How to Get Started with Bitcoin for the Nontechnical

Bitcoin for the nontechnical is almost an oxymoron.

The complexity of getting started with bitcoin for nontechnical people seems to be an impenetrable barrier. Nontechnical people have been blocked from what could prove to be a once-in-a-lifetime financial revolution with bitcoin. An opportunity unlike anything we’ve seen.

Luckily, I’m nontechnical and I navigated the maze so you don’t have to.

Here’s how to get started with bitcoin – For the Nontechnical Person. 

To start: This title is misleading.

Because before learning “How to” get started with bitcoin, you should be asking “Should I” get started with bitcoin.

That’s how you really get started.

Because maybe you are already late to the party. Maybe the billions have already been made. Maybe it’s a fraud, a scam, a Ponzi scheme. Or maybe it’s the biggest financial shift in history and maybe it’s JUST getting started, and maybe all the opportunity and fortunes are right ahead…

If you feel some FOMO – Fear Of Missing Out – I think that’s a good thing.

Not a good thing to make irrational decisions, but a signal that maybe bitcoin is worth digging into a bit. Maybe it’s still possible to make a life-changing fortune from bitcoin.

Instead of taking my opinion, I think there are 2 paths you can take to answering “Should You?” get started with bitcoin. And then, depending on your conclusion, I can tell you what “I Would Do” if I were getting started with bitcoin again as a nontechnical person.

The 2 Paths

The 2 paths I see to jumping on this tidal wave of revolutionary technology are quite simple:

1. If you are technical – Start with Satoshi’s White Paper
2. If you are nontechnical – Start with History

 A path you want to avoid is the path I took.

In 2013, bitcoin had it’s first “bubble” and gained some mainstream attention outside the technical world. As a nontechnical person, but someone very interested in the intersections of finance, economics, and technology, I was intrigued by bitcoin.

But I didn’t know where to start.

I got my first bitcoin wallet.

“What the hell are all these numbers and keys?”

“How do I get some bitcoins to put in this wallet?”

I had a lot of questions. My ignorance ran deep.

All I knew was that there was this new money that was directly peer-to-peer, meaning it cut out the middle man – such as banks – and it used some kind of distributed network to run the system.

Oh, and I knew its value gained about 1000% in a matter of months.

As has often been a blessing and curse in my life, I dove in with both feet.

The Rabbit Hole – Where bitcoin loses the nontechnical people.

When I dove in with both feet, I was hoping I was jumping into a pool that was shallow.

Like maybe 3 feet deep.

I thought I’d read a couple articles, study Satoshi’s white paper, and then start grabbing some bitcoin and maybe even make some money.

Or maybe I’d lose some money, but regardless, I’d learn about this technology that all these tech people were making bank on.

Thinking I was jumping into the shallow end, I fell down a very long dark rabbit hole.

I’d fallen down these holes before. I think a part of me likes it. Interesting things happen when you fall down a hole and manage to find your way back out (like why I eat nothing but meat…but that’s a story for another day).

As I fell hundreds of feet below the surface of the bitcoin rabbit hole, I found myself mining (pun intended…we’ll get there 🙂 ) in an area of dizzying complexity. I was picking away (last one) at consensus algorithms, and how a concept of “Proof of Work” could use energy as a means in which everyone in a network could trust transactions without trusting anyone.

I almost didn’t make it out of this hole.

In 2016, I thought I had a good feel for distributed computing networks, but adoption of this technology seemed very slow, it was complicated, and people were getting thrown in jail over it, hackers were stealing this mystical bitcoin, and my enthusiasm was dampened.

This is around the time I started thinking about launching an edtech startup. Long story short, I heard about these “Initial Coin Offerings” startups were using to raise astronomical sums of cash.

The rabbit hole got deeper.

I studied ICOs, long-tail economics and governance systems and the role of smart contracts (that are neither smart nor contracts).

Luckily, I didn’t fall so far down the hole that I wasn’t able to dig myself back out to the surface.

