My Take on an Online Dating Site

This is how I would build an online dating site.

Several of my friends met their partners through online dating but despite that most people I know have had bad experiences through the process.

I was having a discussion recently with a few female friends of mine about the subject and a few interesting things always seem to come up, one being there are a lot of guys messaging them for unwanted sex or misrepresenting their availability for a relationship. That’s to say my female friends get a lot of dick picks and go on coffee dates with guys that happen to be married.

Guys on the other hand have to send a lot of text messages that are generally a poor way of making proper introduction because they don’t convey what people are like in person. I’m also surprised at how many bots and scammers run through dating sites.

Then there is the issue of harassment and general rude individuals. I wonder if a lot of bad behaviour that puts people off of dating could be helped with more social interaction and mentoring. A lot of people go about looking for a relationship in really immature ways that they would never act out in a work or family setting. A few good friends to point out missteps or opportunities may be all it takes for some.

Given all that, here is how I would build a dating site. It’s all about playing matchmaker.

As a user you would sign up with a few pictures and short biography but you can’t message other users right away. You then mark down a block of time in a calendar that you are available for a voice or video conference chat. The site would set up short conference calls to take place with two other users that have the same time available. During the call you get to know new people and make some notes about them. The purpose of the call is not to find someone that you will date but rather to find people that you enjoy talking with so that you can  play matchmaker when you find two other people you think would make a good pair.

The calls would generally start out in short blocks of time between two other people of a random gender. Sometimes this will mean two guys and one girl, one girl and two guys or three guys or three girls depending on preferences. After speaking with several people you will build a list of the ones you enjoy speaking with and then eventually you can recommend matches between the ones you think would be good together.

When someone recommends a match for you a notification will come in and you can message them. In the meantime you can enjoy getting to know new people and help introduce others. If the people you match like each other you get some internet points that would bump you up in the priority list to help boost your exposure. I would imagine people good at finding matches would be desirable friends.

I like the fact there is no immediate expectation when chatting with new people. I also find speaking is a more comfortable way of communicating than texting/typing.

People who typically receive too many messages would only receive recommendations from friends based on an understanding of who you are and what you are looking for.

Alternately people who typically send lots of messages and don’t receive a lot of feedback would be able to build a network of other like minded individuals to talk to and share advice, interests, ideas, etc.

An important characteristic of this set up is that it encourages you to get to know others and put in work towards finding matches. It makes the matches that occur more rare and significant. It feels to me like a more natural way of interacting with new people.

Ultimately it would be a place for everyone to enjoy conversations with new people, expand social networks and potentially find a great relationship match.

There are a bunch of fun variations that might be interesting to try for example allowing people you speak with to add to your public profile. Maybe one day I will build something like this. Let me know your thoughts.


I was speaking with a person close to me that has been diagnosed with manic depression. In the past they attempted suicide several times and would say that a lot of their life has been consumed with issues from their past that inhibited to varying degrees socializing, school, work and relationships. We have known each other for almost a decade and as a young person they have undergone a significant amount of change in that time. This recent conversation was insightful because it painted a picture for me of what they think day to day, how they view life and what they want out of it.

One question they brought up was why some people experience less suffering than and it cripples them more? Shouldn’t they feel lucky that the extent of their trauma was less?

It’s common for people to judge others and themselves for being deserving or qualification based on how hard their life is. This can happen in a wide variety of situations, some people feel more deserving of a raise because they have been working longer, or an opinion is more deserving because they suffered more oppression in a particular area, or others having more than them, or a a sense of entitlement because of effort given to a bad relationship.

How much you suffer only matters to you. There are no points awarded for how hard your life is, only for the results you develop.

There are always two different directions you can take, one that is worse than where you are, i.e. negative thoughts of past experience/jealousy of others and the other is better, i.e. gratitude for what you have or leaned and optimism for what can come.

This person has a past experience that is causing trauma that they are unable to reflect on without being consumed with depression. Depression can be like being in a pit, the farther you go down there the harder to get out of it becomes.

