Kun

A Beginner’s Guide to Bitcoin There are many people smarter than me who educate others on Bitcoin, but their explanations are often long, technical, and not intuitive for beginners. I’d like to offer a short-form option for those who want to learn. This guide is something you can share when someone asks, "What is Bitcoin?"—because, at the end of the day, this is where we need to bring the most awareness. Through my learning, I noticed that the people who understood Bitcoin the fastest had backgrounds in technology, investing, or engineering. I hope this primer helps democratize the understanding of Bitcoin from a non-technical perspective and meets people where they are at. This is not intended as a full, in-depth guide but to pique interest and form a basis for self-exploration on these ideas. Understanding the Market – COVID as an Example During COVID, the entire economy shut down, yet while in lockdown, we saw a huge rise in asset prices. Why? Because governments printed money. This highlights a key reality: the financial world is different from the real world. The financial world is denominated in dollars. The real world is denominated in people. This is why financial markets can be high even when people are struggling. Before 1971, when we moved off the gold standard, good and bad financial performance generally correlated with the rise and fall of living standards. But when currency is weak, these two things no longer align. Think of Argentina—its stock market (Merval Index) has been skyrocketing, yet people are living in an economic depression. Why? Because the currency is losing value. Everyday people understand this in countries with weak currencies, but since most of the Western world hasn’t experienced it in their lifetimes, they recognize it elsewhere but fail to see it happening to them. The easiest way to grasp this is to think "as if" you live in an emerging market country prone to this type of value loss. I say "as if" because, while the U.S. dollar is the world's reserve currency, this just delays and slows down the eventual outcome—it doesn’t prevent it. What Is Money? Money is a concept created by humans out of ingenuity to avoid bartering—so we wouldn’t have to trade tomatoes for cucumbers or store goods we don’t need. It is one of the most foundational and long-standing ideas in human civilization. Originally, money was no different from a store of value. You worked, added value, and in return, received money—a store of value. The separation between money and its role as a store of value happened when we transitioned to infinitely debasable currency. At that point, money—specifically fiat currency—became merely a medium of exchange rather than a store of value. I start with this because before dismissing Bitcoin as "made up," it’s important to recognize that the very concept of money—something we use every day and that drives the entire global economy—is also made up. The Real Problem – When Money Loses Value, It No Longer Serves People So, how do we better align the financial world with the real world? Benjamin Franklin had the saying "time is money"—but what does that really mean? We all, in one way or another, trade time for money—whether through labor, mental work, or other means. Henry Ford believed money should be tied to energy. So, what’s the point? The point is that 1 unit of energy spent working should equal 1 unit of money created, and that energy needs to remain as equal as possible. This ensures an ethical basis for money, so that all participants—whether miners or buyers—have the opportunity to acquire money with the same order of magnitude, risk-adjusted. What Is an Ideal Store of Value? A store of value should allow us to exchange 1 hour of work for something that maintains the worth of that hour over time. Fiat money, backed by nothing, means that over time, every hour worked is worth less and less—until, eventually, the cost of the paper itself is more valuable than the money printed on it. That’s exactly what has happened in Zimbabwe and other countries—forcing them to switch currencies. How Bitcoin Fixes This Bitcoin isn’t printed out of thin air or based on arbitrary timing—it must be mined using energy. The current average cost of mining a Bitcoin is around $84,000 (as of March 15, 2025), but more importantly, it is created through energy expenditure. Put simply: The energy you use for labor is equally represented on the other side. No corruption. No printing. An ethical foundation for money and a store of value that will grow over time. Bitcoin is also capped at 21 million coins, with the last coin expected to be mined around 2140. Mining rewards will also halve every four years—just as our time becomes more scarce, so do mining rewards. But What About Bitcoin’s Volatility? There are three key components to this: We've never seen a hard money emerge in real-time. Bitcoin is simultaneously forming as money and following a network adoption curve. Over time, Bitcoin transfers from speculators to long-term users. If you chart bear market bottoms, adoption continues to rise exponentially. If you chart bull market tops, you can see the speculative premiums. Speculative premiums come from two sources: Speculators and long-term holders. In high-inflation countries (50-100% per year), any Bitcoin price is better than waiting. Bitcoin should be seen as a superior digital gold rather than just a currency (for now). "Digital gold" is just an analogy—it’s actually bottled-up time and energy, as scarce as our own time. Many people confuse a lack of infrastructure for a flaw in Bitcoin itself. Think back to when email was invented. It was described as "digital mail" simply because there was no better way to explain it. People asked, "Why use email when there are only 20 computers in the world?"—they were confusing the technology for its adoption phase. The same applies to Bitcoin. Just as email evolved beyond simple messages, Bitcoin is evolving beyond "digital gold." What About Gold? Gold isn’t ideal money, but it’s still better than cash in the long run. The properties that make good money are: Divisibility Recognizability Portability Security Scarcity Gold isn’t the rarest metal, but our ancestors chose it because it was the best balance of these properties. Gold became money not because it was ordained, but because humans found it useful. However, it’s still flawed—the same way the U.S. dollar is the best of the worst. If you ask wealthy investors about gold, they’ll tell you it’s an insurance policy—not a growth asset. Unlike Bitcoin, gold isn’t tied to energy. It’s just the best of the worst tied to a relative proxy of these features. Investors today who would otherwise buy real estate or stocks are now buying Bitcoin—its market opportunity is much larger than gold. Will Our Currencies Disappear? No. As long as we have nation-states, they will issue some form of currency. Bitcoin can act as a store of value while you still use fiat for daily transactions. Bitcoin doesn’t need to become a transaction currency—but it can in the future. What About Other Cryptos? The word "crypto" simply means "cryptography." There are many use cases, both current and future, but they don’t compete with Bitcoin. How Should a Beginner Buy Bitcoin? It’s simple: DCA (Dollar Cost Average)—Have a consistent plan. If Bitcoin falls below mining cost, add more if you want. If Bitcoin is 2-3x above mining cost, just HODL—unless your local currency is inflating 20%+ per year. Following these principles ensures you accumulate Bitcoin while understanding when speculation is in the price. Only add Bitcoin with money that’s meant for savings/investment—money you don’t need for at least three years. When you buy Bitcoin at or below the average mining cost plus local inflation, you are storing your energy risk-off. When you buy Bitcoin above that, you are taking a risk-on approach—betting that speculation and adoption will increase at a faster rate and that mining hash rate will lag upwards. To be clear, buying below or above is not about intrinsic value—it’s about knowing the market equilibrium price. There are good reasons to buy at any time, but this framework helps you think about it holistically. Final Thought #Bitcoin aligns work, money, and value. It’s not about hype—it’s about fixing broken incentives.

