“Bitcoin is just a chain-letter pyramid scheme. The state banned it long ago. This thing has no credit backing, nor is it legal tender, and the central bank strictly forbids financial institutions from participating. I myself bought some before, but luckily I came to my senses long ago and sold it all. Not only did I not make money, I even lost a bit—you tell me if that’s infuriating or not. I advise you not to touch it either. Don’t be a fool and end up as the sucker who takes the bag from the Americans; that stuff was all designed by them to rip off the Chinese.”
—The above is a standard answer that has been circulating these past few days for “how should you reply when asked what happened to the Bitcoin you bought?” I haven’t seen the original source; on Weibo, the earliest one I saw was this post.
This kind of joking reply reflects the embarrassment and anxiety that are common among veteran coin people. Clearly, people who understand Bitcoin find it hard to keep their mouths shut; they always want to tell the friends and relatives around them. It’s like the explorers who first discovered a new continent: if you only found a chest of treasure, then of course you might be able to keep quiet and make a quiet fortune, stash it away, and spend it slowly in secret. But if what you saw was an endless, uncharted continent, with inexhaustible mountains of gold and silver, and you knew this was not something a small number of people could monopolize, then you would be unable to resist sharing it with others: My God, guess what I saw—a magnificent new world! Faced with those who remain unmoved, we practically want to twist their necks and press their heads down so they’ll look: Don’t you see this grand prospect? Don’t you feel a thing? At least exclaim in admiration, won’t you?
This spontaneous “sales pitch” is not really a pyramid scheme, because Bitcoin does not have a downstream buyer. Your buying coins gives me no benefit at all. It’s like publicizing the existence of a new continent, or pointing out the location of mountains of gold and silver: of course there is an element of “let’s all get rich together” about it, but at bottom it’s mainly the pleasure of “bragging” — not empty bragging, but bragging about something real.
But this spontaneous “preaching” generally dies down after one or two sharp price surges. Many of the early coin veterans I used to follow have already faded from view. Of course, many of them probably just didn’t hold on and got off the train, but others may simply have kept a low profile themselves.
Why keep a low profile? One reason is precisely that when facing old friends, things often get awkward. Because when you were touting Bitcoin’s prospects back then, those friends didn’t listen at all; they only remembered “that person bought Bitcoin and is rich now, right?” So they come back to chat with you about Bitcoin.
What’s sad is that when they remember to talk to you about Bitcoin, even if it isn’t out of jealousy, it is mostly with a spectator’s mindset. They still have absolutely no interest in Bitcoin’s exquisite principles and grand prospects. They will never come ask you, “Hey, that Bitcoin thing you talked about back then—looks like it really isn’t child’s play after all. Tell me more.” Instead, they’ll only say, “Oh, so the Bitcoin you bought back then has gone up a lot, huh? You’re rich now!”
After hearing this kind of thing too many times, not to the point of panic, at least to the point of embarrassment. How should one respond? Keep sharing the exhilaration of that grand vision with him? Back then he wasn’t interested in it at all, and now it’s the same, at most with a little polite flattery toward a “big shot.” But if you answer, “Yes, I got rich,” what’s the point? Paying for a meal? One can only reply, awkwardly but politely, “Not bad, not bad.”
My recent article also mentions that these polite compliments are really awkward. The typical wording is, “You really had better judgment; I saw you talking about Bitcoin years ago, but unfortunately I didn’t jump in early enough back then.” What I feel like saying — and sometimes I really do say it out loud — is: “Actually, it’s not too late now…” The other person’s reaction is very likely to be something like a “you must be kidding” expression: “Now it’s way too high; forget it.”
Why is it awkward? Because this kind of compliment is practically saying: “Your judgment was really good back then, but now you’re a fool—at this price and you still think it’ll keep rising?”
Of course, what’s even scarier is that some people with unbalanced minds might do something more extreme. Although I believe that among my own relatives and friends there shouldn’t be anyone who would harm people out of resentment toward the rich, I wouldn’t dare say that about a friend of a friend. So keeping a low profile is always safer.
