1. When and why did you become interested in cryptocurrencies?In August 2013, I was considering reallocating some of my investments, so I began to research.
My then portfolio was in mostly stock index funds, bonds, real estate and business ventures, and mostly I had built such portfolio over the previous 25 years.
At the time of my late 2013 research, I was interested in adding a gold-like assets as a dollar hedge and perhaps adding risk, yet I did not like what I was finding regarding gold-like assets in terms of fees and third party control and I felt some terror if I were to actually physically hold gold… I recall coming across bitcoin at that time, and I bookmarked it as: “Hm.. interesting, get to later”
In November 2013 I met a guy in his early 20s, and he told me how rich he had become from buying bitcoin in 2012. He told me that he was getting drugs from silk road and he inadvertently accumulated 25-30 BTC for less than $10 each, and he proclaimed that with the passage of time, he had noticed that BTC had shot up to around $260 each, before correcting to below $100 and then bouncing back above $600 at the time of our conversation.
In some ways, the guy was presenting himself as a kind of investment genius but admitting to a lot of luck. I thought whether the guy was lucky, genius or some combination, surely he had done well with bitcoin.
I was inspired to open my “get to later” bitcoin folder, and look into bitcoin. I recall reading a few threads and looking at recent price performance and generally figuring out if it had some kind of investment use cases, such as superficially seeming like it might be able to serve as a gold-like investment to hedge against my other various dollar based investments (I may have referred to wikipedia too, for that initial research and ideas about bitcoin).
If you will look back at the November 2013 charts, you might well notice that even while I was looking into my BTC introduction, the BTC price had nearly doubled within my research week, and that may have caused me unreasonable anxiety.. later more properly identified as FOMO symptoms, perhaps?
I would like to imagine that I had done adequate research into BTC before starting to invest, but when I look back at my notes and consider actual happenings, it appears that I was predisposed toward frontloading into BTC.. Accordingly, I started DCA buying BTC in November 2013, which would have been within about a week after first starting to look into it.
I believe that my idea was that I could get started with a kind of modest BTC DCA and research as I go. In November 2013, I authorized myself a 6-month budget, and by April/May 2014, I ended up extending my budget and DCA authorization for another 6 months bringing me to a year of mostly DCA buying by the end of 2014.
By the end of 2014, I had largely reached my BTC accumulation goal to reallocate about 10% of my investment portfolio into BTC, and by the end of 2014, I largely considered that I had transitioned into “bitcoin addict” status that might be better categorized as bitcoin bagholding?
2. When and why did you buy your first bitcoin?I purchased my first BTC on the street on November 29, 2013 for $1,500 for 1.2486 bitcoins; yes, $1,201 per corn.
I made my first BTC purchase based on my predisposition towards sound money ideas, and my quickie research revealing number go up 100x in 1 year in 2013, so even though I expected BTC price to be at a bit of a potential price peak, I still was receptive to its proposition as sound money.
As mentioned, at about the same time as my first purchase, I authorized myself with a budget to begin a 6-month DCA accumulation process. I also employed a bit of a front-loading technique in order to attempt to get a bit of feeling that I had a decently-sized stake in our beloved king daddy, in case number were to go up while instructing myself to simultaneously continue researching further and prepare in case number were not to go up.
Of course, retrospectively we see that the BTC price ended up going down quite considerably over the next 6 months and also largely, number went down relative to my first purchase for the next three years.
Sad but true that my first BTC purchase did not become profitable until more than 39 months after purchase (March 1, 2017), and not sustainably profitable until 40.5 months (after April 18, 2017).
There is no real need to feel sorry for the delayed profitability of my first BTC, because as you likely realize, dollar cost averaging tends to have advantages during periods of price go down, since I had continued buying BTC throughout those first 3 years between late 2013 and early 2017, rather than sitting on my hands or whining about number going down.
Essentially, my ongoing DCA BTC purchases had caused my average price per BTC to lower from $1,201 per corn to around $500 per corn by the end of 2016, and of course with a bit of a larger stashenings of sats..
On the other hand, my having had gotten sim card swapped in early 2017 (a kind of other side of the story) did cause my average price per BTC to raise back up to around $750 per each one accounting for the losses of BTC through the hacking of several of my BTC accounts.
3. How did you get on the forum?The same guy who introduced me to his silk road BTC profits story in November 2013, told me about the Wall Observer thread in February 2014, describing the WO thread as a troll box thread – which seemed right up my alley.