The types of deals and investments that were made by NVDA were only possible because it was founder led With Jensen leaving - it puts the whole industry at a massive disadvantage I’ve always thought longer term hardware business is very competitive and that it won’t last as a monopoly but Jensen would have maintained a lead as long as possible Hard to be bullish long term NVDA without him If he left and announced any other similar project it would tank NVDA - crazy I really hope it’s because of intelligence leak - if it was due to affair we are back to woke politics

One of the most unhelpful sayings is "if you are not growing you are falling behind" Due to entropy maintenance is an essential part of investing, fitness, relationships etc For eg not doing 20 pushups because why bother do what you can do anyway. Well how many 60 yr olds can do 20 pushups? Just by practicing what you can do over time you end up better off than most This goes the same for investing - why bother invest in something if it only goes up with inflation? well it beats holding cash - certainly would be better to grow above inflation but even maintaining your current purchasing power is a win over time compared to everyone who doesnt So certainly aim to grow and outdo yourself but also get a kick out of doing what you already do

Perspective provides clarity IF as people argue there is no interest in BTC right now due to AI etc and its STILL above 70k - how cool is that? 5 yrs ago when it was 70k it was off the back of alot of leverage and speculation Asymmetry is often found when interest in an asset is low despite growth The argument that BTC is boring and therefore they should buy AI which is what everyone is interested in goes against any fundamental investing principle - basically saying "buy consensus, buy the speculation" The argument to buy any asset should be one based on asymmetry whether consensus or not - not based on interest Same is true of gold 5 years ago - it had no interest despite growing central bank interest and then instead people lined up to buy when it was 5000 an ounce No interest doesnt mean it will do well either but you have to be able to discern what matters and what doesnt Public sentiment and anecdotes should not form the basis for investing - some people do well with this trading short term but you cant mix these together when looking at decade time horizons

