Every once and a while, there’s a quirky little story that pops up about people who attempt to live on bitcoin.
Crazy concept, right? Not everyone thinks so.
If you recall, PYMNTS interviewed a newlywed couple in June 2015 who spent their first 90 days of marriage living and traveling on bitcoin and bitcoin only. Their conclusion: Glad they did it but glad it was only 90 days.
Now, imagine taking that number and adding about 1,000 to it. And try thinking about what it would be like to live on bitcoin for 1,095 days (three years). Well, you don’t have to imagine if you’re Olaf Carlson-Wee, a 26-year-old who works for Coinbase, a bitcoin startup.
Because that’s been his life since Feb. 2013 when he joined the company. His story was chronicled in a Forbes piece yesterday (Jan. 7), which dug into the details of how this young bitcoin enthusiast kept up with his expenses, relying only on the digital currency he was putting so much stock in (both inside and out of work). Of course, it’s a bit easier to get your paycheck in bitcoin when you work for a bitcoin startup.
But that didn’t make living in the real world, outside of the digital currency-loving walls of that startup, any easier. And like the couple we interviewed last year about their life on bitcoin, it meant finding loopholes to cross off all expenses, since bitcoin isn’t even close to mainstream adoption.
Still, Carlson-Wee stuck as true as he could to relying on bitcoin as his sole currency.
“It means that my ‘default’ currency is bitcoin,” he told Forbes in an email interview. “Dollars, when I need them, must be proactively traded for. This means my path of least resistance is to shop at merchants that accept bitcoin, to pay my rent in bitcoin and to store my wealth in bitcoin.”
And explaining the concept to friends and family wasn’t an easy feat, particularly since 2013 was a time before bitcoin was getting as much buzz (good or bad) as it does today. He was paying in bitcoin before it was “cool” and before the public knew anything about the now-defunct, bitcoin-funded marketplace Silk Road or its now-imprisoned leader, Ross Ulbricht (AKA Dread Pirate Roberts).
But why bitcoin? (Besides the fact that his job revolved around it).
“I view bitcoin as the more democratic version of money and value transfer, because no one controls it … I expect the Internet to be around longer than any nation-state, so a nation-state-backed currency is actually less safe than an Internet currency in my mind,” he said in a phone interview.
Buying online in bitcoin came easy, since sites like Overstock accept the currency. But for the expenses that had to be paid offline, that meant finding loopholes, like paying his roommate in bitcoin who would then pay rent in actual dollars. Or paying friends in bitcoin to pay a bill.
Talk about friction.
In theory, living on bitcoin isn’t quite as easy if you aren’t surrounded by likeminded people who believe in the digital currency as much as Carlson-Wee does.
More recently, however, Coinbase rolled out the Shift debit card, which makes it a lot easier to live in a world where bitcoin is not commonly accepted. The Shift card enables users to pay like any other debit card but then actually pulls bitcoin from a Coinbase account. Shift acts as the middleman and pays the merchants; the merchant never really knows about the bitcoin connection.
So, how has his mindset changed since 2013 when he began the journey?
“Now, my reasons for wanting to be paid in bitcoin are two-part. One half is speculative. I think the technology will get bigger, and the price of bitcoin will go up, so I’m speculating to increase my purchasing power. But I don’t intend to sell the bitcoin. I intend to hold it until there’s a day where I can just use bitcoin completely,” he told Forbes.
That will likely be a very long time.
He’s also into bitcoin for one reason that’s split the bitcoin community in half. The one half being the law-abiding citizens who look to bitcoin as an ideology that enables money to move without being controlled by the government (i.e, the security of money during a financial crisis). And then there’s the other side of bitcoin that’s given it a bad rap: the criminals who’ve benefited from the unregulated currency to live outside the law and away from the government’s hand.
“I think people have realized that banking and fiat money are not as secure as they thought or that money or dollars in a bank account are abstractions and may not be as real. To me, bitcoin is more tangible. I understand how to control it, the inflation rate and how it was created,” Carlson-Wee said in the interview.
Fair point on the first point but the second? There’s plenty of arguments against viewing bitcoin — a cryptocurrency — as anything tangible. Just look at the few hundred thousand bitcoins that went “missing” in the infamous Mt. Gox case.
In the interview, Carlson-Wee admits to the complexities that living on bitcoin add, like paying taxes, putting money away for savings or making investments. Those tasks get a little more complicated when the value of the currency changes frequently. Not to mention, one that goes from extreme lows to spikes, sometimes in a few weeks’ time.
After all, living on bitcoin makes his net worth fluctuate much more than the average person.
