When I first heard about Bitcoin, it was around $10. My impression at the time was that it had no cash flow and no potential future cash flow, and the whole thing sounded like a pyramid scheme (I was not yet aware of the distinction between a pyramid scheme and a Ponzi scheme). I didn’t invest.
With the benefit of hindsight, this was a huge mistake. The part that bothers me is that I don’t know what was wrong or missing in my world model that led to that mistake.
My question for people who bought Bitcoin early on is why. What did you understand at the time that I didn’t?
Usable electronic cash would be very valuable. At the time electronic payments excluding credit cards (which come with considerable overhead and an odd feature set) were even more inconvenient than they are today. If there was a new currency that served as electronic cash for the world, it would want to have billions or trillions of dollars circulating, so Bitcoin would be undervalued by thousands of times. Although Bitcoin wasn’t and isn’t yet suitable for scaling to mass adoption, the basic technological breakthrough was surprising and relatively unexplored, and it seemed like the development community was excited and healthy and that further innovation might take it in that direction, so it seemed like an extremely +EV bet.
I would say that this thesis stopped making sense around the time that the Bitcoin Cash fork happened, since it became clear that Bitcoin was not going to significantly technically evolve, so it would always be slow and expensive to use. And Bitcoin seemed to continue succeeding after that for reasons I don’t understand. So it sort of only pointed in the right direction by luck.