Over the course of the last week or so, I have been in conversation, via DM/PM with a writer friend who's given me some useful suggestions regarding what I should read in order to make a positive change that will help me with my dire financial situation and potentially get me out of poverty. However, he holds some very negative/FUD-heavy views of cryptocurrencies, which I have repeatedly attempted to refute/disprove (without managing to convince him of anything nor change his mind). The following article is derived from those exchanges (which started with me trying to convince him that he could make some crypto from his writings, being a professional author), with relevant links for fact-checks.
[Precursor material]
J: I still think you're underselling yourself. ZA & the US are the same in that regard: what you charge is a measure of your quality, sure, but it's also a measure of the market's perception of your value. Is not making 5x or 10x an hour for exactly the same thing even more fun? :)
Me: No, that's being greedy and pricing oneself out of a job/project. It's bad enough that working in the conventional/traditional Capitalist structure with fiat is essentially stealing fiat from people and trying to justify it, without stealing even larger sums. I'd like to generate crypto from my work instead (which is why I want to check out sites like froog.co, which offers freelancers the chance to earn crypto for their efforts).
J: No, that's not being greedy; that's packaging. I can do the same writing for someone for $30/hour or I can do it for $60/hour or even more. And here's the secret: They value me and my work if they pay me more money. That is to some extent how I make $150K/year. It isn't a zero-sum game.
J: What is the advantage of earning just a few bucks of crypto versus a living wage of currency?
Me: The advantage is freedom and worth, not money. When you think about it in monetary terms (fiat), you fundamentally miss the philosophical/political point. However, since you asked about money, this might be something for you to consider: Gather a large enough following and write a popular article/post which interests enough people (such as how to live off crypto or how to write a good article/post) and sure enough, you will earn large amounts of crypto. Invest that over five to ten years and your rate of return will be 10x+ at minimum (depending on the currency in question and fluctuations in the APY, of course). Now, find me a bank that guarantees you that rate on an investment of that duration if you can. I think you'll be hard-pressed to.
[A few days ago, the start of the content in which the real gist of this article is revealed]
Me: I don't wish to brag (well, not much, anyway), but I've made about $40 worth of crypto in the last two weeks on read.cash (as opposed to $12-15 on Publish0x in twelve months). Hopefully, when my following there grows (as it surely will, judging by how I fared on pub0x), I'll earn more for my efforts. Just some food for thought if you're still undecided about it.
J: Thank you for telling me! I'm pleased you're doing better on your returns. Is it fair to calculate a slope to the growth of your income from this? This and the previous data is only 2 or 3 data points, which is hardly reliable, but it's a start.
J: This is probably not for me, as the things I write about are either things I write about for money (where I'm doing some kind of work for hire) or for free, where I do writing pro bono publico, such as the stuff I've written about becoming an author and how to write. I've said [sic] everything I currently want to say [sic] in the latter so that's all out there now, and I'm just doing the writing for money now, which pays me about $75/hour. So I'm not inclined to branch out into something new unless it interests me and crypto just seems like a pain in the ass to manage.
Me: "... crypto just seems like a pain in the ass to manage."
Me: Funny; I have that sentiment about fiat. You are right about having too few data points to judge at this stage, but it's better to be enthusiastic and optimistic than the other way around.
J: But I have all the structure set up for currency; doing something for crypto that wouldn't pay for my coffee just seems counterproductive. :)
Me: Hmm. I think we're on different sides of the fence, here. All the currency that's ever entered my bank account has gone out of it again. The only "current" aspect of it is that it's currently owed to someone else; I don't get to keep it. With crypto, what I make and hold is mine and mine alone until such time as I choose to move it.
J: That's only because you're not making enough of it, which has nothing to do with the medium of exchange; merely the quantity. I have lots of money in banks and I'm happy for it to stay there and do whatever I want it to. You can make a million in crypto or rand or dollars; it's all representing an exchange of energy — value given for value received — and the type of energy symbol isn't as important as the quantity. What can you do with the amount of energy you've received? Can you get coffee, food, energy, housing? It's the quantity that's the important part.