What’s even more unfair is that, in fact, I’m not all that fabulously rich either. True, I bought early, but because my principal wasn’t much to begin with, the wealth I’ve accumulated really isn’t much. Compared with the real “big shots” whose demolition-compensation houses are counted by the building and who own villas all over the country, it simply isn’t worth mentioning.
So the “standard answer” at the beginning easily resonates with veteran coin people; indeed, it’s the best method—after the deed is done, shake off your sleeves and go away, and from now on it would be best if nobody came asking. But I’m not the sort who lies, and I also can’t calmly say those words. In fact, even today my Bitcoins are all one-way in, never out; the most recent purchase was another 0.06 coin when the price was at $33,000. Maybe in the second half of this year I’ll really make a big expenditure (buy a house), and then I can unify the line: “Sold the coins and bought a house.”
I’ve been sighing for a long time, but actually I didn’t want to write this article for any of the above reasons; I wanted to start from my recent experience buying those 0.06 coins.
The first Bitcoin I bought back then was about 0.09 coin, I think? In any case, I spent exactly 100 yuan, directly transferred via Alipay to btcc’s boss, Yang Linke. The popular line at the time was that, whether you believed it or not, at least every person should buy 1 coin; even poor students, gritting their teeth, could scrape together the money. If it came to nothing, then just treat it as learning something new; if it succeeded, then even if not quite financial freedom, it would still be enough for most poor students to make a leap in class status. In fact, I said back then that even buying 0.1 coin would do. Those with the means and vision could buy 1 to 2 coins, and those who were doubtful or skeptical could buy 0.1 coin too. Practice yields true knowledge; at least you’d know what a wallet is and what a balance is. At that time, 0.1 Bitcoin was only a little under 100 yuan RMB; even a college student from a poor mountainous region could afford it, and even if you gritted your teeth and stamped your foot, buying 1 or 2 coins was not difficult.
In fact, at the time, the people in China who had the closest access to it were truly the poor students, because they could read English, and they knew a bit more about computers and the internet. Compared with middle-aged people, they also had little ideological baggage and not much vested interest. Buying Bitcoin was not even really a gamble; it was just a matter of learning. And this was indeed the case: the early participants in Bitcoin were indeed mainly young people.
But now the times have changed. During the final week of last semester, I even mentioned blockchain in a department meeting. What disappointed me then was that, in a room full of graduate students, after excluding those who were quietly making money, only one student said he understood blockchain, and he didn’t even buy coins. On the one hand I was a bit frustrated with them for not striving hard enough; on the other hand, I also genuinely felt that Bitcoin is no longer suitable for poor students to independently change their wealth bracket. It may require poor students to rally their parents before they can possibly make an effective investment.
The experience of buying 0.06 coin two days ago made me feel even more strongly the substantive change in the “threshold.” Back then, we could just trade through Alipay and easily buy coins. But now, buying coins requires passing several layers of KYC (know-your-customer) verification, and you also need to verify the bank card used to buy coins—for example, a salary card can only have transfer records from institutions or employers and cannot have personal remittance records. For poor students, the KYC hurdle is already hard to clear.
Of course, Bitcoin’s steadily rising price is also a new obstacle for poor students. This threshold is not reflected in the rise of the Bitcoin/fiat exchange rate, but in the increase in fees.
Because in terms of exchange rate, no matter how much Bitcoin rises, poor students still always have room to buy some. A few years ago we said we could casually buy 0.1 coin, so now let’s just buy 0.001 coin. But nowadays it’s much harder to get 0.001 coin in hand than it was back then to get 0.1 coin. That’s because at this point, Bitcoin transfer fees can no longer be ignored.
Bitcoin transfer fees are unrelated to the transfer amount; they depend instead on the number of bytes in a transfer message. The more information a transaction contains, generally speaking, the more fee is required. In other words, transferring 100 coins and transferring 0.01 coin cost about the same in fees, while transferring 1 coin may cost less than transferring something like 0.0013576 coin.
Of course, if you are willing to accept a slower verification time for the transaction, you can pay a lower fee. Back then, if you were willing to wait a while longer, you could even choose zero fees; these days, zero-fee transactions are almost impossible.