However, I think this hole is a trap for most nontechnical people.

They take a step in, fall down a bit, and don’t have the time or interest to dig out of it. The hole blinds their sight and thereby blinds them to what could be a once in a lifetime or hundreds of lifetimes financial shift and opportunity.

You don’t need to fall down this hole.

For nontechnical people, as I consider myself to be, there is a way to take advantage of this revolutionary technology and avoid the hole.

The key is to follow a map on the surface.  One step in front of the other that guides you around the hole. Your sight remains clear from one side of the rainbow to the other.

The first step on this surface map is stepping into a time machine to get a glimpse at the big picture of money to be able to see how bitcoin fits in. Let’s start here and then we can take the next steps together.

Money isn’t what you think it is

“Saying bitcoin is digital money is like saying the internet is a fancy telephone,” Andreas Antonopoulos, a bitcoin hero, explains in his book The Internet of Money. “We have never done this before in the history of humanity. This invention is truly revolutionary. When we look back, we will see that this is a historic moment in the evolution of computer science, but it is also a social and political revolution in the making.”

In order to realize the magnitude of this shift that Andreas talks about in his book, I’ve found it helpful to take a look at what money use to be, what it is today, and what it could be tomorrow.

The history of money is as long as the history of man.

In fact, archeologist have not discovered a civilization that didn’t have money in some form.

The earliest accountants wrote in hieroglyphics and cuneiform. They wrote about money. They created ledgers.

These early accountants solved the original problems of money. Bartering.

Bartering

Bartering has inherent issues like determining fair exchange rates.

How many bananas equal a sheep?

My sheep are also a pain in the ass to move around.

My bananas go bad pretty quick too.

Solving the problems of money is why and how money has evolved throughout history.

And at each stage of its evolution it tends to look very different. 

Shells and Feathers

In the Stone Age shells, feathers, and beads were used to exchange for goods and food.

This was a major transformational technology for money.

For the first time, money went from being a tangible consumption of intrinsic value to an abstract form.

Precious Metals

Thanks to the Egyptians, Babylonians, and Greeks, precious metals were adopted and became the next form of money.

Why?

Because they solved many of the problems of the prior currency.

Precious metals are scarce and can’t be easily forged. They are fairly easy to transport and carry around, and they can be cut and divided enabling them to carry a broad range of values for exchange. They also have some inherent value both aesthetically and functionally.

Over the course of thousands of years humans went from bartering to creating money abstractions. These abstractions evolved in appearance from feathers and shells to gold and silver.

It was a few thousand years later before the next revolution of money.

Paper.

Paper took some time to get use to.

Picture this scenario.

You give your hard-earned gold to someone you don’t know and they give you a piece of paper that says you gave them that much gold. You try and give this paper to someone for your next meal.

They don’t know who gave you that piece of paper. Did you forge it yourself?

They don’t know who else will accept it for goods or gold. Do our neighbors accept paper?

Trust in paper was not easy.

But over time, nearly 400 years, the trust grew and spread. Paper became widely adopted. People trusted the issuers of paper, the holders of gold, and the ability to exchange one for the other.

Let’s fast-forward to the 1950s when the next money transformation happened. Paper went to plastic.

Plastic

With plastic, we entered the beginning stage of digital money.

Today the vast majority of money in the world is just digits. Digits without anything physical. The paper in the US stopped being backed by gold in the early 70s. Just digits. Just numbers on a screen.

How did we come to trust digits?

We can’t touch them, we don’t control them, but we trust them.

Yet, the speed in which we adopted digits is unparalleled in history.

Internet and Software

Bitcoin is the next radical transformation of money.

There is nothing physical backing it and nothing physical to exchange or swipe. It’s digital money in its purest form.

It’s as radical as precious metals to paper, perhaps more so.

Today, people think bitcoin is digital money. However, this concept is missing the whole picture. We’ve had digital money for decades. In fact, less than 10% of money exists in any physical form. It’s all just digits.

