Evaluating the Bitcoin Payoff - Increasing Your Purchasing Power Over Decades

"Given a 10% chance of a 100 times payoff, you should take that bet every time." — Jeff Bezos

Running the numbers is a favorite pastime in the Bitcoin Community:

-21 Million

-6.25 BTC Block Reward

- 3-4 Million coins lost

-10 minute average block time

On and on and on!

But our favorite numbers are usually the ones related to purchasing power, which right now is usually done with the US dollar.

Does price matter?

Why (Long-term) Bitcoin/Dollar Prices Are Meaningless…

Pricing Bitcoin accurately is like trying to pin down a moving target, or evaluate how much support you might get from a patch of quicksand. You really don’t know how high Bitcoin might go because we have no idea how much money the governments around the world might print.

The problem is in the denominator.

The US dollar is fast becoming an unstable unit of account.

While the dollar is, and will remain the dominant medium of exchange for quite some time, there is no way to audit the number of dollars out there. Unforeseen problems keep coming up and the response is always to create more money, this could escalate in an orderly manner or if something devastating comes along there may be massive printing, meaning a massive rise in the Bitcoin price.

Who knows if its going to end at $1 million or $10 million or $100 million USD..its all going to depend on if the money printer goes nuclear at the end!

In the end, its best to just have really long holding periods in mind when you buy Bitcoin, as volatility is a given!

Why (Current) Bitcoin/Dollar Price Targets Are Meaningful!

On the other hand, there’s a case to be made that dollar pricing of Bitcoin is one of the primary metrics that we should be watching.

Price signals are what make the world go round. By looking at the price of any good or service, communication is made between potential buyers and sellers on a constant and consistent basis.

This is of course true for Bitcoin, and probably more so than other traditional stores of value, like gold.

Because Bitcoin is the new kid on the block, it hasn’t been fully captured by the legacy financial system. This is the weakness of gold, it became centralized and stored in central bank vaults. Additionally massive futures markets suppress the price of gold over time.

Bitcoin doesn’t suffer from this problem because of the ease of self custody.

The current price at any given time is the collective knowledge of all humans about Bitcoin, with two small caveats…

Fear and greed

As old as time, our enemies fear and greed pop their heads out and simply wreak havoc on the collective mindset of investors.

Bitcoin, especially is polarizing as die hard plebs are battling with old school fiat maximalists in a battle of wills.

In time, the superior money will win out, with a volatile road for all to navigate.

The Payoff - Purchasing Power and Wealth Redistribution

So how does the average pleb navigate the waters?

With care, patience, and knowledge.

This won’t be fast, and it won’t be easy. Trillions of dollars in purchasing power are at stake. Those who control it now aren’t going to let it go easily.

Lies, fear, doubt, opposition, legal battles, political wrangling, and plain old fashioned scaremongering are going to come from any camp opposed to Bitcoin, and they will only escalate as the price in dollar terms continues to escalate.

On our side is game theory - the idea that you will end up a loser if you do not adopt Bitcoin. Its only a matter of how much pain you can take before you capitulate and buy some Orange Coin!

The end result will bring a massive redistribution of wealth, and of course a huge reduction in wealth inequality.

Patient plebs who play the long game will benefit most.