Bitcoin Pizza Day – a Valuable Lesson for All
n May 22, 2010, the first real world
transaction with Bitcoin took place. A bitcoin miner paid 10,000 BTC to buy
some pizzas. 10,000 coins of BTC was worth only $41 USD at that time.
Both the buyer and the seller didn’t know that 10,000 BTC would be worth
roughly $300 million in 2025, and neither did they regret what they did then
(for they could have held the coins if they had the idea of how much Bitcoin
would be worth only 10 years later).
$41 USD is roughly equal to N65,000 today. But in 2010, $41 USD was worth only
N8,000.
Imagine, investing N8,000 NGN about 15 years ago, to cash out N480 billion NGN
today? Is there any investment that can beat that?
That brings us to the most valuable lesson in investment.
CZ, the founder of Binance, is known for this famous saying “If you can’t hold,
you can’t be rich.”
Too many people all over the world
approach trading and investment with a gambler’s mindset. For most of them, 20%
per annum is too small.
If you plant maize (corn), it would take 3 to 4 months for it to grow and be
ready for consumption. When you grow yam, it may take 5 to 6 months for it to
be ready for sale.
Cash crops like kolanut take around 5 – 10 years to grow. OK… A cacao tree can
take up to 3 to 5 years to grow.
However, people want their investment to multiply constantly within shorts
periods of time.
A few years ago, one landlord died in our community... He died at a good old
age, and when his children checked the receipt, which was issued to him when he
bought his land, they saw that he paid N5,000 for that land about 35 years ago.
But the land is worth at least, N15 million now.
Can you see, it took around 35 years for the value of that land to move from N5,000
to N15 million.
How long do you think you can hold a bar of gold before it makes 100% profits?
How long will it take you to gain 100% profit from a piece of land, once you
buy that land? If you build a house, renting it out to tenants, how long will
it take you to recover your money (please factor in the costs of maintenance of
that house)?
And I have seen people selling their property at loss, especially if there is
an extremely pressing financial need. And selling a property can sometimes take
a lot of time, because serious buyers may not come as soon as you would imagine.
When you rent a shop and stock it with goods, how long will it take you to make
back the initial capital which is used to start the business (and you will
continue to pay rent and utility bills)? And too many small scall businesses
like this tend to fail quickly.
However, we usually approach online trading and investment with irrational and
myopic expectations.
The reality: Some coins will go to zero
and/or disappear. Some coins will remain flat in value, while some coins will
bring only modest gains. But some coins will bring unusual amount of returns.
Remember Bitcoin’s Pizza Day.
The only way to grow rich is to hold your investment for the longer term. The
best thing is to hold indefinitely.
Once again, if you can’t hold, you won’t be rich.
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