The revolution is who controls the digits.

You may think you own your digits. But do you?

Centralized organizations like banks keep track of the digits, control the digits, and make up the rules that the digits follow. They can change the rules too. They can add more digits to their accounts if they want to (aka “printing money”) which makes your digits worth less. They can restrict how and who you can send your digits to. They subtract from your digits if you want to move your digits. They can freeze your digits and even take your digits at their discretion. They always have their hands on your digits.

We think we own our digits. This is far from the truth. And as we’ve seen over time, the next revolution of money is always solving the problems of the prior money. The money of today has many problems.

The central problem is that your digits aren’t really yours.

And the people that control the digits, make up the rules, and decide on who is allowed to play.

There are about 4.5 billion people who can’t even get digits. These are the unbanked and underbanked. They can’t participate in our global economy, not because they don’t want to, but because a central organization doesn’t give out digits in certain locations or to people who don’t fit their rules. These centralized organizations cannot scale or aren’t incentivized to scale to include a globally connected world.

Enter Bitcoin.

With bitcoin your digits are your digits.

There are no rulers. There is no bank of bitcoin.

But there are rules. Rules that don’t change. That if you follow can help you win the game. Fast.

Bitcoin is the next revolution of money.

With bitcoin, if you have a smart phone, you have a bank, not a bank account, your own personal bank.

When will people use bitcoin?

Bitcoin is going to prove to be sneaky because it’s going to follow a similar path of adoption of other revolutionary technologies. Innovation adoption is speeding up at unprecedented rates.

 

Your cell phone is an exciting example.

Remember landline phones. It took over 6 decades for the telephone to reach 50% of households in the US. One of the main reasons is that landline phones took a lot of infrastructure to build out. But look at the cellphone, it took off like a rocketship. It took cell phones less than 5 years to accomplish this in the 1990s. But then look at smart phones. Astonishing speed of adoption.

Billions of people didn’t have a phone in the twenty first century (they were in the gray area of the chart) when the smart phone was invented. Do you think they went ahead and started building landline infrastructure throughout Africa?

Nope. They hopped innovations. They went straight from no phone to smart phones.

No only is the speed of adoption increasing, but technology is jumping over technologies.

With cell phones billions of people got to jump over landline innovation straight to mobile and smart phones.

Do you think 4.5 billion people are going to wait on banks to try and figure out a way to scale? This is analgous to trying to lay down landlines when a better, faster, easier technology already exists.

These 4.5 billion people are going to hop over banks straight to bitcoin. They are going to jump right into the flattened global financial system without asking banks or governments for permission. The internet flattened the world of information, products, and services.

The biggest flattener of them all is still on the way. We will truly enter a globalized world with bitcoin. When you connect 4.5 billion more people to the global economy without barriers to access, corruption, rules and regulations…we enter a world that is hard to imagine today.

Bitcoin is the “internet of money.”

Toys, Criminals, Regulation

“First they ignore you, then they laugh at you, then they fight you, then you win.”

Mahatma Gandhi

The people that control the digits of today, don’t like bitcoin.

From 2009 to 2013 they largely ignored bitcoin. “Bitcoin is dead” was a common theme. Ignorance is bliss.

From 2013 to 2016 bitcoin was a toy. They laughed at it. They mocked it. It “died” several more times.

In 2017 bitcoin is a Ponzi scheme. It’s dead. Again. It’s illegal and for fraudsters.

We heard the same story about the internet in the 90s.

Barnes and Nobel understandably pointed at Amazon proclaiming how dangerous it was to buy something on the internet.

We have a technology that is controlled by no one, no centralized group or organization, and is threatening the largest industry in the world – the financial industry. Governments and banks have no one they can silence or threaten because no one owns bitcoin. So instead they resort to fear.

When I hear threats and fear that government is going to ban bitcoin or regulate it to death, I laugh. Because the technology is here. There is no uninventing it.