When diversification is mentioned in investing - many take the idea that its only because of being wrong on a single investment However just as important is diversification on time horizons As per BTC last 5 years, gold before that, SP across a decade before that - there are periods where any asset is flat or down across a long period of time - you could be right long term but that doesnt mean you get to pick when the returns come Having focused diversification is how you can smooth liquidity and returns over time Why do very rich who know SP does better than alot of funds long term still invest in special funds? Its not because they are stupid - they want liquidity and returns to happen in years their other assets dont do well so that they have liquidity in good and bad times SP is not immune to downside risk - people have just forgotten that it can happen as it did in 90s-2000s for over a decade As opposite eg if last 10yrs or 5rs you had many ups and downs in BTC, gold, SP but if you owned all 3 you would have been liquid and up and to the right smoothing out volatility in any one single asset You dont need to own 10-20 things but you should own in my humble opinion at least 3 different asset classes and then have long time frames of 5-10yrs at min Dont invest with money you need short term

One of the major undercurrents for long term investing today is having this as an underlying framework We are clearly in early stages of communism in the west You have to think about all the different ways they will try to tax each asset class, how that impacts liquidity, how it impacts your mobility, how it changes interest in each asset class It’s a mega trend whether one likes it or not

For people bearish Bitcoin because of Democrats Dont forget the Bitcoin ETF was approved under previous Democrats not Republicans An secondly Democrats spending plans for welfare, entitlements etc will be much bigger with much higher tax plans so if they win - it only causes more fiscal concerns which only elevates Bitcoins role Another way to say - the midterms are a nothing burger

This point still stands as mentioned prior to previous election Republicans are bullish for Bitcoin in bottom up support Democrats are bullish for Bitcoin because it creates the macro for when you need it

When you see investors of any nature make a prediction on the economy surprisingly most agree on what’s going to happen long term- the disagreement comes from the implications and what actually happens The bull and bear market case for assets is almost unanimous on the long term If things go bad assets are cooked If things go bad assets are to benefit Only difference is the market dynamics understanding Which is also to say making calls and forecasts is not where the money is made and why listening to opinions isn’t going to find you a good investment You have to consider all outcomes and see where asymmetry lies and then as a portfolio be able to do well regardless of what happens If your outcomes are dependent on one scenario you are betting not investing Investing assumes a return on capital Betting assumes 0 is a possibility

AI is globalisation for intelligence What happened in globalisation 1.0? Absolute living standards increased across the globe but relative living standards fell between wealthy and poorer countries AI is going to further accelerate absolute living standards globally but further decrease living standards relatively It means increasingly your wealth goes less far globally and domestically if you are in the west at an accelerated rate apart from the tiny elite This is why you see great enthusiasm for AI outside of the West while inside you see concern - people intrinsically can see the value but also how their own relative prosperity gets taken As one eg almost every important text has an English translation - in non English countries you only have your countries text and a select few that has been translated. Massive intelligence gap. Now AI gives access to any language to read and learn anything. That is massive for them while at sametime taking away the intelligence arbitrage lead of the West

What people forget is when socialism and capitalism was at war people arguing for socialism came from a good place - they did not think it would result in worse living standards Today people are falling for techno socialism - the idea ai is going to give them abundance The more likely outcome is extreme inequality between technocrat class and others - remember someone owns all those things - they are not literally free People sleep walking into “no need for money, we get everything we want” That’s the exact trap people fighting for North Korea walked into - they didn’t fight thinking the outcomes were going to be worse they fought because they believed it would be ultimate prosperity an utopia Humans are socially competitive/comparison animals - very few if any want full equality of outcome even ones who advocate for it . Utopia does not exist. You have short periods of peace followed by people getting use to it and then one generation later that’s the new base line and they argue about something else. People due to hedonistic adaptation are constantly looking for improvement not status quo AI is not going to bring utopia - have to wake up an avoid blindly walking into techno feudalism/socialism

