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What the Native Settlers in America can teach you about Bitcoin investing?

Posted By: Admin

In the early days of the new English settlement in North America, land was aplenty and people limited, unless people used the vast lands to create ranches to engage in enterprise, there was no possibility that the land could be productively used and if people were  not earning income, how would they pay taxes and provide for nation building ?

The manner of land allotment was thus…at dawn on the stipulated day, the people who applied would assemble on horseback and will ride out in various directions from the centre of  the town. Whatever point they rode upto by 12 noon, was marked and  became their land for a nominal price for them to use and generate their income. Now some of the industrious ones rode really fast and reached out to a larger piece of land. But there was a problem, the larger you got, the more you were exposed to the Red Indians( the natives) who would attack the new settlers, destroy their ranch and in many cases also kill them. While the land was cheap, it was practically impossible to protect, Red Indians were adept at guerilla warfare and difficult for an established army to provide complete protection from. 

Most of  those who rode fast and got large pieces of land  ended up dying to protect it or  selling them cheap due to the risk of death in the hands of the Red Indians. The ones who thrived were the ones who took more compact( lesser parcels of land) closer to the town( so that they could get help easily if they were attacked) and slowly but surely over the years they increased their boundaries to make their Ranches bigger ( albeit at a slightly higher Price). 

So the early settlers had discovered that ;

  1. With Fantastic Gains , came hidden aspect of incredible Risk ; 
  2. Making small but incremental progress can limit risk and help build a large Ranch over a period of time with very limited risk.

 

Today investing in Bitcoin or any digital Currency we face the same prospect as the early settlers,  without any regulator or regulations in place, your investments could easily end up in smoke ( literally). However we also recognize that there is something alluring about a currency that is entirely digital, that is bereft of any governmental and political influences and with features that would have made our traditional paper backed currency a better one. So investing in Bitcoins is alluring to say the least. But the volatility that we have seen in recent times is enough to give anyone a heart attack .

So as with the early settlers, wait for a little bit more clarity to buy even if it is  slightly higher or if you want to  take an early advantage, then do it in extremely small quantities in a SIM ( systematic Investment Mode) and build it over a time as you build conviction in the asset class. As we speak now Bitcoins or any digital currency is fraught with huge risks, you must only invest that quantum that you are willing to lose if things turn bad. 

Safe Harbor  :  Please note neither Finsherpa nor Babu Krishnamoorthy have any personal interest in Bitcoin or any other digital currency. You are expected to use your own discretion before committing any investments in bitcoins or any other digital currency.

By 

Babu Krishnamoorthy

Chief Sherpa, Finsherpa 

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