What If You Bought Only $50 of Bitcoin in 2010
The calculation that is making the world nuts
About 7 years ago, I heard about something called Bitcoin for the first time. One of my friends told me about this wondrous new digital currency that you could buy online. Sadly for him, he asked my advice about it. I didn’t think twice before telling him that it was surely a scam. Don’t do it.
You know how that turned out.
Today is a day for stargazing. A day to time-travel back a decade ago. You might remember it as the year of ‘I gotta feeling’ or the year of FarmVille. I was in South Africa at the time attending the FIFA World Cup; it was one of the happiest years of my life. Throughout the sparks of joy in my 13-year-old heart, I missed out on the biggest financial opportunity of my life and if you’re reading this, so did you.
I remember a very specific day in Jule that I sold $50 of icecream at a school market. Today, I cannot help but ask myself, what if I invested that $50 into Bitcoin on July 17, 2010.
I mean, it was just $50; it couldn’t be worth too much today, right?
Before sharing my thoughts it is important for you to know that I am not a certified, licensed financial or legal adviser and I do not offer any personalized investment advice. I’m however an investor aficionado.
Do your own due diligence, or before making any of your investing decisions be sure to chat with a certified financial planner or adviser. Any purchase, exchange, speculation, or judgment that’s taken on the basis of any information provided on this article, articulated or inferred herein, is at your own risk.
Bitcoin’s Early Days Were Priceless
Bitcoin is a cryptocurrency created by an anonymous entity or group of individuals using the name Satoshi Nakamoto. The group started working on the digital currency in 2008 and it started out as open-source software. On 3 January 2009, Bitcoin went live at $0. For about a year not much happened. In 2010, Bitcoin started to pick up.
Bitcoin is a decentralized digital currency without the need for intermediaries, a single administrator, or even a central bank. The currency can be sent from user to user and it is public, so everyone can see every single transaction, but instead of connecting it to your name, every wallet is attached to a specific address, much like your email address.
In a public digital ledger called a blockchain, the transactions are checked and registered.
Bitcoins are produced by a process called mining. Fundamentally, as a reward, you can earn Bitcoins by entrusting your computing power to support and maintain the blockchain.
It was still easy to mine Bitcoins for single users in 2010; now, it is almost inconceivable to mine from a regular PC. Just to put it into perspective, it took a small laptop around 3 days to mine a Bitcoin in early 2010, you’d be lucky to get $0.03 per year of Bitcoin on a gaming PC.
Buying Bitcoins in 2010 was complex. Just small trading channels were selling BTC. Most people who had Bitcoin mined it.
Three key characteristics provide value to any form of money: Confidence, acceptance, and rarity. Gold is an excellent example. People trusted it because it was so pure, they embraced it because it was rare and difficult to counterfeit.
You might ask, but what determines Bitcoin’s value? Humans do. The more we buy the higher its price gets and vice versa. There is no physically tangible thing that determines the value of the currency. It is a system that relies on trust, acceptance, and rarity. The only difference is that it is digital now.
So how much would the $50 be worth?
July 17, 2010, was a Saturday. You probably heard Katy Perry’s California Gurls in the background while playing Farmville on Facebook. I know, I was. Or perhaps you were watching a movie called Inception at your local movie theatre? While we were chatting about pointless things, something was concocting in the background. We listened, but we did not hear anything besides our own voices. Only the quiet ones heard and both of us missed out on the single biggest financial opportunity of our lifetime.
I checked the records, and it turns out that 1 BTC (Bitcoin) was worth $0.05 on July 17, 2010. If I invested my $50 profit from my icecream market into Bitcoin, I would have had been able to buy 1,000 BTC.
At the time of writing this article, Bitcoin is worth $41,387.50.
If silly 13-year-old me only invested my $50 into the right place, I would have been an ultra-high-net-worth individual (UHNWI) right now with a net worth of $41,387,500!
What I’ve learned from my massive missed opportunity:
While it is good to know what is going on in the mainstream world; I realized that the most powerful ideas come from things people don’t talk about on the news or social media. If they did everyone would be doing it already. Although it’s always great to have a dash of skepticism, never underestimate the power of an idea. Overnight, an idea can turn into a movement, and once a movement gets momentum — there is no stop.
Happiness is the New Rich
Although, we can both go on rambling about our fear of missing out or about how our lives would have looked like right now. And blah blah blah. I’m happy that I played FarmVille at the time and enjoyed my youth. It taught me creativity, innovation, and lessons I could not have learned anywhere else.
There is nothing as sad as the story of the programmer who found a way to order a $30 pizza using Bitcoin back in 2010. He paid 10,000 BTC for the pizza and thought it was a massive deal. You can do the math. Imagine living with that misfortune on your shoulders.
One explanation for why so many assume that money will buy happiness is that they see their friends and neighbors living in mega-mansions surrounding them, driving luxury cars, and enjoying lavish activities, and it really looks like they’re happy.
The problem is — there will always be someone with more money than you. At a certain point, there is nothing but empty dreams left.
Although I’m not a UHNWI, I’m blessed to be a billionaire of happiness and fulfillment.