Bitcoin is going through the path of adoption that all revolutionary technologies go through. I get excited when people call it a toy. When I first used snapchat, it was clearly a toy. Until it wasn’t. Facebook was a toy, the internet was a toy that couldn’t possibly scale, the first airplanes were toys, and the automobile was a classic example of starting as toy.

When cars first arrived, they were laughed at. They were slower than horses, broke down constantly, needed expensive gasoline. There were no gas stations, hell, there were no roads. They were a toy. But when toys start to grow up and get used, incumbents turn to fear.

Cars were no longer laughed at but were proclaimed to be dangerous. If you drove in one you were certainly going to die. Pedestrians were flattened by cars on a daily basis. Propaganda ran rampant.

But when mocking technology fails, and people stop buying into the fear, the powerful turn to regulation.

In 1865 the UK passed the Red Flag Act which required anyone operatoring a vehicle to have 3 crew members, the driver, engineer, and flagman who carried a red flag 100 yards ahead of the car to warn pedestrians that they were about to be flattened alive.

Guess what happened. Pedestrians were ok but the UK wasn’t. After revolutionizing industry with the steam engine, England led the world and were primed to win the automobile race. Shortly they were waving the white flag instead of the red. They lost the automobile race because they stifled it.

It’s hard to see what innovation can look like when the streets aren’t paved. It took infrastructure for cars to drive on roads…these roads are being laid on blockchain innovation as we speak.

Bitcoin is a technology that is going to disrupt finance, banks and money as much as cars disrupted horses, oil replaced whaling, and electricity made wood stoves exinct.

It’s going to hop over technology achieving a global penetration like the smart phone has done.

If we look at bitcoin, it’s been laughed at since its inception. It’s a toy. It’s dead.

We are now just moving into fear. Banks calling it a scam, government threats, etc.

Regulation is still coming. We are still early. Massive opportunity is still to be had.

Tidal Wave

This tidal wave financial shift is going to sink the old ships and rise others who jump on the wave.

Those in danger are the middlemen who always have their hands on your digits.

When it’s easier, faster, and cheaper to cut them out – they will be cut out.

This is a technology for the people. We aren’t going to lose anything. The only danger is missing the opportunity that exists today. The opportunity that is associated with being an early adopter of revolutionary technology.

Early Adopters

Those who think someone is going to pull them into their boat to ride this tidal wave are mistaken. If you think someone is going to come take advantage of this time in history for you that’s a mistake. If you think you are just going to be able to give some person/company some money who will take charge of your bitcoin, you are missing the entire thing.

The world is going to belong to those who take charge of their money, who take ownership of it, and take the little time required to get educated. We are still in the early adopter stage.

In 10 years, no education will be required, but in 10 years the ship will already be sailing and the life-changing opportunity for wealth will have been missed. We will all still benefit from the technology, but the early adopters will have benefited from getting in early. Being early has it’s burdens though. The burden of having to be proactive and get educated while the technology is still new.

So far most of the early adopters are tech people, but you don’t have to be technical to take advantage of bitcoin, and you don’t have to fall down the rabbit hole I did either. You just need to follow the right map.

Right now we are at the intersection of innovators and early adopters.

Many of the innovators have made millions if not billions already.

The Winklevoss twins, who you may know from the snafu with Mark Zuckerberg in the creation of facebook, are getting their redemption. They invested in bitcoin in 2013, this investment has already soared to over a billion dollars, and if they hold they could easily find themselves some of the richest people in the world sometime in the early 2020s.

The Winklevosses are nontechnical.

I read a story about a nontechnical 15 year old who has made millions being in the “innovator” area of the curve who said “if you are not a bitcoin millionaire it’s going to be your fault.”

I don’t think that’s true, but the opportunity is. Many people will miss the boat because they think they have to go down the rabbit hole to get in or maybe they do fall down the rabbit hole and don’t find their way out of it. Many people will buy into the fear and propaganda from banks, governments, and powerful organizations threatened by this technology.

