Right on the Money: Bitcoin hits $3,000, or 1000x my entry six years ago when people called me raving mad

in bitcoin •  5 months ago

In 2011, I went all-in into bitcoin. As I described in a blog post at the time, I took all my savings and my entire credit line and put it into the fledgling currency, once I had realized its disruptiveness, and I did so at about $3 valuation (to simplify events a bit). People mocked me relentlessly for predicting a thousandfold increase.

I tend to be good at predicting events five years out that the large majority considers unforeseeable black swans. I’ve done so twice now for particular high-profile events: once when founding the Pirate Party – which was a “career ending decision” according to some colleagues, until I had succeeded wildly in what I had set out to do, sending people to the European Parliament on basically no budget using a novel set of leadership techniques. The other time was when I predicted the massive breakthrough of cryptocurrency in 2011, and said I predicted bitcoin to increase in value hundredfold-to-thousandfold over the next three to four years. (Do note that the actual breakthrough has not happened yet.)


Coindesk's price index breaks $3,000 in intraday high

In both these cases, people basically said I was mad, even though I made no secret of going all-in into bitcoin — I’m not the “haha, I got rich five years ago with my secret method” type of person. Rather, I announced to the entire world that I was going all in, and being very specific about my reasons, giving anybody who wanted the ability to copy my actions. (A lot of people did; I get people coming up to me today saying I got them into bitcoin with these posts. Good for us, good for all of us.)

A key to these kinds of high-risk decisions, of course, is to trust your own intelligence and judgment when you know you’re going against the grain and against common wisdom. If you try to do something halfway, it’s the equivalent of taking the average between two sidewalks and walking in the middle of the road. I quickly lost count of how many times various well-meaning people told me to “sell and collect profits and come out ahead” – but that simply wasn’t the analysis I had made. Most people didn’t even try to be well-meaning, but instead had fun at and mocked my decision to go all-in outright.

To illustrate this, this is the highest-voted comment — not a random comment, but the highest-voted comment — from the Reddit thread six years ago when I announced I was going all in. Particularly note that this is a comment made by, and voted to the top, by bitcoin enthusiasts.


“I can’t even begin to comprehend the depths of the stupidity of that kind of reasoning”. To be fair to the commenter, it took a little over five years to get there, and not my estimated three to four years.

It’s quite funny in hindsight, actually, that even the people who were most devoted to the technology expressed themselves like this at the time.

In any case, as a followup to the original post, I just wanted to highlight that it reached the target I predicted. I was, as people say, right on the money.

Or maybe I should say that bitcoin reached the first target I predicted. Today, I refrain from making predictions for bitcoin until scaling is properly resolved with good engineering, and the obstructing company Blockstream has been kicked out of the community; the currency really has no future until this event has taken place as Blockstream has negated all the utility I originally pointed out through insanely tone-deaf non-business, but cryptocurrency as a whole remains extremely disruptive, be it the first-mover variant (bitcoin) or a second-mover variant.

If you love Blockstream and/or Bitcoin Core, but started doing so after I went all-in, I would urge you to consider the rational possibility that my analysis holds water this time too.

(Oh, and the market cap total for cryptocurrency just hit a hundred billion US dollars. And it’s still just the beginning. When cryptocurrency is ready, it won’t make sense to measure it in US Dollars any longer.)

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This is fantastic. Thank you, Mr. Falkvinge. I've been a fan of yours since I first got into bitcoin in early 2013. I've shared your Target Value For Bitcoin article more times than I can count (including just today in my last Steemit post).

Thank you for writing that and for everything else you've done to improve the world. :)

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Thank you for the shout-out, it is insanely appreciated!

Congrats on your guts to go all in. Many people freely make wild predictions, but very few have the cojones to back it up with money, let alone all their money, and then some! Also, congrats on riding out all the storms between then and now.
People often say, "If only I had bought bitcoin when it was $xx. My response is, "If you don't have the guts to buy it now, you wouldn't have had the guts to stick it out during the Mt Gox crash, or the many other pull backs. Or, you wouldn't have had the foresight to continue learning about crypto, and the importance of diversifying your holdings, and saving to paper wallets, and your bitcoin would be gone with Mark Karpeles."

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If you don't have the guts to buy it now, you wouldn't have had the guts to stick it out during the Mt Gox crash, or the many other pull backs. Or, you wouldn't have had the foresight to continue learning about crypto, and the importance of diversifying your holdings

This is a great insight. People say they are wishing for hindsight, when they're actually wishing for guts. And if they had had the guts, they would not need the hindsight.

