Cryptocurrency and Financial Freedom

Now this may be personal, but the reason why rich keep on getting richer and vice versa is because it is very difficult for an average joe to access that information that holds the key to exponential growth of your portfolio. Just think about it. Even if you do all the required analysis and due diligence, you’d still be playing at the mercy of a promoter– a central authority who runs he show and owns the most of the company. There is a substantial chance that you know about a coin or a stock when it has already reached it’s top.

But times are changing. Cryptocurrency and blockchain are at the heart of this change. Driving it from left right and center. So, in today’s blogpost, we talk about how cryptocurrency is the key lever of one’s financial freedom. But before that, let me quickly set the context of what financial freedom is:

Financial Freedom:

My take on financial freedom is rather simple. Contrary to the popular belief, financial freedom is not having a lavish lifestyle and not having to do any work anymore. This freedom has more to do with time than money. We are forced to take certain decisions against our will just because we don’t have the means to survive if we go down the road less trodden. It’s the great old rat race I am pointing at.

There are a few elements to this way of living. This image from ETMoney puts it beautifully.

But Why Cryptocurrency?

Coming to the topic of the day. Why is cryptocurrency placed to help us achieve our dream of financial freedom? Why is it different from other asset classes? Here’s a quick 4 point analysis:

A. Transparency:

Stock market is highly regulated. But every now and then we come across incidents of operators taking undue advantage of the uninformed retail investors. In a recent example of Adani Enterprises, the growth that happened in the shares of group companies was definitely fishy. Why? Because despite information being available in the public domain, people have found loopholes.

Now consider the other end of the spectrum. This time around regulation is taken away from the hands of a central body and given to a technology called blockchain. Everything is out there for anyone to see. You can find out who is holding what percentage of total coins (whales).

Apart from that, you can view each transaction that would give you a fair idea of what’s happening in the market. This information is of course available for stocks as well but not to the extent where you can see the addresses of the people in the transaction.

B. Gargantuan Gains:

I am not talking about the shit coins here. Consider Bitcoin or BTC for example. No body is stranger to the types of gains it has given in the past 10 years. Beating every other asset class to blue. Even it’s closest counterpart- Gold has no match to the type of return it has generated. We are expecting to see more such instances with the evolution of blockchain technology.

On a lighter note, the community has stopped talking about returns in %ages. They deal in ‘Xs’ now. Returns are 5x, 10x and what not. These returns will most definitely put you on the path of financial freedom.

C. Deflationary:

While this property of cryptos applies to certain coins like BTC, LTC only, it is worth a discussion. By the very nature of rules set in the blockchain related to mining and halving, these coins are capped at a fixed maximum supply. Unlike fiat currency, which is not backed by any asset, these coins can’t be minted recklessly. Therefore, it only makes sense to save in them.

Some people in the community also feel that there is no point in saving in fiat when government can literally print that money and devalue your assets. While that is an unlikely scenario, I would recommend every financial freedom aspirant to save some percentage of their portfolio in deflationary assets like Bitcoin.

D. Money Management:

This rationale is absolutely personal and I am sure a lot of you would resonate to it. While you are learning about cryptocurrencies it is not possible to have a siloed vision. You need to holistically evaluate and understand the history of money, the flaws of existing financial system, key concepts of economics and whole lot of chunk of technology.

While most of the asset classes are a subset of financial literacy, cryptocurrencies are at a much more fundamental level. You learn so much about money that financial freedom becomes an attitude at that point. Therefore, if you still haven’t tapped the full potential of money, start with cryptos and you shall find your path.

Conclusion:

There is another aspect to cryptocurrencies which I haven’t touched in this blogpost. It is the spiritual one. Yes. When a piece of code challenges whatever you have learnt so far, the experience is quite difficult to put in the words. But that’s a topic for another blogpost. For now, let’s relish this sweet pair of cryptocurrency and financial freedom.

Got questions? Want to take it to the next level? Reach out to me using your preferred platform from the links below

Until next time..

For our beloved “non readers”, I also do quick carousels on these topics over Instagram. Come join the fun. Hit me up here.