People are busy and being in the innovator and early adopter stage takes proactive education and risk. Most people won’t take these necessary steps to take advantage of a historic opportunity. The few people that do are the ones we are already reading about. The people who turned a few hundred dollars into a few hundred thousand dollars.

I read about a homeless man who took his government subsidy and went from sleeping on the street into a million dollar house in 2017.

As The Economist pointed out: “Anyone clever or lucky enough to have bought $1,000 of Bitcoins in July 2010, when the price stood at $0.05, would now have a stash worth $46 million.”

With fortunes already made, it’s easy to think we’ve missed the boat. If you think this could be the case, you need to zoom out a bit.

For some perspective, if you take paper money and gold we have a $200 trillion dollar financial system. Bitcoin makes up 0.1%.

Roughly, if bitcoin has a $200 billion dollar market cap and we have a $200 trillion dollar economy, this 1000X difference is like $10,000 going to $10,000,000.

For the first and probably only time in our lives we have a truly legitimate ability to turn a a few thousand dollars into a few million dollars.

Historically, this size opportunity has been reserved to the uber wealth and venture capitalists who had the ability and access to invest in the likes of amazon, google, and facebook. These opportunities are blocked from everyday people.

Bitcoin is open to everyone.

A bank in your pocket

Remember the revolutionary promotion by Steve Jobs and Apple “A 1000 songs in your pocket.”

That was big.

But today it’s “a bank in your pocket.”

This is enormous.

The internet flattened the world. But money is still caught in hierarchy.

Bitcoin is the technology that flattens the finances of the world.

Today, if I send my contract employee money in Ukraine (yes this is real story) I go through my bank which charges a fee, that passes me to the local reserve bank (fee), which passes me to the Federal Reserve (fee), which passes me to the International wiring system (fee), which passes me to their central bank (fee), which passes me to their local reserve bank (fee), which passes me to their local bank (fee).

Imagine sending an email and it had to go through all these intermediaries, and they got to read your email and have their nose in all your business, and they charged you for doing it. 

This is what money is like today. Not tomorrow. Not with bitcoin.

Less thank 0.1% of the world owns any bitcoin.

If bitcoin becomes THE currency, the value of a bitcoin will be astronomical. It could be possible and sooner than we might think where 1 BTC is worth $1,000,000 and STILL be cheap.

Boom and Bust

Back in the 90s, we had the internet boom and bust. The dot-com bubble has many analogies to bitcoin. Both went through the typical revolutionary adoption stages from toy to fear to regulation. Both had scams and a lot of ways to lose a lot of money.

But also the biggest companies in the world were created during the internet bubble, the apples, googles, and amazons. We have at least this size opportunity with bitcoin, but instead of only a tiny handful of venture capitalists who had access during the dot com boom, we all have access to the bitcoin boom.

There are some important things to keep in mind, namely, the busts that comes after the boom.

Amazon is a good example – this is the history of their stock price and what $1000 would be worth.

You can see the “boom” in ’99 and the bust that followed hitting a low around 2001.

It took almost 7 years before their next “boom” that has lasted almost two decades.

Bitcoin has boomed, it has busted, and it will probably have periods that look like booms and busts again.

We are on the left side of this chart with bitcoin.

I think bitcoin is going to look very similar to this with the exeption that the 7 year “infrastructure timeframe.” My hunch is that those 7 years will be compressed to maybe 2 or 3 years.

This is why I don’t really care about whether we are in a “bubble” or not. We are on the left side of the curve, and I believe it’s going to look like the right side, just steeper and faster. What does it matter if the price drops 20% tomorrow or gains 30%? It’s short sighted. I don’t care about a short-term bubble if it’s a long term exponential curve up and to the right.

With Great Power Comes Great Responsibility

It’s estimated that 25% of all bitcoins have been lost.

With great power comes great responsibility.

There is a lot of technical jaron and misinformation. This combination scares people.

Understandably so.

