I’m writing this post as a cautionary message to anyone reading this blog page who has been struck with the zeal for Bitcoin and wants to begin owning some. Be warned: you will make mistakes that might end up having a dollar value attributed to them, and that’s probably going to be your best teacher throughout your journey. Regardless of that, I’m outlining a few prerequisites in this post which I believe are essential for everyone to meet before they dive into Bitcoin ownership.

To begin, I’ll start off by saying that if you want to own Bitcoin but don’t have a clue what it is, keep your distance. Bitcoin is an intricately complex, revolutionary, and new technology. If you’re just buying Bitcoin because you have major FOMO (fear of missing out) due to the gains influencers online are touting, I have news for you: you’re NGMI (“not gonna make it”). Before jumping in, an understanding of not only its technological foundations but also its role in financial systems, its security mechanisms, and its market dynamics is essential to harnessing the power of Bitcoin. Blindly jumping into Bitcoin ownership without this knowledge is just asking to get burned by the market and poor decisions.

Let’s also talk about the huge elephant in the room: Bitcoin’s volatility. Compared to more traditional investments like mutual funds, Bitcoin’s price swings can be extreme. Just this past week, Bitcoin dipped below $90,000 for a brief moment before rising just above $100,000 yesterday. To put this into reference, the price swings of today’s Bitcoin were the price crashes from 7 years ago. So, if you are a panic seller and someone who is prone to emotionally driven decisions under pressure, Bitcoin is not for you. Until you’re comfortable with the possibility of waking up to find your holdings have crashed in value, you had better hold off for now. Even if you’re fully convinced Bitcoin is destined to reach $1,000,000 by 2030 or whatever, you need to be prepared for the emotional resilience required to endure gut-wrenching crashes along the way. Bitcoin ownership demands a long-term mindset and the ability to stomach significant short-term turbulence without losing sleep or stressing 24/7.

When I dumped $1,000 into Bitcoin and Cardano during the last cycle in 2021, I knew that I had already made a mistake. I really had no foundational knowledge about Bitcoin and alt-coins besides the fact that they had been doing really well price-wise in previous months. Given all the hype surrounding the cryptocurrency space at the time, I can shamelessly say that I fell victim HARD to the waves of FOMO circulating online. Shortly after I bought in, I watched my holdings drop to less than half of their worth over the course of a year. I never sold; however, psychologically, I got burned by that whole fiasco.

Ok, but let’s entertain the scenario where you understand the technicalities of Bitcoin well and you’re confident you can handle the volatility and risk, but you have no idea how to properly store your Bitcoin. Ownership demands a commitment to personal security. If you’re not prepared to take responsibility for safeguarding your private keys or understanding the risks of storing Bitcoin on exchanges, you’re setting yourself up for potential loss. Unlike traditional banking systems, Bitcoin’s decentralized nature means there are no third parties to recover lost funds. If you lose access to your wallet or fall victim to a phishing scam, the consequences can be irreversible. A vague understanding of cold and hot storage, single-sig and multi-sig wallets, centralized vs. decentralized exchanges, KYC services, or seed phrases just opens you to the possibility of losing all your hard-earned Bitcoin. I highly encourage everyone to read up thoroughly on how to properly store their Bitcoin; there are plenty of articles online that are brief and informative on this topic, which I have read in the past to help me gain a better understanding and to safely own Bitcoin.

To summarize, Bitcoin isn’t for everyone. Owning Bitcoin requires education, emotional fortitude, financial stability, dedication to security, and some insanity. If you lack these traits, it’s better to admire Bitcoin from the sidelines and invest in your cute little mutual funds rather than dive in unprepared. Bitcoin is revolutionary, but it’s not a guaranteed path to wealth, and for some, it might not be the right path at all.

So before you consider buying Bitcoin, take the time to assess whether you truly understand and are ready for what it entails. It’s better to stay informed and cautious than to rush in and regret it later.