Me: You're most likely right about me not making enough (at least currently, anyway). Personally, I think the problem is more one of poor financial management on my part. (Almost everything I make gets eaten by bills/insurances and I spend the rest.) However, crypto is (so far) immune to inflation and appreciates thanks to fixed supply. That money of yours depreciates every time the government prints more of it. Additionally, you're maybe getting a guaranteed and safe but modest 10-16% interest rate on it at best. If I put my crypto into a medium-to-high risk liquidity/staking pool, I can potentially get up to 40% interest on it. (I could also potentially lose it or get the 10-16% rate, which is obviously a downside.) Since I have so little (in both fiat and crypto) and can't see any other way to beat the bank/government, I'm prepared to risk some of it.
J: I'm not really worried about inflation because I make way more than the inflationary rate in the US.
J: The government doesn't just print money in a cavalier fashion (save when Trump was in office); there are actually economic rules in place. Doing things that take money out of the system, like the 1.8T tax break for billionaires and corporations or the equally preposterous military budget, cause a great deal of inflation because the money doesn't go through economic "turns" like when you have a dollar and buy an apple from someone who then does something else and on and on: tax breaks and military spending are one-and-done, where the money goes in and then there's no more activity.
J: I'm not worried about high risk investments, either, because they're high risk. I've a pile of money and I see no reason to risk it on something just to get more. But you're still gambling on the crypto just the same as if you're betting on a bank. It's all the same; you've just got a higher potential RoR because you're willing to take a greater risk with your money... which is a perfectly reasonable choice, I add. When you're young and you've got nothing, why not? You could win big and if you lose, you've still probably got time to build up another pile.
Me: Fair enough. But you can't honestly expect me to believe that the USA shooting itself in the foot by increasing the money supply about 48% in a single year (printing money in a cavalier fashion) and then trying to make crypto the scapegoat for things going south isn't a whole bunch of deceitful bullsh!t that doesn't bother you in the slightest.
Me: I may still be young (relatively), but it's not just my financial future about which I have to be concerned. I've got to consider my parents' retirement too, particularly since they point blank refuse to see that there are alternatives to their austere pinch-and-scrape method of putting away money so that (all going well) they can maybe retire at seventy five and hope to spend their last decade living modestly when they've done that all their lives instead of living a little "just in case something goes wrong". What's the f@@king point? How depressing!
J: There's a wonderful book about effective saving called The Richest Man in Babylon, which is available online in PDF form. It's almost a century old. If you do the very simple things the author says, you'll have a lot of money as the years go by.
J: I don't see people blaming Bitcoin for problems and I certainly don't; I just see it as risky and too fragile. (There's also the problem of mining Bitcoin taking preposterous amounts of global-warming energy, but that's a separate issue.) Sure, I'd love to have invested in Bitcoin when it was a few bucks a coin, but I went to college with Steve Jobs (about 8 years before he started Apple with Wozniak) and I was working at Microsoft when the company went public and initial shares were only $29 each; I can also say that I'd be glad to have bought shares in both those companies when they were that cheap.
J: Yes, the US has raised the money supply substantially in the last 18 months and there is the potential for inflation as a result, but look at why this is happening: we've got a pandemic going on and a lot of this is economic stimulus stuff. People aren't working and they need to eat. This is hardly a normal time compared to the 3-7% normal growth of money (which was roughly corresponding to the GDP, btw). Having a pandemic and not having people working is making bizarre demands on the economy.
J: Being in one's 60s or 70s, you can appreciate how very easily it is for things to go sideways on you in 24 hours. Yeah, most of the time, Nothing Will Happen and that's the way we think life will go. And then, one day, Something Happens over which you have no control: you have a stroke or a heart attack or cancer, you're crossing the street and get hit by a car or a bus, you have a tree fall on you, and on and on and on. The Babe is a retired state and Federal judge whose job it was to assess disability claims for people who'd been able to work and suddenly couldn't for no fault of their own. All of these scenarios are perfectly real and actually quite humdrum; there are many more scenarios that are kind of strange that are nevertheless real reasons people's lives have changed in an instant. As you get older, the chances of medical problems increase dramatically, but as The Babe puts it,
> "Any day you come home from work in the same condition you were in when you left that morning should be counted as a win."
> — Babe Ruth
J: Your parents' attitude of "just in case" is absolutely godsdamn right. (This is why we buy insurance, too.)
Me: Yeah, I know about The Richest Man in Babylon. It's on my never-ending reading list, along with a few offerings/gems from Robert Kiyosaki.
Me: "There's also the problem of mining Bitcoin taking preposterous amounts of global-warming energy ..."