The key is getting properly educated, while avoiding the rabbit hole and avoiding scams. The rabbit hole is deep, and many people will miss this opportunity thinking they have to fall into it, or the few brave will jump in a get caught up in the complexities and miss the forest through the trees.

Over 25% of bitcoins have been lost or stolen because people don’t know how to buy or sell bitcoin, at the end of this I’ll tell you how to follow a simple 10-Step Checklist that walks nontechnical people through getting started with bitcoin.

 

 

Scams and Busts

Just like venture capitalists that poured money into startups during the internet bubble that were nothing more than ideas with no business model lost a lot of money, there are over 1000 cryptocurrencies.

There will be many many more.

Which to buy? I’m fairly confident 99% of these will go to $0. Just like 99% of startups during the dotcom era.

Losing all your money is not only possible but probable for uneducated speculators.

With great power comes great responsibility.

I’ll tell you about incredible “top 1% information” about protecting your fortune, avoiding scams and avoiding hacks.

I cannot overstate this importance.

Mt. Gox was the biggest bitcoin exchange in the world for years.

It was the place to go to buy bitcoin.

Mt. Gox was hacked and just like that a half a billion dollars gone – which today would be worth far more and tomorrow would be worth an untold amount of money. This has happened again and again. Exchanges hacked, exchanges shut down. These people are breaking the cardinal rule that I will show you how to follow so this doesn’t happen to you.

But of the 25% of all bitcoin that have been lost, most are not even from hackers, it’s from people not knowing how to take care of their money. We have been conditioned to hand our money over to a bank. Conditioned to not have control over our own money.

Bitcoin is different. It’s actually your money now.

But you are also responsible for keeping it safe. This is the challenge of innovators and early adopters. With the opportunity and upside is the risk and education that is necessary to fully take advantage of that upside.

My goal is to help bridge the gap for nontechnical people. My goal is to help millennials like myself who are a bit “behind” in retirement savings, not only catch up, but secure their financial future with wealth beyond what seems possible right now.

My goal is to help educate and thereby empower you to own your future. The tech innovators rightfully got an early lead and have been handsomely rewarded. They deserve it. They are the ones who granted us this massive opportunity today.

This opportunity does exist for nontechnical people too.

I am going to break down bitcoin in plain English so average Joe can get in and win.

This is how I got in – Bitcoin for the nontechnical

When I was in my early 20s and I was spending money on risky startup stuff. I started a dental sleep medicine practice right out of school, which was unheard of. I invented a nasal device to treat snoring and sleep apnea, I launched an edtech startup that crashed and burned, a publishing company that released my first book, and I took all this “risk” and justified it by telling myself that when I turned 30 I was going to “get responsible” and start saving.

Like 50% of millennials, when I turned 30 I had $0 of retirement savings. Zero. My balance was actually quite a bit negative.

Luckily, it just so happened that this bitcoin opportunity appeared on my radar during my mid-late 20s.

Some times timing is just right.

I feel very very fortunate for this. Because I’m pretty confident I’m going to make up for lost time, and some, by being an early adopter of bitcoin.

When I was 26 is when I first tasted bitcoin, I got my first wallet in 2013, and by the time I was 29 I was fully submerged in the rabbit hole. By 30 I had dug myself out and was ready to do as I’d said, secure my financial future.

 

Bitcoin Checklist for the Nontechnical

The best investments I’ve made have been in myself and education.

The best bitcoin lessons I’ve learned I’ll share with you if you are open to owning your financial future.

By reading this article you can already check off item #1.

Check off the next 9 and you will be positioned to win in this technical game. Quickly. Easily.

The checklist is for people that understand value, see the big picture, and want to go pro, taking advantage of this time in history.

This is for the regular, busy, nontechnical person that wants to ride the bitcoin and blockchain wave into the future.

 

My motto for this checklist: A Little time today = lot of free time tomorrow.

A 1000 songs in your pocket was a big tech revolution. A bank in your pocket is a tech revolution of incomprehensible size.