The world has changed so much that China is the success story for capitalism and West is the poster child for socialism If you think about capitalism and its qualities - profit motivated, fierce competition, wage labour etc everyone knows Chinese fit this bill If you think about socialism and its qualities - focus on the collective and social welfare you are talking about the West In a free market the government doesnt save bad business - China let the property sector crash - in the west US bailed out the banks and the property sector Western people tout Capitalism only to support socialist values and vice versa Chinese will speak about the collective and be the most competitive and self reliant Its hardly ever talked about or acknowledged and we are living in a made up mental dichotomy thats completely inverted

Within 10-15 yrs the west won’t be able to immigrate their way to growth 1)Voters waking up to focus on immigration as core election promises 2)demographics of countries that they source from are rapidly declining and those countries will also make it harder for citizens to leave via exit taxes and such 3)at peak prices there isn’t any rich countries with enough wealth to source that can come an buy expensive real estate 4)when taxes get so high and standard of living declines wealthy immigrants will stop wanting to come and you will only have people coming from poor countries Hence the property growth the west enjoyed via endless immigration will come to an end an start to reflect like Tokyo where centres are always expensive but outside city is very cheap Remember that there was a saying just 100 yrs ago to say “rich like an argentine” it was a top preference country to migrate to and many people preferred to migrate there than US but they ended up failing going down the exact track the west is going through now You have to see outside the status quo which is very hard to do nonetheless important when planning for the future

There is a fundamental problem in the logic that AI will make companies more competitive - that is not a good thing Competition means profits being competed away Any company that can use AI to reduce cost also means every other company can reduce cost and ultimately it causes margin compression AI is not helping companies create moats - its commoditisation of the moats they once had Those intelligent lawyers, accountants, engineers were previously talent moats with scarcity This is like the 2 parent working household - at the start it seems like a boom with more income but overtime that becomes the new baseline for affordability AI is only driving more extreme competition and it will only make it harder for every business not easier when it comes to winning The goal of a business is not lowering costs or having less employees - its long term profitability

History rhymes but doesnt repeat is a great way to think about whats happening in AI The reason people are confident and piling into AI is they can see that unlike the tech bubble there is mass adoption of AI models in real time - so its said this is different to speculation of 2000s However what this does is it makes people think that as long as there is fundamentals that the valuations make sense This is the new rhyming lesson - that fundamentals dont mean valuations are justified Hence rather than a bubble its more like a boom and bust Imagine a restaurant making no money valued at 1m - thats the tech bubble. Today is a restaurant making 1m a year except the valuation is 100m. Yes its better than tech bubble in underlying and yes its a business with revenue but that doesnt mean the valuations make sense

When talking about AI frontier lab companies I believe people are making the same mistake as they did with altcoins in the long term X is value created and Y is the ability to capture a percentage of X Just because something is very valuable to people in use doesn’t mean you deserve a high valuation- you have to be able to maintain and extract margins over time while growing Similarly the AI hardware companies are eventually the computer companies of yesteryear - they will trend to perfect competition especially when China catches up Frontier labs are basically selling dollars for pennies but unlike Amazon that ran a loss for years etc Amazon had option to turn profitable they just decided to keep investing - these companies have no path to doing that. Their costs are scaling linearly with the revenue - meaning they are not seeing economies of scale