I’ve been paying attention to this recently a few times, and when things are congested, the dynamically recommended fee is 0.002 coin; under normal circumstances, it’s still around 0.0007 or the like. 0.0007 coin sounds very small, but in fact that already amounts to about 200 yuan, which is already at a level that poor students can’t ignore. Think about it: if you buy 0.001 coin, more than half of it goes to fees. The little bit you end up with may not even be spendable, because you’ll have to pay another fee when you do.
The actual situation is not quite so sad. In fact, poor students can hold Bitcoin indirectly, for example by keeping it in custody on a platform, or by holding other Bitcoin tokens or certificates. But it cannot be denied that Bitcoin’s threshold is getting higher and higher, and the window of opportunity for poor students to “bet their pocket money on the future” has almost closed.
Of course, this is exactly the focus of the Bitcoin hard-forkers’ siege: the problem of rising Bitcoin fees. They believe that the increase in fees is essentially due to the block capacity being too small—because the total number of bytes in a block is limited, the number of transactions it can contain is limited, and so in order to compete for this limited data capacity, traders need to pay increasingly high fees. So the forkers think, why not just expand the block capacity? But this is a stupid, treat-the-symptom-not-the-cause idea, like seeing a traffic jam and thinking all you need to do is widen the road. At most it can provide temporary relief; it does not solve the root problem, and it will severely damage the spatial structure of diversity. I won’t say more about the specific issues here. My next article on Bitcoin will discuss again how Bitcoin should solve the fee problem and become widely usable.
The key point is that, on the one hand, we can of course fondly recall the old days when poor students could buy coins with a flick of the wrist; but on the other hand, we should also admit that times are developing, and as Bitcoin enters the mainstream and even becomes dazzlingly glorious, it cannot forever rely on poor students to serve as the vanguard. For example, in the early days of the Scientific Revolution, many amateur enthusiasts could make major discoveries; but after modern science matured, the untrained “amateur science” people had almost no room to stand. Likewise, in the early days of the Age of Exploration, a shipload of convicts could go to the new continent, carve out territory, and found states; but once the new continent prospered, such good fortune was no longer available.
In Bitcoin’s brief history of development, the groups leading the trend have continually changed: from the cryptography circle at the beginning, to programmers’ open-source communities, then to the point where it started attracting libertarians and broad-minded university students, then to a large influx of adventurous investors and merchants, until today when large financial institutions seeking stable returns have entered the market, and in the future perhaps it will be a game played at the national level. One could say that each group has its moment in the spotlight for only two or three years; the disagreements and focal points in different periods are all different.
But in fact, there is still no need for despair, because as Bitcoin develops, the logic of participation changes as well. Today’s Bitcoin has long since ceased to be something that can be summed up merely as a “social experiment.” Buying Bitcoin is also completely no longer an act of “adventure,” “exploration,” or “pioneering,” but gradually becomes a general investment behavior. People who still use concepts like “pyramid scheme” or “fraud” to understand Bitcoin are completely off the mark. With Wall Street openly joining in, it is simply a normal investment product. Although the threshold is very high, that is only relative to Bitcoin’s own threshold, which a few years ago was infinitely low; compared with any international asset or investment product, Bitcoin’s threshold is still the very lowest of the low—U.S. stocks, let alone the U.S. dollar, are beyond the reach of poor students. Even speculating in A-shares, if you buy one lot of 100 shares at a time, and want to do anything with strategy, you need at least several thousand yuan of capital.
In short, as a trial object for a casual, offhand bet, Bitcoin is no longer suitable for the average college student. But if one takes it as an option for investment and financial management, college students still have a chance—or rather, such a chance will always exist. Even ten years from now, Bitcoin and its tokens may still be the best starting point for college students venturing into investment and financial management for the first time. Of course, by then the concept of “investment and financial management” itself may also have changed. At some point, Bitcoin’s dominant significance will shift once again—from a “financial investment product” to a “store of value for savings.” And by then, of course, today’s college students may well be trailing behind the aunties and uncles.
Translated from the Chinese original with AI assistance. The original text is authoritative.
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