I look to see aspects in myself in others. So when others say they are struggling with certain issues of blocks in their life that they can’t get past because they are unable to forgive themselves or accept the past and let go in order to move on I offer my opinion in a way that also applies to me in the subjects I think I also have the same difficulties.

My portion of the conversation was in dealing with the day to day elements of despair is to let go of the thoughts that take you down a road of further negative thoughts and to look for a thought that brings them just one step better in feeling.

I also suggested that they establish a routine to regularly hold better feeling thoughts so that there is force to break the past condition. They said they are afraid to touch or change their feeling for fear that they will fall into an abyss of depression and not be able to get out. What they hope for is a life of being just ok.

It’s very interesting to have a conversation with someone that tells you my problem is X Y and Z but I can’t think about those issues or my life will fall into ruin. Obviously if a long standing substantial issue with a fundamental part of who we are problem was easily digestible it wouldn’t take long to work through. Additionally our personal preferences make it easy to negatively judge other peoples choices because they are not what we would do. There is to them a lot of value in spending the time to experience, and process difficult growth lessons.

They are doing what I wanted them to do. Their life is significantly better than it was three and four years ago. While I would consider their current state rather neutral on the spectrum the progress they made over the past three years up to now is huge. It’s easy for me to want others to make rapid progress but time is theirs to go on their journey and spend it on the things they choose and i’m happy for them.


Trading Bitcoin Manias

This post describes a trading strategy that I am using with digital currencies specifically Bitcoin. The system I use to trade is available online for free at To use it you would need to open an account on an exchange and that can take several weeks to complete.

My expectation of gains is high, 50% per year for the next two to five years. In my eyes this is an opportunity for gains if the market continues it’s volatility and or upward trend. Even as a small portion ones invetments this strategy could add a boost to financial independence.

These high expected returns make a big difference. As a comparison, I met with a financial advisor recently about managing my stock and bond investments. I currently hold self directed accounts and do rebalancing myself. The management fees of the financial advisor in the ballpark of 1.5% meant he would be making 65% of the income I wanted to withdrawal on for living expenses. That is a lot. If Bitcoin does go up by 50% per year it could be used to make gains not possible elsewhere at the same level of risk.

This strategy is based on the assumption that the price of Bitcoin will go up over the next few years. Trading the extreme peaks and valleys reduces the risk of buying at an all time high and also grow a cash reserve hedge. It’s pretty clear that Bitcoin has done well in the past but there have been times where people have bought in at a price that quickly dropped and then it took years to recover. This strategy hopes to reduce the likelihood of this happening by indicating times when not to buy when the market is overbought. This strategy also keeps a cash reserve as a hedge so that if the price was to drop unexpectedly you have some assets remaining to buy in or use for other purposes.

I personally believe that there are several reasons the price rise is likely but I won’t cover them all here. Some of the top reasons include the rapid activity of the developer community, improvements to the software and supporting infrastructure and businesses starting to work with digital currencies, the increasing user adoption rates and the gradually reducing production supply of the currency all play parts in my personal assessment.

The mania is a metric that measures rate of change both up and down over time. When the price rises at a rate that is higher than 99% of the past historical trading data then it is seen as a good indicator to sell a portion of holdings as the price and rate of rise always reverts in the other direction. The same applies to drops in price. When the price falls at a rate that is faster than 99% of the historical data it has always followed a reversal upwards and is a buying opportunity. When everyone is selling cheaply people panic but it has historically been the best time to buy.

The trends measured take into account a long term timeline. This means I look at trends based on the largest frequency of price cycling to reduce the risk of being caught out from an unexpected trend reversal. The long term objective is to accumulate bitcoin and trade when the indicators mark opportunities that only occur a few times per year at all. This makes it a low time commitment strategy.


Here is an example report showing the Bitcoin price (Blue) against the mania (Red and black). You can see that durring the past price spikes the mania levels went above 1.5 and this would have been a good time to sell and definatly not a good time to buy. Durring the downturns when the mania droped below 0.4 the price has over time gone up and this has been a good time to buy in my experience.

