I want to tell you the ironic story of how this Nigerian Millennial became obsessed with Bitcoin.
The year was late 2016, and Nigeria was again suffering another bout of currency devaluation influenced by the 4-yearly election cycles, the politics, and campaigning, which usually leads to monetary debasement. The purchasing power of the Naira was also worsened by a fall in global oil prices, as oil in Nigeria is its most crucial commodity export. There was a period of a rapid rise in the cost of food items, energy, transportation, rent, and all other goods in the market, affecting every Nigerian.
In the usual fashion, due to desperation, most Nigerians got involved in internet Ponzi schemes to make a quick buck to afford the run-away prices. That was how I got involved in MMM; the most popular internet Russian-based Ponzi scheme. This scheme promised you a 30% return on investment in 30 days! This was indeed very tempting as friends, colleagues, and family members kept going on about how this was a real investment and was worth it.
I was a Medical Doctor working in the financial capital city of Lagos with three children, all of whom were entirely dependent on me. With rising costs, it is easy to see how this scheme appealed to anyone earning and saving in a deflating fiat currency: Naira.
I started putting millions of Naira into this MMM Ponzi scheme to gain some returns initially. I had a false sense of financial freedom at the time, although being a critical thinker, I was aware that such a system was not sustainable. However, I kept funneling more funds towards this scam. The scheme imploded in Naira, robbing large swaths of people. However, another version of the same method (MMM United), dominated by Bitcoin, was introduced down the line.
This version promised a whopping 100% rate of return in just 30 days! Seeing the enormous benefits already gotten from the Naira version, I decided to participate in this MMM United. I had to learn how to use the available peer-to-peer exchanges to acquire bitcoins. A single bitcoin was trading for around $600 – $700. My initial investment into this scheme cost me two bitcoins, and I was lucky to get back over three bitcoins before the strategy failed, as usual. Feeling lucky, I decided to use some of the money to continue on the Naira version, which was still ongoing. I made some gains, but eventually, I lost almost all my initial investments, like all Ponzi schemes.
Coming off this Ponzi scheme, I still had some bitcoins leftover but unfortunately sold them off in one of the numerous China-ban FUDs in fear of losing everything. A big mistake as the price of bitcoin reversed and kept making higher highs in just a few days. This was the point where I started developing an interest in cryptocurrencies in general, asking myself: ‘why does this internet magic money keep going up in the face of all the hostilities from China and other unfriendly governments?.’
Like most bitcoiners, I first started learning and dabbling into altcoins with the thought that I had lost a lot of bitcoin and needed to trade to make up my initial stack. However, this led to further loss of bitcoin leading up to 2018. The ICO craze of 2017 and 2018 caused me to make further mistakes in hopes of earning more bitcoin from altcoins.
Finally, in late 2018, deeply scarred by a brutal bear market, I decided to truly learn why bitcoin is different from ‘crypto.’ Going down the Bitcoin rabbit hole was a beautiful and eye-opening experience, which most days left me speechless. It led me to ask the fundamental question: ‘What is Money?’. Asking this question was the turning point for me, and it led me to discover why the world has the issues that befall most of us. I found out what happened in 1971 and why we use useless paper as money today.
Before 1971, families enjoyed modest lives, saved, and had a low-time preference. In many homes, only the man worked while the woman stayed home tending to the house and the kids. After 1971, with the fiat standard, inflation became rampant, and women had to actively join the workforce to make family income meet up with expenses. As inflation went further, the labor of the man and woman still failed to meet the ever-growing costs. Incentivizing the family unit to begin borrowing debt to meet run-away prices, enticed by banker money changers to take loans for daily expenditures. I learned how a dependent debt system eventually leads to a situation where families cannot pay their debts. This debt leads to agitation for more social welfare, health benefits, government control, and more currency printing which worsens the initial problem in a vicious cycle.
The fiat system was the true Ponzi scheme. A system that required more participants and more labor from older participants to get the same or worsening benefits out of the system. If unchecked, I saw how this system would lead to the rise of populist politicians who come in promising to change things but never attacking the root problem. Every politician and their economic team realizes this problem and is aware no single person can never solve it via political means, so they keep printing more and more fiat paper to pay off debts on old loans with interest. I thought to myself: ‘But this is how a CLASSICAL PONZI SCHEME operates!’ : bringing in currency from new participants to pay off old participants.
Like all Ponzi schemes, I realized that the participants would suspect something wrong and would begin dumping their fiat currencies one day. This will lead to an international bank run as the world scrambles to acquire the most demanding money available or anything that can store its value. At this point in my bitcoin education, I read The Bitcoin Standard by Saifedean Ammous, listened to several podcasts on Bitcoin by leading Bitcoin educators in the space, and started dabbling into Austrian Economics. Like gold in the industrial age, I did not doubt that Bitcoin would be that money that people will scramble for when sh*t hits the fan in this information and technological age.
I have been saving the proceeds of my labor in this unique immutable, proof-of-work system, knowing that it will be available for me in the future when I need to exchange them for the labor of others in the global marketplace. Even with the disastrous financial and macroeconomic environment we are currently witnessing, I have seen nothing that trumps saving in a bullet-proof savings technology: Bitcoin. With raging inflation worldwide, the massive rise in prices of goods and commodities, and collapse of fiat currencies in some underdeveloped nations, I sleep well at night knowing that my time and energy are safe in Bitcoin.
This is a guest post by Ragnar. Follow him on Twitter @AisARagnar. Opinions expressed are entirely their own and do not necessarily reflect those of Satoshi’s Journal or Satoshi’s Entertainment Company.