“It’s changed a lot. If you look at the bitcoin price from 2011 to now, that mimics my net worth in dollars,” he explained. “Getting paid in bitcoin, you have to be prepared for a roller coaster. I’m young, so I’m not worried about long-term savings, and I’m willing to take a lot of risk on something I believe in. It’s not for everyone. If I had children and was paying a mortgage, it would be different.”
And that about sums up what living on bitcoin is really about: risk. If bitcoin takes off, it’s going to pay off; on the flipside, it could drain his entire life savings.
Bitcoin Tracker Week 104: The Top Bitcoin News Of The Week
Bitcoin’s Latest Punch: The Mike Tyson Digital Wallet
Bitcoin has a way of finding itself in the middle of strange news, and its latest celebrity endorsement seems to follow suit perfectly.
That came with the announcement this week that Mike Tyson, the former professional boxer, would be rolling out the Mike Tyson Digital Wallet in connection with Bitcoin Direct.
In a release about the news, the company notes that this is the first celebrity-associated digital wallet and that it is aimed at bringing bitcoin mainstream. Not only will it enable buying and selling of bitcoin, but it allows users to get bitcoin at any bitcoin ATM around the world. The Mike Tyson Digital Wallet is now available for iOS and will soon launch for Android.
But this isn’t the first time Tyson’s name has shown up in a bitcoin story. A report in July showed that the former heavyweight boxing champion was getting into bitcoin by launching a bitcoin ATM.
And he did so in a very flashy manner, starting with the tagline on his site promoting the ATM: “Mike Tyson’s fastest knockout in the ring was 30 seconds. The Mike Tyson bitcoin ATM can turn your cash into bitcoin in under 20 seconds.” Iron Mike’s ATM, as it was coined, joined the Vegas Strip in August. The ATM was also rolled out in partnership with Bitcoin Direct.
The Fitbit Of Digital Currencies: Get Paid … By Walking?
With wearable fitness bands all the rage today, it’s no wonder the bitcoin community wants a piece of the action.
And two entrepreneurs in Africa have found a way to do so with a new app that enables users to get paid just for walking. Yes, that’s correct.
While people can actually only bank about $3 a day for doing so, this isn’t a practical option for most in the U.S., but for emerging nations, like many in Africa, this concept could really take off. After all, there’s plenty of people in villages living on just a few dollars a day already.
The free app, called Bitwalking, allows users to earn money just by walking and then puts digital currencies into their digital wallet. That money remains in the user’s account until they want to transfer or cash out.
Inspired by Nelson Mandela, Bitwalking uses one of his sayings to promote its product: “Money won’t create success; the freedom to make it will.”
Targeting the unbanked population that the company believes can benefit from such a concept, Bitwalking aims to help people make money simply by being active.
“A step is worth the same value for everyone — no matter who you are or where you are. What matters is how much you walk,” the company wrote on its website. “Most people are unable to generate and benefit from digital currencies, and large populations in the developing world are still left unbanked. We’re inviting everyone to take the next step.”
Cool concept, for sure, but what’s not quite clear is how the company actually makes money (or even breaks even).
Blockchain’s First Investment Of 2016
The year 2016 has already brought out a major investment for the blockchain industry.
Gem, a blockchain platform provider, announced Wednesday (Jan. 6) that it secured a $7.1 million Series A funding round, which was led by Pelion Venture Partners and participated in by KEC Ventures, Blockchain Capital, Digital Currency Group and RRE Ventures, among others.
“We believe blockchain technology will transform how people and companies interact,” said Micah Winkelspecht, CEO and founder of Gem. “It will underpin entire industries and, one day, produce a blockchain economy that will form the underlying architecture of our daily lives.”
In the past few years, the investment community has warmed up to the blockchain and bitcoin ecosystems, which, according to a report by Magister Advisors, has received $1 billion in funding since 2013. Projections for the next couple years call for that number to increase by another $1 billion in 2017. But for 2016, Gem marks the first of its kind to make such a funding announcement.
Bitcoin’s Price Jumps Above $450
While some industry projections peg that 2016 will be a better year for bitcoin, the digital currency sure stuck to its volatile reputation last week when it took a hard hit just after Christmas.
Following the holiday, bitcoin’s price took a dive of roughly 10 percent, according to price trackers, which showed that it dipped as low as $411.16 on Dec. 26. That’s a far dip from its December peak of $466.63 on Dec. 12. For the most part, bitcoin had been rising throughout December, giving hope that January would start out strong.
Now, bitcoin’s price appears to not only be back up but in a pattern that suggests better days are here to stay. For most of 2016, bitcoin’s price has been looking strong. It’s been on the rise since the beginning of the new year and has been shooting up in the past week.
Thursday’s (Jan. 7) price in mid-afternoon was already at $456.01.
Now, the real question: How long can that pattern stick?