A lot of people tend to think that they need to trade daily or weekly on short term trends but this is more work and not something that I do. I originally started out down this road and there is a reason why I don’t do this any more. I wrote a stock and crypto trading bot that used a genetic algorithm to learn an optimal strategy for profitable trading. After letting it run for months and years the bot did make a lot of money but less than simply buying and holding Bitcoin or dollar cost average buys.

This is not financial advice. Any investments you make are at your own risk. The value of Bitcoin or any other digital currency could for unforeseen reasons go to zero. It is important that if you buy into these currencies you are aware and can accept this risk. Only buy an amount that you are comfortable loosing.


Money, Hate it and Love it.

I wanted to share some interesting observations about money. I think a lot of people make assumptions about it that don’t make much sense.

The title is a play on words from the saying love it or hate it but the strange thing about money in particular is that people do hate it and love it at the same time.

People want money but don’t want it at the same time. Everyone wants a lot of money but as soon as people get it they want to get rid of it. If you put a stack of cash under your mattress people would say that is totally irresponsible, someone could steal it or there could be a fire and destroy it. If you instead put that cash in the bank the tellar will tell you you need to invest it because it’s not doing anything for you just sitting there. I.e. you need to trade money for somthing else that isn’t money. Such as a share in a company, a bond as a promise to repay or a physical asset that might appreciate. Inflation destroys the value of money but no one says it like that.

Using money is like putting watter in a bucket with holes in the bottom that everyone thinks of as beeing super important. It’s commical and tragic as most of my friends are spending their entire lives working to make money just to live while not understanding what money is or how it works.

The thing most people don’t know is that dollars are created as dept by banks in the form of loans as they are needed. Most people think that dollars represent the labour they traded to earn them and are simultaniously frustarated at rising prices and living costs. The truth is that while most people work for money, some people / companies / banks just create it from nothing and charge interest. The really tricky part that most people don’t grasp is that because banks issue the currency with interest attached there is always more money owed than exists. It’s like a game of musical chairs. This is why economists are fearfull of deflation in the economy. As soon as the currency supply starts to contract people become fearful and stop spending on non essentials in order to pay down depts. Unfortunately there are more debts owed than there are dollars to pay them off so all available currency quickly dissapears and you end up with a depression.

This means that there is a hidden penalty for holding debts that compounds with greater levels most people don’t realize.

What to do about it? Save as much as possible. There is a sliding scale between your networth being negative and positive. The more negative or in debt you are the more of your life you have to spend paying other people. Conversely the higher you are on the net worth scale the more easily money can come to you. Be on the positive side of the debt equity threshold.

There are a lot of social conditioning beliefs that we have to spend our money and finance debts to the same level as our income. In my area the average house price is $830,000.00 and everyone strives to buy one and finance it with thrity years of mortgadge payments. That is $4000 per month. Half of the payments to a mordgage go to interest charges by the way.  If not house then a car, toys, or vacations etc.

Reducing your expenses has a greater effect on your financial future than increasing your income in some cases.

There are a group of people that save large portions of their income and share their experiences online. They are known as the Fire community and it stands for financial independence and early retirement. Some popular bloggers on the subject include (US) and (Canada). Check them out and leave me your comments.





Like Minded Persons Wanted

I am looking to find likeminded people that share the same interest and passion.

My focus this year is on personal growth. To me this means reading on new subjects, building things people want, and most importantly meeting new people and sharing life together.

Most of the people that I know are limited in what they can do because of the amount of free time they have. They don’t have the opportunity to spend extended amounts of time doing things that would make them happier or allow them to learn or transform beyond what a certain basic level allows. Most people have a certain number of hollidays or a limited amount of money to travel or go to conferences as an example. Even the people I know that are high net worth are also highly leveraged with liabilities that bring them into comperable levels of work commitment and the stresses that come along with that.

How much of your day is really yours?

I have long been aware of common sayings about money not brining happiness or once you get a bump in lifestyle you will just acclimate to it and then feel just the same as you did before. I don’t agree with this though. I think this only applies to us when we are not growing or moving forward as people. Growth isn’t about comfort though and is mostly doing less with targeted action and letting go of bad habbits.

Are big changes realistic?