(Paper wallets are dangerous, though. Lose it or leak it, and the money is gone. I prefer cold storage with multipart m-of-n distributed backups.)

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Totally agree, I bought my first bitcoin mid-2011 and had severe FOMO as it increased in value almost 50% by the time I found out until I got my money to the exchange. I tested it with small amounts at first until I was confident in the technology. It later dropped in value by 95%. By then, I was more convinced than ever and was increasing my exposure at around $2 per coin (from memory).

I did not go all in (and would still not advise doing so). Instead, I invested what I was prepared to lose and around the amount I would generally put into a single stock in my portfolio.

I have sold and spent along the way (but again only small proportions of my holdings), but bitcoin (and now other cryptos) completely eclipse the value of my share portfolio now.

So, I guess it takes guts, but diversifying also helps, not my not going all in when I first heard, allowed me to spend more of my dry powder when the prices fell.

Great to hear from you again, and congrats! Hopefully you can use the wealth to bring change into the world.

Any chance you could write a post about EOS and it's potential to completely upend governance? Would love to hear your thoughts on smart contracts and the social order.

Cheers!

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Yes. EOS please!

Got my vote you ballsy crypto-psychic and my following. If only .... just like everyone else who didn't is all I can say. Hind sights 20/20 some have the balls most don't. Looking forward to more from you. Enjoyed.

@falkvinge glad to see you back on Steemit. What brought you back after the 7 month break?

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Thank you! I've been mostly bandwidth constrained, and doing very little posting outside of my job role as Head of Privacy for PIA. It's not a lack of interest as much as it's been a lack of cycles, especially with moving countries in these last six months (yes, doing so is a quite demanding project, but it's coming to an end).

Hey good for you! I really wish I had heard of Bitcoin in time, Steem was my intro to cryptos, really wish I had bough more when it was down at $.20 as well, haha. Crazy where BTC is going, I think a lot of people are going to be really shocked at how far this crypto currency thing really goes.

He is expecting a 100000% return on his investment in 3-4 years. Is he out of his mind? I can't even begin to comprehend the depths of the stupidity of that kind of reasoning -- MrCheesy

I'd like to see what MrCheesy has to say today. Unfortunately he was only active 10 months ago, and before that, 2 years ago.

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To be fair, every Reddit post has some wild comment that's pointing completely off. The responsibility would not lie so much with MrCheesy, as with all the bitcoin enthusiasts voting this particular comment to the top at the time.

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Great point!

even now people still think it's mad

I still get the same reactions from a lot of people if I tell them I'm into cryptocurrency. But time may tell and I prefer to laugh a bit later than those people XD

very nice post and a perfect investment :D
Hodl :P

you made the right decision ;)

Nice call! What about segwit? I have my summary here: https://steemit.com/bitcoin/@s4m0ht/segwit-five-facts-to-know-about-how-it-changes-bitcoin-protocol but I would like to know your call on this one too:)

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Segwit violates practically every "best practice" of software engineering in existence. It makes wild changes to an emergent-behavior system (where it is absolutely key to make small changes at a time), it bundles unrelated changes, the adoption model is atrocious, it requires the entire ecosystem to start using a new transaction type to reap any benefit at all, it is premature optimization, it doesn't solve one bottleneck at a time, it ignores the actual bottleneck, and a future potential rollback puts all the money in such transactions in jeopardy.

I would not hire anybody who has worked on this.

Regardless, it is clear that it is not going to achieve a 95% hashpower majority, or even the new threshold of 80%, so it baffles me why it is still being discussed. It has no path to activation, and that was clear six months ago.

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Thanks for the clarification! I also think it will not reach 95% (95% is very high in general). To be honest the only thing that must be addressed quickly is the malleability, it can be used to create long withdraw or no withdraw from exchanges (not sure why it hasn't been done yet). Bundling unrelated changes or many changes is indeed a bad practice. If anyone worked on high-end it-industry projects though, sometimes you have to what you have to do when the clock is ticking, but I don't see a clock ticking so there is no need to make rough stuff.

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Sometimes you do have a clock ticking, but this problem has been known since at least 2011, and was being actively discussed in 2014.

"Malleability" is two unrelated problems, one of which has been fixed. It is (was) the ability to create the same transaction expressed differently -- transaction format malleability. Compare spending 4.00 USD vs. $4; this is written in two different but equally valid ways, and so a computer system can see it as different amounts.

This malleability has been fixed. There is now only one valid way to set a particular amount in a transaction. This affected exchanges.