Me: As opposed to the USA's national energy consumption and heavy reliance on fossil fuels, making it one of the three biggest contributors to global warming/the greenhouse effect, while consisting of only 4.5% of the world's population (which over half of the population flatly refuses to acknowledge/believe even exists to begin with). The entire world's crypto mining population uses just less than 1% of that electricity by comparison, according to the CCAF (at least some of which is green energy). Come on now, J; let's not resort to believing the FUD about Crypto ...
Me: "Having a pandemic and not having people working is making bizarre demands on the economy."
Me: Certainly it is. I know that full well, having been practically unemployed for over a year and living on the breadline. Printing money in the face of a crisis doesn't solve anything (at least not long term). The smart people invested in crypto and drove up the prices by up to 640%. That would have actually been to my benefit and suited me fine as I would have stood to gain from my 2017-2019 investments and mining activities in crypto. Had I not lost my secret passphrase for the wallet I created then, I likely wouldn't be in the situation I'm in now, since my crypto would be worth 20x (or more) what I put in, in jut five years.
Me: As a former boss put it:
> "Every day that we get up, get dressed, get in our cars and go to work, every time we make a choice, we're taking a risk. None of us can know for sure what the result will be, no matter how much prior experience we have or how well we estimate. The question is not one of if we should take a risk (since risk is unavoidable), but one of how much risk should we take?"
---
> "Any day you come home from work in the same condition you were in when you left that morning should be counted as a win." — Babe Ruth
Me: That's too damn boring, too Sisyphean for my liking. I want to come home having made some tangible progress, being a little bit further along the path to where I want to be than when I started, not running in place and swimming against the tide. Otherwise, I might as well "smoke weed and learn to play the sitar" (as Bill Hicks put it) while my life falls apart (effectively what I've done for the at least the past year or so — probably the last five to twenty years, if I'm honest.)
J: Just because the US are utter pigs for energy — and we are and it's reprehensible — doesn't mean that spending an additional 11% [sic] should be hand-waved away as trivial.
J: It's entirely possible that printing more money won't help in the LT... but telling people "Well, hold out on your own for the next 2-3 years" is not going to work either. We need to solve the problems in front of us first.
J: Losing your passphrase? That's no good. Sorry. You're not the only person I know to whom that's happened.
J: What makes you think that this is Sisyphean? Think of it more like, oh, how you can't see the world is round just from looking at your neighborhood; it's only when you see a lot of it that you can tell the difference. I never could see what changes were happening while they were happening, but after a year or two I'd see a difference and after more time I'd see more. Where I am now is the result of all kinds of decisions I made, some of which I didn't even know I'd made at the time. Some gigs are indeed just whoring: you're only doing it for the money... but even then, there's value to be gained from doing a lot of these. There are contacts to be made, pieces of domain knowledge to learn, reputation to be furthered. But even if not, there's the money, which is why you're doing it in the first place.
J: As far as swimming against the tide? Shoot, welcome to the real world. :) Damon Runyon said "I long ago came to the conclusion that all life is 6 to 5 against."
J: Q: Do you wear the mizrab so that it pinches the finger at the same level as the base of your nail or at the first knuckle?
Me: "... telling people "Well, hold out on your own for the next 2-3 years" is not going to work either. We need to solve the problems in front of us first."
Me: No, it won't, but nobody gives a flying f@@k (or so it seems, anyway). The poor work hard just to stay poor/not get poorer and the rich get richer off their labour while the Statists waste their energies squabbling among themselves. That's how Statism works: bread and circuses for the proletariat in order to distract them from the reality of the situation.
Me: I didn't mean to imply/pretend that it's all Sisyphean. I've certainly gained domain knowledge, but I look back on it and realise I no longer care for the domain as I once did (mostly because I made bad choices, including refusing to participate in democratic slavery and push the rock uphill for a while, thus I ended up under it). I realise that I can't get out of the thumbscrews (or the mizrabs), but try as I might, I can't seem to push them further up my thumbs to where they once were, either. Once you fall into the Sarlacc's stomach of poverty, you don't get out but endure the deprivations of slowly being eaten alive. I was always outnumbered and never outgunned, but now I'm not so sure. If I'm going down anyway, I might as well go down swinging.
J: I think you have most of the tools you need to make more money and not be poor, but if you're tied into a worldview that's designed to keep you poor, you're going to make bad choices that keep you poor.