What does it feel like to hold an extravigantly rediculus idea of your future that feels impossible to achieve but unreasonably commit 100% to it? Uncomfortable and isolating, but in a good way that makes you feel alive.

There is an interesting phenominon I believe that if you could offer random people a life that they want more than any other they will sabatoge it if it is too far outside their comfort zone.

The difficulty in intending to change your life drastically also comes with a greater reward than can be gained by the regular toils of daily labour. This is because that impossible idea in your head will eventually and quickly become real and part of regular living as long as you hold it with mental certanty and conviction.

I made some investment descissions over the last ten years that brought me to financial independence. While the decape prior was pay cheque to pay cheque, I spent most of the day working just to have an hour or two to myself in the evenings. Now I have all the time to do what I want and need. The nuts and bolts of the investments are built on a strategy that was the result of several algorythmic learning systems evolving over the years.

One interesting observation about stepping through financial goal boundaries is that the expectation of what it would be like has nothing to do with reality. I had a belief that once I reached a certain dollar amount of investments I could live off the interest and then I would feel free. However when that happened to me and I reached that dollar amount I didn’t feel free I said to myself when I have twice that number then I will feel free. Then if the stock market crashes I will be ok because I can also invest in these other assets. Somewhere around the time when my investments reached just about twice what I needed to live on I was fired from my job. I wanted to leave but really was stuck in a mindset of conservative fear. I’m still trying to break off pieces of my personality that are over conservative to the detrement of my well being.

What is it like to be financially independent? It’s amazing, It’s a new normal and at the same time it’s an environment perfectly suited to figuring out what is important to my life now so that I can go do that. However I don’t know many people that are also in this situation.

What am I doing…

1 Ongoing projects, some I will talk about later. One is a car company I am starting called This is a passion project and I love working on it.

2) Network of investors to share or discuss investment strategies that helped me become financially independent so that more can do the same. The investment strategy I use is available to anyone on the website

3) Youtube vlog I plan on starting to capture life, learning and fun with the intention of connecting with like minded others for growth and friendship.

Topics i’m brewing on for the blog and vlog inlude: health, fitness, travel, cars, money, investing, humor, food, relationships and more to come.

What is Possible?


I have been thinking recently about this idea that there is a threshold in our thinking between two extremes of possibility that bifurcates the course of our lives into two completely different directions. We all fall into different ranges but the end result is that everyone having thoughts more or less than fifty percent one way or the other will be grouped with everyone else of like mind. The fascinating thing is that it appears people in each group do not see what the other group see despite occupying the same world and even interacting with each other.

The distinction that separates us is based on this world view.

Side A: Life happens to us because it’s outside our control and

Side B: I’m learning how to navigate life because this is what I choose.

This was sparked by several recent conversations I had with people while they were telling me about problems they were having in their life. For each case I explored with them some actions they could take to get advice, explore and test options, re-evaluate the role of the cause of the issue in their life. I was just exploring some ideas not trying to lecture or preach but I noticed they would always reset the track at the beginning each time and restate the problem statement as they had begun it. I tried backing up the context to come to some common ground because I felt the point I was trying to explain was being overlooked but in those moments at least these strangers didn’t want to let go of the way there story was told.

Did their problems really matter? Absolutely they were real problems that would drive anyone crazy. Has anyone else had the same issue and resolved them? Yup but it seemed simply describing an option to them did not change their intention on what they planned to do.

If you are not looking for change or new possibilities you will not find them. This gives the people in each group the illusion that the world only exists the way they see it.

On the extreme end of side B people exhibit a force of will that is total with complete disregard for feedback from their experience of reality. Their goal is all consuming and they view it as the only thing deserving of their attention. When or if their goal doesn’t materialize they don’t even observe it. These people can appear crazy to everyone in the middle.

The opposite end of the spectrum side A are extreme pessimists. They don’t try stretch goals, settle with what they think they can have without ever contemplating change. They view people who take risks as foolish and others with excess as completely unrelated to their way of thinking.