My subsequent visit to the WO thread around page 4,550, caused me to register a forum account and draft
my first WO/forum post on page 4560 Of course, the WO thread now has 27,156 pages of historical memorabilia, in spite some members engaging in mass deletions or rage deletions from time to time. I have always been a bit of an “anti-deletion” advocate, if there is such a thing.
For my first year or two on the forum, I did not venture
much outside of the WO thread.
4.1. What is your current strategy for bitcoin? From late 2013 to late 2014 I was largely in BTC accumulation mode, following a kind of learn as you go front-loading DCA methodology… and I believe that by the end of 2014, I largely met my goal to put 10% of my investment portfolio into BTC.
Since BTC prices largely stayed below my average cost per BTC through 2015 / 2016, I continued a kind of maintenance DCA practice through 2015/ 2016.. and probably somewhat inadvertently I had gotten my investment into BTC somewhere in a supra 13% territory - which I had considered to be a bit “overinvested.”
Perhaps my thesis of what constitutes being “overinvested” in BTC still holds true today. I am thinking that there are not really needs to invest more than 10% of an investment portfolio in BTC because bitcoin has such an ongoing asymmetric proposition in terms of if its thesis comes even partly true, investing 10% would still end up causing considerable wealth accumulation because of the nature of what bitcoin is.
I do understand, on the other hand, that anyone who has not really established a somewhat diversified portfolio, may ultimately end up investing way more into bitcoin, as a percentage because they are just getting started out in terms of building their investment portfolio. So blanket statements sometimes can be difficult to justify in terms of what might be prudent and appropriate for someone in a different timeline situation.
Even though BTC prices rose though 2017, I had decided to only skim off small BTC profits along the way up and NOT to sell large chunks of my BTC nor to significantly reallocate out of BTC – contrary to the guidance of traditional investors….
Part of my rationale to just let my BTC ride through that period has to do with the remainder of my investments being sufficiently enough to sustain me, and my then calculation that my investment timeline in BTC was going to be at least 4 years after that 2017 timeline.
With the 2017 price rise, my BTC allocation got up to 70% of my investment portfolio during the BTC price peak to $19,666 based on BTC price appreciation and dropped back down to 40%-ish during the BIGGEST BTC price drop down to $3,124 in December 2018, and currently, based on recent BTC price rises, I am probably still allocated in the ballpark of 70% BTC allocation, and these numbers continue to be based mostly on BTC’s price appreciation rather than additional investment since I have not been putting much if any significant additional value into BTC since 2017.
In essence since 2017, I had largely transitioned into what I would consider a maintenance dominated BTC strategy rather than a primarily BTC accumulation strategy, even though I will accumulate some additional BTC from time to time mostly from funds already dedicated to BTC.
So, currently such BTC maintenance strategy tends to be skimming small amounts of BTC when the BTC price goes up – an approximate formula that is 1% skimmed for every 10% the BTC price rises, and buying back BTC with the skimmed off proceeds when BTC prices go down… if they go down.. If BTC prices do not go down, then I just leave those dollars on the table and likely to just withdraw at some later date.. so I do not get worried about NOT being able to buy back BTC lower than the price that I had sold, in the event that the BTC price never again drops sufficiently below my sales price.
Yes.. I agree this whole process of selling on the way up and buying on the way down is a bit of an accounting nightmare..... yet my foundational ideas on my current BTC strategy came from
the SSS thread….
** and, I hybridized and personally customized/tailored such SSS strategy, too.
** An ironic thing about the SSS thread is that the OP author is a bit not sane, and even considered quite a scammer, but still the self-help ideas within the thread are still good.4.2. Can you suggest ways to diversify the risks of falling bitcoin prices?For me, I have always considered Bitcoin as a relatively long-term investment, and I believe that deciding to long-term invest in any asset whether bitcoin or any other asset remains a combination of financial and psychological commitment.
Having long-term commitment to an investment, does not mean that that the technique should be blind nor that the technique cannot be adapted because of changes in circumstances or changes in perspective, including feeling a need to get out of the investment if circumstances warrant.
First principles suggest that long-term investors should NOT be investing more than they can afford to lose, so therefore they should not be feeling desperate about their investment at any time, especially if they are investing into a seemingly highly volatile asset, such as bitcoin.
To me, NOT investing more than you can afford to lose means to make sure that personal cashflow is in order to cover all expenses, including emergency expenses for a minimum of 6 to 18 months. How many months that any BTC investor projects out cashflow will also depend upon the level of complicated expenses, businesses, and/or support of family… the more complicated and the more variables, the more prudent to project cashflow out on a further timeline in order to attempt to prevent causing your own emergencies from lack of foresight and/or due diligence.