The second malleability is a transaction ID malleability. Since the signature is based on a partial unknown at the time of signing, another signature can be made with another partial unknown, leading to a different transaction ID for the same transaction. This does not affect exchanges, but some future technologies that depend on a static transaction ID reference.

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Thanks again, let me understand if I now get it right: say someone finds withdrawls transaction as soon as they are generated from the exchange, creates copy of them with different IDs and broadcast such messages. The network would assume all of them is correct and all of them represent the same transaction, some nodes will store that with an ID, some other with another ID, but from the point of view of the final wallet owner there is no difference in terms of waiting time.

Inspiring post thanks :-)
Earned you my 1 cent vote, and your newest follower
Keep them coming...
Life is good @ steemit.com

Oh man! Nice call. I heard about it anf thought it was interesting in 2010. But i didnt execute. Worst decision iml. But I wonder how long i would have stayed. Would i have sold it all with a 10x return? Probably. Are you still holding your initial investement? If so..incredible. Congratulations!

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I traded a little early on to try to catch the swings, but I mostly just hedl on from approximately $3.

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That is amazing. Well done!

Time to get rid of that hair-shirt and buy some Silk Shirts methinks;D~
Thanks for sharing.

I wish I didn't spend all my bitcoin on illegal drugs. Dam you darknet.

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I've spent bitcoin over the years, too. Part of investing in my investment is to use the currency as such. But I always buy back what I spent later.

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Stupidly I just spent it. I never saw the value in bitcoin and still dont. As an accountant, it scares me.

Congrats! What a call

Nice move!
how much did you invest 6y ago ?

Good work! Keep the good work up by your predictions now ☺

"When cryptocurrency is ready, it won’t make sense to measure it in US Dollars any longer."

This!

Btw, I'm glad you're back writing here!

Great post

You had good feeling about it and you are thinking right! I like your writing! Good job, thank you! Followed, upvoted and resteemed!

Even at this price what now, i will not hesitate to buy bitcoin.

Make a Dash for it.

The obvious question is what are going all in on today?

It takes some guts to go against the established truths. I remember i tried mining in '11-'12. It failed since i'm a loyal Mac user. The graphics card simply was not good enough. And i remember the horrible software called wallet. I never accepted such terrible waste of my time. Much has changed since then and I'm happy I learned quickly by joining steemit. It has been a wild ride. And it seems to me it has just begun.

Excellent post and well done

Madstuff I think it will drop a bit thou was reading what you said about buying in your so right good advice

Interesting to read but I just learned about bitcoin, hopefully this post can help me ...

@modprobe nice article thanks for sharing...

Nice return of investment at the end. Good for you sir.

Cheers,
@Yehey
https://QUE.com - I will follow ALL who follow me. I think that's fair.

Great Post ! UPvoted & REsteemed this.

Wow, balls of steel! And announced it to the world. Awesome!

I was just curious if your long-term outlook has changed ($100,000-$1,000,000 per BTC) due to either the scalability issues or other altcoin competitors which we didn't know about back in 2011?

I'd love to hear your predictions for Pocket Change
after the Crash of the Fiat Debt Notes...
@pocketechange

I am glad I stumbled upon your point of view of how things developed with BitCoin. You certainly saw its potential before most others.

Tomorrow is the Beta anouncement of the cryptocurrency LBRY, which has the potential to become the next decentralized Youtube/Netflix/Udemy as a digital content platform based on blockchain technology. What is your opinion about this?
https://steemit.com/cryptocurrency/@flauwy/lbry-cryptocurrency-the-revolution-of-decentralized-digital-content

I agree that the current holders of the software "Keys" need to go, soon. I'd like to see a proof of stake or proof of work governance model for Bitcoin, when it hard folks to kick these "disrupters" out.

Here's my take on the whole mess:

https://steemit.com/bitcoin/@clearshado/bitcoin-the-cia-and-the-mit-connection

Congratulations. I would've only put all my cash in if actually went back in time. Because if I'm not 100% sure I couldn't put all my cash in. It takes balls. Do you have any other lucrative ideas for the future?

reetings! I found you because I am investing a lot here in the form of technical knowledge, time, creativity and tech hardware as I am now a witness for Steem and I noticed that you are voting for @tdv.witness - but that tdv's witness server is offline and of no use to Steem (for quite a long time as far as I can tell).
I would really appreciate if you would support me with a vote to give me a chance to show what I can do for Steem and Steemit. I have a long background in software engineering and also in running social networks.

My witness application post is here.