“When are you going to sell your bitcoins? $50,000? $100,000?”
Every Bitcoiner who has been around for at least one halving cycle gets asked this question all the time. When are you cashing out? What’s your price?
Now, if you are a crypto trader, sure, you’ll have an easy answer for that. But when I start explaining why I will never "cash out", why the arbitrary unit price of 100,000,000 satoshis equivalent to a random amount of fiat currency is totally irrelevant, or why Bitcoin IS my way of cashing out of the global fiat hegemony, it’s mostly met with a blank stare.
You see, we see Bitcoin as much, much more than just an investment scheme, a payment method, or a currency. We see the Bitcoin network as something that emerged out of a deep human desire to be able to transact and store value freely and openly with their peers across time and space, as something that is a necessity and not a luxury, a way to protect wealth for generations and not just to gain wealth to be sold at a future price or time.
The Bitcoin Network is Like a City
To make it easier to understand, I'll use a simple analogy: The Bitcoin network is like a prime plot of land with a network of roads and waterways that make it useful to its residents. Let’s call it Bitcoin City.
This city has no leader, nor does it have a government. Instead it runs on rules that were set by its anonymous founder, and later determined by the consensus of its owners, making it run like clockwork without a central authority. The land was distributed fairly to everyone who worked to maintain and develop the land, and the distribution of the land was announced from its inception, at a fixed and predetermined rate. Everyone is free to come and go as they please, sell their plot to another, or buy another plot of land later if they wish to come back.
Everyone that works to maintain this city is doing it voluntarily, and the owners are maintaining their own plots to keep up with the others. For each owner, all they care about is their own plot. The land titles are provable and easily verifiable by anyone, so no one can claim they own a plot if they cannot prove it by showing their key to the plot, which acts like a land title as well. Naturally, if you have the key, you are the owner.
The land is limited in size, with only 21 million equal plots, but each one can be subdivided into smaller plots, and each has exactly the same value.
When it was first discovered, developed, and introduced, few wanted to use it. Demand was very low, making the plots of land very cheap. It was fairly easy to acquire large plots of this land with minimal work, or even convince previous owners to sell their property cheap, which, in fairness, was the fair market value at the time. Many just forgot that they own land there, but that’s ok, no one will bother you for not participating in its upkeep.
But as more and more people wanted to buy this land, build on it, use its network of roads to transact with others who use this land, the demand rose over time. The roads and networks in this city are constantly being improved by its constituents, making it more efficient over time. Eventually, it got harder to work for a plot in the city, and a huge external market for the buying and selling these plots in Bitcoin city emerged. People started trading these plots of land with each other, and over time, more and more people decided that they wanted to keep the land and not sell it, making available market supply even more scarce.
Soon, land owners in this city started building on it, making massive improvements to its network or roads, making the city robust and bustling with activity, driving value into the city’s economy and making the land rise and rise in value over the years. Soon, owning a plot of land in this city got so desirable, so expensive, that it became almost impossible to own a full plot. The great thing about it is that people can sell fractions of a plot! Many people were still able to enjoy the benefits of living in the city, using its network, owning something of value, even if it was only a fraction of a full plot. The value did not diminish even in fractions, as the land was fully fungible.
Due to the absolute scarcity of this land and the value that was being created by its city, its residents, its owners, the value of the city skyrocketed. Soon, instead of selling their land to others when they needed money, the owners decided to just sell fractions of it, or just use the land as collateral, maybe build a business on top of it, or lease it out to others willing to pay just to use the land.
Another reason people love this city is that there is no such thing as discrimination in Bitcoin city. No one can censor anyone in this city. There is no need to ask permission to do anything that does not violate its rules, it does not care where you are from, the size of your bank account, the color of your skin, your nationality, your gender, none of that matters.
The Bitcoin network is a city, not that different from New York City. Its plots of land are valuable because it is useful to those that live in the city, that do business in the city, that want to own a piece of the city. Owning Bitcoin today is owning the keys to a valuable piece of private property in the Bitcoin network, no different from owning a rare, multi-million dollar domain name in the early days of the internet that you bought for next to nothing, or owning property in New York City before it became New York City as we know it today.
We didn’t buy Bitcoin so we could one day flip it for dollars, just like you would not sell that prime property you bought 15 years ago in Vancouver just because it has increased in value many times over. Well, you can, but that means you would have exchanged it for a currency that is highly inflationary and will lose value over time, while the property value keeps rising in value.
We believe that Bitcoin is so valuable that it can and will be used as collateral, it can be used to create value in and of itself, and that selling it means that you might price yourself out of owning it again in the future. The more Bitcoin I own, the more of this network I can use. These valuable slots in this global immutable ledger that can allow tens of trillions of dollars in value to flow within it, without restriction, for everyone, anytime, anywhere, they are mine, and nobody can say otherwise.
Ask yourself, would you sell a piece of land in a fast growing city that is accruing value at an exponential pace? When you see billionaires lining up to own some of this land, would you sell it to them at a price that you believe is severely undervalued? They aren't buying it because they are dumb, they're buying it because they can see that same value you see and they will try to get as much of it as possible while it is still early.
Bitcoin's currency represents the key to this private property. The most scarce property ever created by humanity. Only 21 million people can ever own the keys to one whole plot of land in this city. Many will own fractions, but its utility will be the same for everyone, and the value that it will hold in its network will be preserved over time and unaffected by external weather and whatever is happening outside its borders.
Looking at it this way, maybe you’ll understand us when we say we are not interested in selling our Bitcoin, and one day, when its true value is realized, all the more will it not make sense to exchange it for anything less valuable.
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From The DT Editors:
As we hit the end of 2020, which has been a momentous year on so many levels, we are going to take a detailed look at what Bitcoin means to some of us, how we got here, and where we see the future lying in a series of 5 articles and collections selected from among our regular contributors. Stay tuned for the next four articles!