I learned something new: Bitcoin.
Self care is a huge topic right now, especially during the pandemic. As parents, or caretakers, we have to stop and think intentionally about how we are doing physically, emotionally, mentally, financially etc. It seems obvious, but it can be hard for people who are consistently focused on the many needs of children. We also think we can get to our needs later. This is why I created the Dragon Mama Self Care Check In. I have already gone more in-depth on a number of topics on the list which you can find here. The topic I would like to delve into today is lifelong learning. Of course, most of us learn new things everyday just by participating in life. For example, as technology changes we learn and adapt just by using our phones, banking, shopping etc. We also learn a lot through our children. I knew almost nothing about dinosaurs until my older son was 2. Now, I could probably name off 50 dinosaurs off the top of my head. I also re-learn a lot of things I've forgotten while teaching him and his brothers. But all of these things are not what I'm talking about today. This article's focus is intentionally learning new things.
If we only learn about the things that interest us, we are not growing to our full potential. We will miss opportunities to improve the quality of our life! And, more importantly, the quality of our children's lives. One thing I always avoid is financial discord. I hear people talking about interest rates and stocks, and I just have never been very interested. Yes, I did go to college and law school so I have a basic understanding of economic principles, taxation and things like that. But, there is SO much more I could learn that is relevant to my life! One thing I decided to learn about recently was investing in crypto currency. If this was something that could help me secure funding for my children's education, I should at least learn what its all about. (Especially since I just recently found out my husband and I own some haha!) Also, expanding your knowledge also increases your confidence!
The article below is actually written by my brother to help parents learn just a little bit more about Bitcoin, and perhaps inspire them to dig deeper. This article may contain affiliate links. Dragon Mama may earn from these links at no cost to the reader. I hope you like our recommendations.
Is Bitcoin a Good Way to Invest in my Child’s Future?
By now, most of us have at least heard of Bitcoin. The world’s first crypto currency has caused several media frenzies over its young lifespan; however, these frenzies have typically been short-lived and die off after a decline in price. When first exposed to Bitcoin most are quick to write it off as a get-rich quick scheme or “pump and dump” scam. After failing to research the topic enough myself when I first heard about Bitcoin back in 2013, I made the leap in 2017 and made my first bitcoin purchase. Today I am confident enough about Bitcoin’s future to help others get a basic understanding about it.
Let me start by letting you know I am not a financial advisor and this is not financial advice. Now that we have that cleared up, let's get into the basics.
What is Bitcoin?
Bitcoin is a digital currency that can be bought, sold and transferred within minutes. Although it is known as peer-to-peer cash it is, in my opinion, better used as a store of value. Think of it as digital gold. It is, in fact, far rarer than gold, more easily divisible, easier to store, easier to move and easier to transfer than gold. True, gold can be used for jewelry and electronics, but, in reality, it is not as rare as most think. In fact, there are asteroids in space with stockpiles of gold that would make the Queen of England green with envy.
Okay, so what? Bitcoin is rare, so are my child’s paintings of the garbage can. That doesn’t mean they can be sold at auction for millions of dollars. This is a valuable argument that rarity does equate to value. However, due to irresponsible fiscal policy across the globe, there is huge demand for a store of value that cannot be diluted by government and central banks. Bitcoin may be the answer.
We have all heard of inflation and understand the basics. (If not, a quick google search will do the trick.) A dollar has less and less buying power as years go on. This means if you are a saver, you might actually be a financial loser. I am not trying t o insult anyone here, but saving your hard-earned money by building up that savings account for your retirement or child’s education may not be the best option right now. The Fed’s target inflation is 2% and we are seeing much higher than that after all the helicopter money was thrown around during the pandemic. Think about how much money you are LOSING after 18 years of THINKING you are saving for your child’s university costs.
Ok then, how is Bitcoin the answer? Can’t the creator just make more or hackers reprogram the code? No! The Bitcoin network is secured by miners all over the world. These miners confirm transactions ensuring every cent of bitcoin is accounted for and no double spends occur as well as solve complex algorithms is hopes of getting the next block reward. The mining end is a bit complex but the important part is that it would take 51% of the miners to hack the Bitcoin network. Although not impossible it is very close to it. It would take a massive amount of money to perform a 51% attack on the network. (Though it has happened to other cryptos that are much more vulnerable.)
Bitcoin’s beauty is that it is decentralized (to a point, there are still some very large holders that can manipulate the price at times just like any other risk asset) and no person or group can change the supply. Although it is somewhat inflationary with the block reward, the total supply will never exceed 21 million coins. That means there are not very many to go around when we consider the over 7 billion people across the globe. Not to mention the many bitcoin that have been lost forever and the 1 million sitting in an untouched wallet.
How Do I Buy?
Before throwing your hard-earned money at digital currencies I suggest putting a little more research into the topic than just this article on a parenting blog. I highly recommend reading “The Bitcoin Standard” and “Bitcoin Billionaires.” The more you learn, the better. Do not get into a rush, there will always be opportunity. Please remember Bitcoin is very volatile and like any investment you can lose everything you put in. If you are interested in learning the basics of how and why to invest the book “Fake” by the author of “Rich Dad Poor Dad,” Robert Kiyosaki is an excellent resource. Good luck out there and thank you for reading!
I hope this article got you thinking about things you never ventured to learn about before.
Expand your mind, expand your opportunities. Keep your brain sharp and be a life-long learner. And, don't forget to your self care check in. Of course, if you are inspired to learn an don't have time check out Audible!