has an entire balance sheet of 10 to 1,000 BTC? How much does one cost?
Entities selling rights to solar real estate or trading contracts to asteroids seem unethical to us. After all, we have less in common with the future than the past.
Are You Too Late?
So, are you too late? Absolutely not.
A closed monetary system is designed so that it is never too late for anyone, no matter how productive or how little they are. When humans sell their rights to the sun or any other celestial body in the solar system, it will almost always be sold in exchange for bitcoins. Stop thinking you are “too late”. It doesn’t make sense.
The question is: What do you do with this information? If you become a USD millionaire in 2023, you have no excuse not to buy 0.06 BTC. At $20,000 per BTC, this 0.12% allocation can save your portfolio. If Bitcoin is alive, eventually this 0.12% will be worth more than 99.88% of your portfolio. Even better, allocate 1% to 0.5 BTC because the stock market moves 1% every day. You can buy “BTC insurance” on one-day volatility.
Not a USD millionaire? You have no reason not to buy $100 of bitcoin (0.005 BTC at this writing) and lock it away…just in case. You spend a lot on insurance in the unlikely event, why not spend it in the likely event? Most of them don’t, because they know BTC accepts many unpleasant truths.
You will soon realize that allocating 1% puts the other 99% at greater risk while sucking liquidity out of Ponzi fractions.
The longer Bitcoin lives, the lower the risk and the higher the value. It is designed to be a better savings tool as a function of time. Personally, I think the 16 million model is too bearish and the four million model too bullish (for now).
Either way, the highest risk allocation for bitcoin is 0%. Either bitcoin is trending towards zero, or everything else. There is no third option.
Thanks, everyone, for your ideas. Keep showing those Bitcoin signals, and kill zero if you’re still there.
This is a guest post by Luke Broyles. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.