I had tailored my overall bitcoin strategy to my situation by accounting for cashflow, my other investments, my views of bitcoin as compared with other investments, my risk tolerance, timeline and my time available, skills and abilities to plan, strategize and learn along the way - to tweak plans from time to time, trade if warranted, reallocate and other discretionary adjustments along the way. Figuring out each and every one of the above factors can take a very long time, and can be worked and tweaked along the way, so should not stop anyone from acting while they are tweaking and learning along the way.
When I first got into bitcoin, I considered that I had a one or two year timeline to be my projected minimum time to invest, and of course, a longer timeline would be ok too
These days, the fundamentals of BTC have improved greatly and seem to justify recommending that anyone coming into bitcoin should start with a minimum of a 4-year time-horizon for investing and of course, longer is better, too.
5. What do you think of the current Merit system and signature campaigns? Do they harm the forum? Of course, the current merit system does screen out scammers, account farmers and shills. Maybe not a perfect system, but it does seem to have some screening out efficacies. I did believe that theymos was going to increase the number of merit sources, but currently, it seems that the number of merit sources are still stuck in the assignment of slightly fewer than 100 merit sources.
I am not opposed to Signature campaigns since they allow members to earn BTC once they reach certain ranks. Signature allowances are part of the forum’s character and history, and can be beneficial for some forum members, which also seems to be good for incentivizing good posting behaviors.. Accordingly, if some members want to stack some sats through signature campaign participation, there seem to be various safeguards in place.. including members who monitor abusive practices that happen through any system that has financial payouts.
6. The most useful forum topic? Surely, I continue to like
the Wall Observer thread, that touches upon the latest and greatest in bitcoin events and frequently points out if there are other highlights in the forum and if no one is posting about BTC therein, which does happen from time to time, then it will tend faster and easier to scan through the posts therein.
Most helpful users? I am of the belief that nearly any genuine posting member can be helpful in terms of providing a personal experiential perspectives… and sometimes it takes a while for members to warm up to one another and sometimes members might be meanies and nice .. but not necessarily both meanies and nice at the same time.
Seems to me that with the passage of time merit and trust scores do tend to show which members are helpful and genuine – even though trust and merit scores might not be completely correlated to helpfulness.. For example, sometimes members have high merit and trust scores but are not helpful kinds of peeps (perhaps disingenuous kinds of peeps, sometimes).
It can take some time for the helpfulness of new users to be reflected in their merit and trust scores… and surely sometimes, some helpful members are underappreciated and not reflected in their merit and trust scores.
TLDR: helpful members tend to be any member who is genuine.
7. 3 things you would implement on the forum?I have grown accustom to the ways of our forum, so it is difficult for me to suggest changes as if there were some defects. In other words, I cannot think of any forum change suggestions at this moment as I type.
8. Do you trade on exchanges or invest in projects? Through the years, I had traded on at least 10 exchanges at one point or another.. but mostly just small amounts of my BTC in the trading method that I described above in response to question 4.1.. Essentially, I tend to keep less than 15% of my total BTC value on exchanges at any one time.
Note: I understand that the amount of value that I might keep on exchanges is and has been more than what other members would suggest to be best practices, so I concede that my way of using BTC and participating in the BTC economy is a bit more of a risky way of using BTC.Here are the main ones that I used historically:
BTC-e (later WEX and later closed by USG)
Binance
Bitstamp
Bitfinex
Bittrex
Circle (retail purchases - no longer the same thing)
Coinbase Pro
Gemini
LocalBitcoins (not really allowed for face to face cash transactions, which is one of my preferred methods).
Uphold
I understand that there might be some better ways to get BTC and to trade BTC these days, and at some point, I might try out some new exchanges – including trying out some of the decentralized exchanges or lightning based services, to the extent various other ways of participating (including running a node) seem to be growing in the space and/or I have been growing in confidence in them to try out..
Since I got into bitcoin, I have had an overall philosophy that I need to maintain ways to exit my BTC investment if needed, even if I never actually end up employing any of those means to exit.
Edit after I looked through some of the other interviews: I had missed the investment question, and so far, I am not invested in any bitcoin or crypto projects.
9. Tell a story about your big profit or big loss? I already mentioned my bit of embarrassing sim card swap attack incident in early 2017 that resulted in hacking of my access to several exchange accounts and a loss of quite a bit of BTC. I found out that hackers can be quite organized, sophisticated and fast.
Of course, there are various safeguards and protections that can be taken to attempt to be more secure, and there are quite a few articles on the topic of security and even on the topic of sim card swapping, which has become quite popular in recent years because of the irreversible nature of bitcoin and other crypto currencies and with quite a few phone carrier loop holes in places like the USA.
