"All other cryptocurrencies are decentralised in name only and seem to me like a solution in search of a problem."
I'm Florian, 26 years old and an entrepreneur. I studied physics and run the Proaktiv Podcast together with my business partner Friedemann. I've been following Bitcoin for almost ten years, but it took me a long time to really understand it. In the last two years, I have shared my thoughts on Bitcoin more and more often and plan to invest even more time here in the future. I am currently writing a book about Bitcoin.
X: https://twitter.com/bruceflorian
LinkedIn: https://www.linkedin.com/in/florian-bruce-boye-16a8b318a/
Proaktiv Podcast: https://open.spotify.com/show/29mUSFY0Zyn2l8VkGx7LVP
It sounds counterintuitive, but Bitcoin is the first and only ideal store of value.
The history of human progress consists of ‘recognising problems’ and ‘solving’ them. Historically, once a problem has been recognised, there has always been a series of makeshift solutions where something mundane has been repurposed until finally an engineer designs a perfect solution with all the important features.
Examples:
Lighting: To see in the dark, campfires, torches and candles were repurposed as lighting. In the 19th century, an engineer came along and invented electric light for exactly this purpose with all the important properties.
Communication: To send messages, we used pigeons and people as messengers or sent smoke signals. In the 20th century, an engineer invented the Internet for this very purpose of communication with all its important features, and the problem of storing value has existed since the beginning of time.
Until the 21st century, we misused other things to store our values. For example, we have used gold, shares or property. None of these were built by engineers for the purpose of storing value. They were misappropriated because they have some of the properties of a store of value, but not all. Bitcoin is the first and only asset in the world that was designed by engineers and fulfils all the properties of an ideal store of value (no inflation; no party that can influence; portable; divisible; accessible everywhere; no storage costs; transferable; ownable; robust; no counterparty risk, no execution risk, no lump risk, etc.).
In 2014, a friend showed me Bitcoin. I was 16 at the time and couldn't buy Satoshis because I didn't have a credit card. At 18, I got more involved with Bitcoin, but invested most of my money in my e-commerce company. At the end of 2022, when Ethereum switched from Proof of Work to Proof of Stake, I decided to focus exclusively on Bitcoin.
I realised that Proof of Stake centralises control and reduces the security of the network. Only then did I deeply understand that digital scarcity (Bitcoin) and not the blockchain is the real innovation. All other cryptocurrencies are decentralised in name only and look to me like a solution in search of a problem.
It helped me to understand Bitcoin better, as Bitcoin is essentially a fusion of economics and science. I got my science education from studying physics and my business education from the company, but it didn't help me understand Bitcoin any faster.
It took almost eight years from the time I first heard about Bitcoin to the time I understood Bitcoin enough to become Bitcoin-only.
Current balance sheet strategies weaken the company by decapitalising it and making it more vulnerable to crises. With Bitcoin, companies can build a strong balance sheet again for the first time.
Sounds counterintuitive, but let me explain:
Every company has a balance sheet and a profit and loss account. Put simply, the P&L is about how you make money. The balance sheet is about how you invest money and build up a healthy capital cushion.
Which assets are suitable for companies?
With an average monetary inflation of 7% p.a. (since 1960), it makes no sense for the CFO to have cash on the balance sheet. Shares may only be held on the balance sheet up to a maximum of 40 % (applies to American companies). Real estate is rarely suitable as a balance sheet asset as it is not liquid and cannot be divided. Government bonds are a common balance sheet asset. These have a yield of 4 % (3 % after tax).
On the other hand, investors expect companies to outperform the market index, usually expecting EPS (earnings per share) growth of 10 % per year. A balance sheet that only yields 3% is a drag and dilutes performance.
A CFO now has three options:
We have seen share buybacks in particular frequently in recent years, most recently with Apple and Sony.
In an inflationary monetary system, companies are additionally incentivised to finance all these things with debt to take advantage of inflation and favourable interest rates.
Where is the problem?
Purely driven by financial acrobatics, companies are now tempted to take on debt and decapitalise their company (dividends, acquisitions or buybacks). This is partly the reason for the high debt burden of companies. The debt appears in the income statement as amortisation and interest, so the balance sheet is no longer a financial cushion that offers the company stability in bad times, but a sword of Damocles that, in the event of a bad quarter in which repayments cannot be made, drives the company into insolvency.
Bitcoin is the only asset that consistently outperforms the market, is allowed on balance sheets, is liquid enough, divisible enough and carries none of the classic risks (counterparty risk, execution risk, dilution risk, location risk, etc.) By buying Bitcoin, companies are effectively making an acquisition of the best-performing asset of the last 1, 5, 10 and 15 years. In doing so, they recapitalise their company and build up a balance sheet that acts as a support instead of a sword of Damocles in difficult times.
I explain this connection in more detail in an interview with Niko Jilch.
I'm writing a book about Bitcoin. It will be published at the end of August. If you are interested in getting early access, you can register at https://bitcoin-bibliothek.beehiiv.com/subscribe and receive a thought from me about Bitcoin every week until the book is announced.
Since I've understood Bitcoin and incorporated it into my life as a branch of ecology, I've noticed how my time preference has changed and how I think more long-term. I exercise more, am more disciplined, am more optimistic about the future and feel less dependent on political developments, all of which forms a solid foundation for a healthy mindset. :)
As a savings technology.
People spend 80,000 hours in their lives working for money but have never been taught what money is. This is where I would encourage personal responsibility. Based on my experience, there are two reasons why you haven't looked into Bitcoin:
1. you've researched it superficially for four hours and formed your short-term opinion that Bitcoin is pure speculation.
2. you feel like you've missed the boat and that the topic is therefore not a sensible allocation of your time now.
My answers to this are:
1. I don't know anyone who has a negative opinion of Bitcoin after looking into it in depth. The critics are basing their criticism on thin foundations.
2. the train has by no means left the station. If Bitcoin is the ‘world's store of value’, we are not even at 0.4% of its potential.
In principle, it is always worth researching things where the majority has an uninformed negative opinion on the subject.
A successful friend of mine once said: ‘Florian, you make money when you're right and not in the consensus.’ Where should you start? In episode #97 of the Proaktiv Podcast, I gave a detailed rundown on Bitcoin. If you're new to the topic, you've come to the right place.
In the absence of an ideal store of value, the following quote comes to mind to describe the status quo: ‘We run as fast as we can to stay in place. If we want to get ahead, we have to run twice as fast", (from the book “Alice Behind the Mirrors” by Lewis Carroll)
What does this mean?
In the absence of an ideal store of value, it is becoming increasingly difficult to afford the simple dream of owning a home with a family. Since 1971, we have gone through the following stages of development:
1. a man was able to finance it alone (1970).
2. + the woman had to help out (1980s).
3. + both had to take out a loan (2000s).
4. + both had to invest their money on the side like a hedge fund manager (2010s).
5. + Both try to open a business on the side (2020s).
6. + Both decide to have only one child (2024).
7. + Gambling increases (sports betting, memecoins etc.).
8. + Both decide not to buy a house? (2026)
9. + Both decide not to have a child? (2028).
Many suspect the culprit is capitalism. In reality, the problem lies in inflationary capital. With Bitcoin, there is hope that this trend will be reversed.
Convinced by this interview? Get the Coinfinity app and start saving in Bitcoin now!
