2022’s Biggest Takeaway
Not your keys, not your coins.
2022
Goodbye 2022, hello 2023!
“Not your keys, not your coins.” It’s the biggest takeaway of the year. Bitcoin held on an exchange is just a credit for those coins—an IOU.
The entire point of bitcoin is to avoid third party custodians such as exchanges and, unfortunately, a lot of new and veteran users learned that the hard way in 2022. It really upsets me that bad actors like FTX and Sam Bankman-Fried continue to deceive honest people who are just looking for exposure to the crypto space.
That’s why I’m beating the drum of self-custody in the new year and ensuring it’s the first topic that any new subscribers encounter.
FTX might be the biggest story of the year in the crypto space but it provides us the opportunity to reiterate bitcoin’s key value propositions.
Cathie Wood might’ve put it best this year when she said that bitcoin is the “first global, private, digital, rules-based monetary system.”
Events like the FTX bankruptcy and the Terra collapse only serve as a reminder why bitcoin exists. These companies, crypto projects, and altcoins are not bitcoin, will never be bitcoin, and really shouldn’t even be compared to bitcoin.
I’ll continue to remind you about the importance of self-custody and holding your own keys (and explain what that means for newbies). For now, let’s recap three posts from this year that made an impact.
My Fav Post
In the same vein as everything mentioned above, my favorite post of 2022 is one that addresses the solution to these unfortunate bankruptcies and scams head-on.
If you revisit one post from Bitcoin Binge this year, make sure it’s this one—Holding Bitcoin Off Exchanges. I give you the basics of what an exchange is, what self-custody is, and discuss risks, best practices, and bitcoin wallets.
It’s an essential primer for anyone new to bitcoin or looking for an easy-to-read refresher on why we bitcoin.
Most Popular Post
The most popular post of 2022 in terms of email opens was… wait for it… A $40 Billion Fiasco! Before FTX, there was $LUNAcy and the collapse of one of the most talked about altcoin projects in the space.
Terraform Labs was the first domino to fall and really rock the industry in May. After that, the word “contagion” defined the second half of the year.
It felt as though another custodial platform, exchange, or hedge fund revealed itself to be insolvent or on the verge of insolvency each new week after the Terra collapse.
Looking back at my first post about the initial fallout, I’m reassured to see that I took it as an opportunity to highlight self-custody and other bitcoin best practices, even emphasizing the above mentioned mantra—Not your keys, not your coins.
Sentimental Post
2022 marked the end of an era for me and a lot of other crypto miners out there. Ethereum, the world’s second largest cryptocurrency behind only bitcoin, transitioned away from proof of work. “The Merge” occurred and did away with ethereum mining.
In 2020, I built an ethereum mining rig for under $1,000.
It was a COVID hobby that gave me a chance to do something more tangible in the space. Mining ETH was fun, introduced me to a lot of interesting people, and was a more affordable way than bitcoin mining to earn some extra BTC. I mined ethereum and converted my earnings to bitcoin.
I also learned a ton about proof of stake versus proof of work cryptocurrencies and, for better or worse, solidified my belief that ethereum’s merge to proof of stake wasn’t great for the future of the network. That’s okay. It was yet another example of a scenario that highlighted key differences between bitcoin and something else garnering loads of attention in crypto.
2023
Bring it on!
I’m ready for 2023. I’m ready to participate more in the bitcoin community, share even more stories, learnings, and best practices. I’m ready to onboard anyone interested in “this crazy bitcoin thing.”
I’m not going anywhere. I’m here for you in the new year. 2023 is primed to be a big year for bitcoin and bitcoiners like us.
Bitcoin trades and operates around something called the halving. This is an event, built into the bitcoin network, that occurs roughly every four years. The next halving… is NOT in 2023! But, it is happening in 2024 so the year ahead will be critical. As of now, it looks like the halving will occur in mid-2024.
When a halving occurs, the amount of bitcoin that miners receive for their work confirming transactions and securing the network gets cut in half.
Halvings make bitcoin more scarce.
The last halving was in May 2020. Typically, bitcoin enters a bull market soon after a halving then corrects and trades sideways or down before another push upward.
Long term, bitcoin has appreciated significantly between halvings. The first halving was in 2012. The second was in 2016 and the latest was in 2020.
$1,150—high after 1st halving
$19,900—high after 2nd halving
$69,000—high after 3rd halving
The lead-up to the halving is something to watch in 2023. I’ll tell you more about halvings, what to expect, and how to prepare in the coming year.
The main thing I’m excited for in 2023… you may already have guessed it… more bitcoiners taking ownership over their funds. Yes, it’s that self-custody topic again! But, it’s so much more than that.
More bitcoin than ever before is being held in cold storage and self-custody wallets. That number only continues to rise and it means that people are taking their coins off exchanges and learning how to really hold and use bitcoin on the bitcoin network itself. This trend should also increase going into the next halving.
Start fresh in 2023.
Learn about bitcoin, self-custody, and why any of this stuff matters. If you’re newer to Bitcoin Binge, I recommend reading my favorite post of the year first and then exploring the rest of the site from there.
Some goals for 2023…
…from a newsletter POV:
new posts every Wednesday
monthly reports every 1st
more easy-to-read resources
like this: Baby Steps
more personal essays
I’ll still plan to send any breaking news posts whenever I can and am otherwise always hear to chat. Just comment below.
Or, connect on Instagram!
Have a great final few days of 2022. I look forward to chatting with you more in 2023 and will kick things off with the December Monthly Report on the 1st!
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I am not an investment or financial advisor. All opinions expressed are mine alone. Read the full DISCLAIMER on the About page.
HODL on Garth.