If you want to see what the future of housing looks like just look at economies that are already there Tokyo, Seoul, Shanghai etc What you see is apartments in the centre that are modern hotel style (not the old brick ones) with convenience and amenities are more expensive than houses an outside of a few special neighbourhoods most people prefer to live in convenient high amenity towers and ACTIVELY prefer it to owning a middle level house thats inconvenient in location - in many of these places even socially the automatic assumption (although not always) is that when someone says they live in a house is that they are poorer than someone who lives in high end apartment neighbourhoods Once you travel out a while the homes are very cheap - in the west you havent seen that as much as demographics hold up via immigration etc but inevitably when demographics also decline people shift inward to centres leaving outer areas unfavourable If you watch youtube or have experienced people you know many deca, centi millionaires who have lived in huge homes sell after a few years realising the upkeep in personnel, maintenance etc is just a mental headache separate to financial reasons Thats how people increasingly feel these days with even modest old homes today - not well located so have to own a car, longer commute, cant walk to local shops and on top of that the house needs lot of money to fix and to top it all off they cant afford it either and these dynamics all shift the culture The thing people say here is that its cope because young people cant afford and I can assure you its not true this is based on the old inconvenient apartments of the boomer years- young global people increasingly want lockup and leave with great amenities low maintenance. The young people that still want that are generally told that by their parents - sayings like "who wants to live an a shoe box"etc In the west you can already see this in many city centres but it takes time to fully shift If you are going to buy a place to live then dont worry about any of this just buy what you like - as you would a car it doesnt matter if it goes down in value its just for personal use If you are buying as a long term asset class you either want to buy land/unit that can be redeveloped in the future into mid/high rise etc or you want own a house in the most iconic status neighbourhoods. The high end apartments will track nominal so better than cash but here its probably better to just rent and invest elsewhere unless you just want to own it and in which case comes back to earlier point of just buy it for personal reasons not financial

There are always good reasons to DCA or buy certain assets any time however sometimes better opportunities present themselves Gold today at 3870 is first time its hit a asymmetry level in a while Downside looks like circa 10%ish while upside seems multiples While there is many reasons for short term selling ie higher rates, some smaller countries selling etc the long term arc is stronger than ever For eg Central bank buying by China in Sept was its largest monthly purchase in 3 years - The big trends are in full play Also the stars seem aligned with BTC aswell that its also presenting a circa 10% downside for multiples upside to - an the strength it has despite the news shows that its stronger than people imagine I think for people who are offside or not positioned the way they want on the multiple year horizons in these 2 assets its a time window of opportunity over the coming few months As a side note the other main asset class I also talk about, the "digital monopolies" have not presented an asymmetric adding opportunity in a while (separate to DCA or balancings)- I suspect such an opportunity will come in the next couple years These things require a lot of patience with very long term thinking and you also dont want to get cute ie "well if it could drop another 10% il just wait" - it can also not do that. Remember that when most people try time ATL they end up buying ATH instead BTW gold which is considered a "safe" asset is down circa 30% from top - if you cant stomach 30% volatility you cannot be investing at all 4 things to generally consider when investing: 1)Can be wrong so consider larger downside possibility aswell as the fact it may not go down at all 2)Own multiple assets 3)Get your time horizon right - volatility in itself is not risk but if you become a forced seller because you dont have liquidity to last you can get stuck 4)Investing long term - years to decades is only with money you dont need now- do not risk capital you need in 6 months thinking it will all work out - this is not a trade

The highest level of intelligence one can attain is the depth of their self awareness By definition you cannot make the best decisions for yourself if you arent internally/externally consistent with who you are This is what gets you intro wrong jobs, wrong relationships, wrong investments etc For eg If you are not aware that you cant deal with volatility in investing you end up puking when price goes down You have to know your strengths and weaknesses upfront for any endeavour and then improve on your strengths and cover your weaknesses A few examples of ways to work on these across different areas: Personal - Think about and find things that trigger you, those things trigger us because there is something there we havent internally resolved. Getting angry or upset is normal but it simmering for long periods means its not just that ie if someone cutting you in line triggers you its not that they cut the line - it could be that the act makes you feel invisible and worthless as a person Relationships - Imagine actually being the other person not just empathy. For guys for eg you want an attractive partner for example who is fit etc but why would such a person be attracted to you if you dont have that same focus on yourself? What right do you have to demand that they see you for your personality when you dont? Investing - Start from view you could be wrong in order to see how you feel about things moving against you Once you become more consistent in thoughts and actions - every tweak and improvement changes your whole life because you are correctly resolving each situation - when its inconsistent you only get worse For eg imagine not knowing that you are a selfish person thinking you are a good person- you will be selfish in relationships and then when it ends you blame the other person as you are just a kind person. Everyone including you and me when speaking about past relationships will generally talk about the issues of the other person and conveniently think not much is wrong with them - you just have to acknowledge that you do it and in acknowledging it you will improve We all have many flaws but being able to label them and accept them goes a long way