I understand that even with lots of sim swaps and hacks, it still can be difficult for guys to actually implement protections that should implement and might be available to them, even when safeguarding information is available.. and certain privacy/information/data leaks do continue to happen to sometimes giving hackers some easier ways to get in…
If given chances, hackers will take the easier ways in if they are available, but of course if they know about some of your details (such as BTC holdings or other personal details) or you seem to engage in some sloppier kinds of lack of OPsec behaviors then you could be helping to make yourself more of a target or they might focus more efforts on you than on others.
So, sure hackers might have tools to get beyond some of the more simple security measures that HODLers might take, but with anything we have balancing concerns too, and there are a large number of ex-BTC HODLers who have securitized themselves out of their coins, so sometimes taking too many safeguards could part some BTC HODLers from their coins because they are overly secure and they lock themselves out of their coins. Bitcoin is not forgiving in the direction of under security nor in the direction of over security, and there is no one you can call for help if you really lost or forgot how you secured your coins.
10. What do you think about the DEFI ecosystem?To me, Defi seems like an “innovative” way to convert various analogue Ponzi scheme practices into digital algorithm Ponzi scheme practices with fancy terms, such as “smart contracts” and “yield farming” to get folks sucked into likely purposeful complications, but in the end, still just glorified Ponzi scheming scams with little to no underlying value beyond a hopening to attract the next greater sucker.
Many of us in bitcoin for a long time realize that the similar kinds of accusations are made towards bitcoin, yet we also can recognize that bitcoin is different, even while people still get confused by what differentiations exist between bitcoin and the multitude of innovative complexities in cryptolandia trying to separate normies from their bitcoin through get rich quick aspirations.
I don't tend to get tempted by the various kinds of get-rich-quick ploys whether the shitcoin and ICO craziness of the 2017 period or some of the current hype around complicated smoke and mirror products, such as defi, yield farming, blah, blah, blah.
11. Is your anonymity a vital necessity or precaution?Anonymity has been a preferred practice for me.. and largely has been preserved..
For example, when you and I run into each other on the street, and you proclaim: “hey, you must be JJG…” . I will respond by plausibly denying you.
12. The last cryptocurrency book you read? I don't recall reading any crypto currency books… I know, it sounds sad… or should I say “pathetic?”
As a concession, I have listened to a lot of bitcoin related podcasts over the years, to the extent that listening to podcasts might have me to understand either bitcoin or myself.
Here’s a list of most of them. 13. Advise 3 cryptocurrencies/tokens for investment in the next 1-2 years?Don’t fuck around with shitcoins. Bitcoin is sufficiently double plus good enough.
Edit after I looked through some of the other interviews: As I mentioned, my overall BTC approach is to treat it as a long term investment. I have not come across any shitcoin, token or other crypto project that would rise to the level of worthy of investment or even to get passed my current timeline which is 4 years plus (even if I were to compromise, I cannot think of a shitcoin, token or other crypto project that would get passed a lower threshold 1-year plus investment timeline, in such a way that they are offering anything different from BTC). If they cannot meet my minimum investment timeline threshold, then I would categorize them as gambling rather than investing. I only gamble with very small portions of my network (like pocket change kind of plays), so from my perspective, I don't really gamble.
I consider my BTC trading system to be merely attempting to insure BTC price volatility. One of the most inevitable things in bitcoin is its volatility, and my BTC trading system merely takes advantage of such volatility rather than betting on such near inevitable volatility because I attempt to set my BTC trade orders in such a way that I am emotionally neutral as to which direction the BTC price goes in the short to medium term, so long as in the long term the BTC price goes up (which going up is part of the presumption of long term investing in BTC thesis, anyhow).
I don't say others should not gamble because they can do whatever makes them feel good, but I cannot recommend any technique that I do not think about or employ - and of course the techniques and the considerations for gambling are going to be different from the techniques and considerations for investing.
14. How much will Bitcoin cost at the end of 2020?I am thinking that at the end of 2020, bitcoin’s price will be somewhere between $14k and $17,250..
Part of the rationale for my prediction is that the end of the year is only 4 months away and $17,250 seems most plausibly to be the next BTC price resistance point and the last resistance point before getting into the dead man’s zone..
Once bitcoin prices get above $17,250 (when though?) then Bitcoin prices will most easily pass through the deadman’s zone of the previous ATH to be ported into the $23,500 to $30,000 range… but still, the $million question remains, when?
15. P.S. (Optional) Seems like I already said more than my fair share.