J: There's a line I've always liked from a movie that hasn't aged well: some banker is shucking and jiving about why his bank isn't doing well (and not taking responsibility for his f@@king up) and the consultant is calling him on his sh!t every time. Finally the banker says "Well, it's the system. You can't beat the system." And the consultant says "That's the problem with you and everyone else: you think it's a system. It's not: it's a game. You can't beat the system... but you can win a game."
J: Believing that cryptocurrency is somehow purer than any other medium of exchange is foolish: you're being bought and sold by the guys running things (who are just as much sociopaths as other really rich people). Remember that line about the stock market: "If you look to either side of you in a transaction and you can't identify the fool, you're the fool." This is really, really, really true. There are definite evils with banking and money manipulation and all kinds of stuff that you're not in a position to solve... but you can still win a game.
J: It's no disgrace to be poor, but it's not a huge honor, neither. Being rich means you have a chance to help other people as well: I've given away about $2500 in the last month to individuals and an organization; I'll be giving away maybe another $500-1000 in the next two weeks, too. I can afford to do this and I'm pleased that I can give a hand to friends or people who are really hurting for money. This is a darned good part of making lots of money and it really doesn't matter if it's currency, crypto, or gold ingots; it's all energy I get from doing what I do. Focusing on the nature of the medium is just silly.
Me: Oh, I have the tools, alright. What I don't have is the consistency/resolve to regularly pick them up and use the damn things. That includes taking the time to develop a sound fiscal policy and the humility to ask for help (which, for various reasons, I find loathsome and shameful).
Me: You and I disagree on a lot about currency and crypto, clearly, but you don't strike me as a fool or an arrogant Yank by any means, so I'm willing to take the risk that you're writing from a point of experience and wisdom and I'm in the wrong here (if it's even that clear-cut/black-and-white). Besides, I'm resolved to find a way out; I see crypto as that way, but I also figure there's no harm in reading the books mentioned to see if there's a principle that can be extrapolated beyond either fiat or crypto. I certainly don't want to go through the rest of my life with a poor person's mentality if I can do something about it.
J: :) I really do understand money. It's why I live in a 3500sqft house now and am making mountains of money. It's not a zero-sum game. Other people can do this, too. There are obstacles of all kinds and the rules are rigged in a number of unpleasant ways that you need to learn to deal with, circumvent and even tear down, but the game is winnable once you know how.
J: The principles in The Richest Man in Babylon (there are only 5; George Clason just repeats them a dozen different ways to find something that'll stick with each reader) are very simple. They really work, too. Every time you're reading the book and you think "But...." stop and tell yourself "I'm wrong, the book's right, I'll shut up now." (I had to do this, myself, when I read it at about your age. I needed to tell myself to shut up and read an awful lot, too. :) )
J: Crypto's just another medium of exchange. Oh, it has some advantages, definitely, but losing one's passphrase (as I've mentioned, you're not the first person of whom I've heard who's had this misfortune) is certainly not one of them. But the important thing to remember is that it's not a be-all and end-all. At the end of the day, however you're getting paid is however you're getting paid. Can you translate that pay into something you can use, like food and utilities? If so, then that's the important part. If you can't exchange it, then it's no better than the proverbial "exposure bucks" that you get for doing something "for the exposure." Crypto is currently a libertarian pipe dream and it makes fans of Atlas Shrugged very happy, but Objectivism as applied to economics doesn't work well.
Me: "Can I translate payment in crypto into something that pays for my accommodation, electricity, food and water?"
Me: Yes; as I mentioned toward the start of our conversation, there are a number of companies/organisations (such as crypto.com and, I think, TenX) that offer crypto-based credit cards that work just like fiat-based ones (also with the caveat that there has to be a certain minimum amount in the account or one's finances go pear-shaped).
Me: I'm not pretending that cryptocurrencies are perfect by any means (sometimes they're certainly not practical at this stage of the game, particularly where transaction fees are concerned), since all technologies have their problems and there's no silver bullet. However, they're (potentially) a damn sight better than fiat, which is a store of value (and a p!ss-poor one at that when one considers both the time value of money, of which Crypto is devoid — 1 BTC in 2009 = 1 BTC in 2029 because there will only ever be twenty-one million of them in existence — and [modern monetary theory.) So you can claim that I'm wasting my energy on the medium of exchange all you want, but I'm going to disagree.
[The conversation meandered on and took different paths.]