I recently read an article which claimed that in the next six months Wall Street is going to be pouring millions, even billions of dollars into Bitcoin. I’m skeptical about the magnitude of the claim. However I found the explanation backing up that claim to be a little humorous. Apparently hedge funds and mutual funds are starting to hold positions in Bitcoin, and some special funds focusing on Bitcoin investing are starting up. In this way, the article continued, people who want to get into Bitcoin without the hassle of actually owning them outright have options.
I had to laugh at the “without the hassle of actually owning them outright” part. What’s so difficult about owning Bitcoins, other than the sticker shock from buying them at today’s prices? I mean you get a wallet and you start hitting up faucets and other earning sites to get your first little bits. Then when you know that’s all working right, you might consider buying some more, or you do what I do, and write articles for the Devtome, get paid in Devcoins and trade them out for some Bitcoin. I mean, what’s the hassle of that? Why pay a middle man?
But there is one part of the owning Bitcoin situation that I have found to be a royal hassle up to now, and that’s the part where I want to sell off some Bitcoin for fiat–US Dollars to be specific–so I can pay some bills.
Early on I registered an account on Mt. Gox. At the time it was THE exchange where you bought and sold Bitcoin. I wasn’t planning to trade heavily, and I have to laugh that I considered $90 to be way too high a price to pay for an entire Bitcoin. But I figured it couldn’t hurt to make sure I was all set up to do some trading if/when the time came to jump into that game. At any rate I knew that eventually I’d need a way to cash out my Bitcoin. So I registered an account on Mt. Gox and looked around for how funds transfers were managed.
How would you like to fund your account? the website asked me. I looked over the list of options, none of which I’d ever heard of before. Liberty Reserve struck me as a good choice with a nice positive freedom loving ring, so I then registered an account on Liberty Reserve.
How would you like to fund your account? Same question. Same basic list of options, again none of which I’d ever heard of. Um, how long of a train am I going to have to create here? Each service in the train came with its set of fees, and I thought by the time I managed to cash out a tenth of a Bitcoin my ten dollars of gain would be completely eaten up by fees.
Needless to say, I gave up on Mt. Gox trading and my account has been dormant ever since. I don’t even remember what user name I chose to sign up.
At least I can use CoinBase, I thought. After all, for the most part I’d only want to sell off a fraction of a Bitcoin here and there, so I could do it at their prices. I have made some successful buys and sells with CoinBase and when it works, it works very well. The only problem is that it only works about half the time. The other half of the time, I cannot move my Bitcoin from my CoinBase wallet to anywhere else because my transactions never register with the network and therefore never get accepted. My Bitcoin hangs out in limbo for twenty-four hours before CoinBase removes the attempted transaction from my account and returns the Bitcoin. This even includes the necessary transfer from my wallet to CoinBase’s wallet that is part of the Bitcoin selling process. Long story short, I consider CoinBase to be nonfunctional and therefore I no longer use it, nor do I recommend it. I have a small amount of Bitcoin stuck in my wallet and I will continue to try to send it out until it finally works. Then I’m done with it for good.
This left me once again with no way to cash out my Bitcoins. Not only that, the current prices make it unwise to procrastinate finding a way. Fortunately, I wasn’t stranded for long. I can’t remember exactly how I found this particular forum–I may have searched for a way to sell Bitcoin for US Dollars on Google–but there was a short message which answered a previous poster’s question of how to get their US Dollars deposited to their bank account with two words: Camp BX.
I immediately checked out the website, specifically looking for the funds transfer options. One of the options for either deposits or withdrawals is an ACH transaction between my regular fiat bank account and my Camp BX account. The fee for this service is a whopping two dollars for each ACH transfer. I can live with that fee. But it’s a one step process. Once I’ve sold the Bitcoin, I request an ACH transfer of the cash to my bank account and the deposit will show up in two to three days (the first one takes closer to ten days). This morning I made my first transfer request and I have every expectation that it will go through with no problems.
As far as the trading platform part goes, it seems to work just fine. There aren’t a ton of people using it yet–something like 46,000 users last time I checked–so it could take a while for outstanding buy or sell orders to fill. But if I want to sell at market rate it works just fine, with minimal lag time. At this point I’m dealing with small amounts and my trading is largely one way. I have a withdrawal limit of $1000 per day until I get my account verified. When I get to the point where that limit cramps my style I’m sure I’ll have to be making all kinds of other decisions, not just the one to verify my account or not.
Now that I have a way to cash out my Bitcoins (finally!) I am starting to treat my earnings more like a paycheck. I’ve decided that three quarters of my earnings will simply be sold off for fiat and added to my household’s resources. I will retain the remaining quarter for investment and play. If I want to dabble into day trading, buy more hashing power on CEX or buy a position in a hot new alt coin, I’ll use that portion of my earnings to do so. Hopefully one of these days some of that investing will pay off big and I won’t have to work again unless I want to. But in the mean time, my earnings along the way will pay many bills and maybe even buy a few nice things here and there.
I actually feel like a huge weight has been taken off my shoulders–a burden I didn’t even realize I was carrying. Up until now I always was bothered by the opportunity cost of whatever it was I chose to do with my Devtome earnings. If I sold the Devcoins for Bitcoin, I worried that the price of Devcoins would explode immediately after, making my sale a bad choice. If I held onto the Devcoins I worried that the price would crash making me wish I’d sold high. If I invested my Devcoins into a stock I worried about tying up those funds in an investment that might turn out badly. And on and on. It’s not like I was consciously thinking these thoughts, but they were running in the background.
Now I have a formula, and with it the realization that I have to treat livelihood earnings differently than investment funds (more on that in a future article, hopefully). You don’t play games with livelihood earnings; you don’t hold out for a better price. You simply turn those earnings into a form you can use to pay the bills and you don’t look back. You keep working for more, and you use those earnings to better your life now, not hold out for a theoretical explosion of value later.
If the price of both Devcoins and Bitcoins crashes hard six months from now and all my investments turn out to be worthless, if I treat 75 percent of them like a regular paycheck I’ll at least be able to look back on this journey and say it paid a lot of bills before it crashed and burned. But if I hold onto all of it as an investment, what I’d been doing up to this point, and it all comes down, then I’ve lost everything including all the time I’ve put into it to date. Now I know that I’ll at least get something.
And for me, that something includes some very basic things such as being able to continue living in our house (we’ve been affected by the perilous economy of the fiat world), buying the type of food I feel is best for my family, and now being forced to buy a new family vehicle (our current one bit the dust). When you have needs now, you don’t hold out for some sort of big payoff later. Or at least you allocate how much you’re going to spend on today’s needs and how much you will hold out for tomorrow’s payouts.
I’ve just done that and in a week or so I will have a bit of an easier time paying bills, thanks to my journey into Cryptoland, and especially thanks to the very last step of closing the Bitcoin fiat loop.