Obviously this is a generalization and we as individuals fall into different levels of this spectrum for each area of our life. What I have noticed from past experience is that the crazy things that seem beyond impossible actually happen for real when you hold them in your mind as certain to such a degree that there is nothing else. And conversely it’s impossible to move from a mindset of lack being placed on us by others into prosperity. No matter how much effort you put into, the universe meets that force with an equal opposite pushback. Thats the interesting key to me, how do you take the things in your life you believe to be impossible that you want to have or explore and cross the threshold? It’s hard, when I start out on one or the other it trends toward the extreme in that direction. Crossing back requires a big commitment, the ability to let go to things that feel essential and a leap of faith. It’s almost as if the trends towards helplessness become a part of you so letting go of them really is like jumping off a cliff.



Game Night

Many years ago I worked at an internet geography company as a software developer. There was a woman there who said to me in conversation something to the effect that if you intend for things to happen to you, they will. This was about eleven years ago and while people do on occasion mention things like the law of attraction now in my recollection this was very rare back then. It would have been a few years after the book ‘the secret’ came out. The woman left her position later that week.

Several years later I had reached out to a friend of mine that I worked with at a job even previous to the geography company. I received an invitation to a game night hosted by an investment company and asked my friend if he wanted to go, and he joined me. The game was like monopoly with a board where players would roll dice to move positions with the goal of earning enough game money to retire and win the game. This was supposed to be a metaphor for win the game of life. The distinction in this game from monopoly was that all of the money earning activities were very specific deals and they required each player to keep a ledger to balance cash flow and expenses. Mid way though the game I apologized for bringing him to what felt to me like a math party. It was just hours of number crunching and weighing strategy for buying and selling assets and business as we each took turns moving our player pieces around the board. He seemed to accept it for what it was and didn’t show any sign of regret.

All in all it was a really meh evening from my point of view however at the end of the game the results surprised me. My friend who was suffering from pretty high student loans, a separation from his girlfriend and a drastic drop in the value of their condo they could not sell, coincidently suffered the worst luck in the game. Every turn he would get a bad roll or a bad deal and for the several hours we played he never had a chance to accumulate enough capital to really participate. It was a really crappy game for him, and I recall him saying, “story of my life” and laughed it off.

Then I noticed that same woman I used to work with at the geography company there at another table with her husband. She was so pleased by the results she told the hosts and said ‘I had a baby in the game and I’m having a baby in real life!’. She then showed off her belly to prove it. It was clear to me how everyone was seeing game results that reflected their lives. My game bothered me though. Unlike my friend I didn’t have bad luck, I did earn enough to play the game but I was too conservative and before I knew it the evening was over and I missed my chance to win it all. For me at the time this was also true in my real life. I was doing ok, working hard at work and side businesses but not winning it all.

This observation I had that night seems to be what the opposite side of law of attraction looks like. Where one side is pushing outwardly a desired idea or feeling and seeing it come back the other is simply observing all of the different parts of your experience as they reflect back to you what you have been thinking and to some degree who you are as a person.

Looking back now I am ok with the way I played the game of life. While I didn’t win it all in the short timeframe the game took place it certainly paid off in the end. I will write more about that another day.


Weight Lifting


A physical activity that I really enjoy is weight lifting at the gym. I have been going on average three to four days a week and have learned a few things about avoiding injury first through trial and error and then by seeking professional advice. I find that lifting weights regularly makes me feel better day to day and also helps me get to sleep at night as long as I go regularly. I think it is important to stress that this feeling better is personally the most important aspect of weight lifting and it definitely outweighs most other activities in my life that contribute to my happiness.

I noticed that my body will quickly adapt to different workloads, in the past I was going five days a week for about 1.5 hours and recovering in time for the next day. Right now going for about 45 minutes only three times a week gives me the same positive benefits but it does take me longer to recover after each session.


Early on probably 6-7 years ago when I started to push heavy weights I ran into nerve problems by failing to stretch and warm up with lighter weights first. The problem first appeared in my elbow where the Ulnar nerve was not sliding properly through a protective sleeve as it normally does. It was tugging and causing a great deal of pain. A physical therapist fixed the issue in thirty minutes but I have to get massage therapy every year in areas around my neck and arms for this reason. I have found that stretching and doing a set of weights at 50% of my max before full weight reduces these nerve problems.

Another common injury I experience is more unique and unlikely to affect many others but I will cover it anyway. I have very weak tendons and this does cause joint problems. Normally your tendons hold bones into a controlled track as they move but in my case it is easy for them to slide out so that the joints don’t track properly. This mostly applies to my knees, hips, elbows and shoulders. As an example your knee joint can rotate forward and back as well as rotationally allowing your foot to point left and right. But in my case just a little bit of force will cause my tibia to rotate to the side left and right. This means that I can not use a leg extension machine at all even with light weights. Because the machine isolates your knee so effectively slight imbalances in other leg muscles pull the joint to one side or the other and I end up with joint pain for several days. The solution is to do free weights and in the knee example this means squats and deadlifts.

It is probably useful for others in general to use free weights in addition to machines because it helps strengthen surrounding support muscles to give you more balanced strength. If you overuse machines it can be easy to rely on the hinge and push on one side or the other overdeveloping one side of the support muscles. When using the joint in daily activity it will tend to be pushed to one side and cause joint pain.

Muscle Growth.

I have found an efficient way of developing muscle mass is to do two or three sets of ten or fifteen repetitions at the maximum weight you can safely lift. This is only after warming up with a set at 50% of course. In some cases I will break up second sets into parts because I can’t physically to them in a continuous set.  I will test my maximum by adding weight in small increments, if I can’t push more than five repetitions I will back off on the weight. If I experience joint pain within twenty four hours of lifting I will also reduce the weight at the next session.

This makes effective gym sessions very quick. After cycling through three sets of each muscle group i’m about fourty five minutes in and I just leave.

My recovery time varies depending on how frequently I stress the muscle group. If I was going to compete in a sport that used certain muscle groups I would work the area daily or alternate days at 100% of my capability. I’m not too motivated to increase my absolute physical strength at this point in my life, I just use the maximum safe weight to make my sessions efficient for time. If I wanted to though I would do more research in that area and be very systematic with training strategy and diet.

Going forward my current goal is to increase the strength of my shoulders as they are a current weak spot. I’m using twice as many exercises that focus on the shoulders as I normally use on other muscle groups to achieve this.

Schedule, Price and Clothing

I find what works for me is to go to the gym after I finish work.  After I get home walk my dogs, eat then head out to lift weights.

The gym I go to only costs $20 per month and since there are so many around it makes it convenient from a location perspective. I used to lift free weights at home and I find the gym makes it easy to isolate muscle groups that would be a challenge without all of the machines and cable pulleys. The separate location also makes it mentally easier to push through a session.

I bring running shoes and plain shorts and t-shirt. I have tried exercise breathing clothing before but I usually don’t like the way they fit and they are more expensive anyway.


I used to compete on a cycling team and prefer the stationary bike over a treadmill. Hopping on a bike and riding outside is by far a better experience but it also requires maintaining a mike and changing with breathing cloths, shoes, helmet does take extra time. I will usually do ten minutes of cardio at the beginning of a session. I do walk about an hour a day in addition to the gym. This means that my level of cardio ability is very low but that is by choice right now.


It is a good idea to stretch daily and it helps with mobility, circulation and reducing risk of injury. It is the unexpected fall or collision that can cause injury if your body can’t move or have the strength to dampen the impact.

I have plans for new goals in the next year so I will post more as I get started and see how it goes.


Minimizing Your Risk When Investing In Bitcoin


When the price of Bitcoin hits all time highs, as it has been for the past few months, people often ask me how they can buy. But then they worry that the price is about to drop once they do buy for the first time.

This happened to several people I know during the 2013 spike where the price peaked $1100 USD then proceeded to drop below $300 over the following three years.


Now that the price is $4200 up from $1000 six months ago, how do you gauge the likelihood the price will drop? It is possible to do market research and make an assessment of what the price will do but ultimately there is no surety it will go up even if all signs point that way.

In order to protect yourself from price drops you can use a hedging buy strategy to accumulate Bitcoin over the long term in a way that reduces your losses when the price goes down.

Here is a buy strategy that will reduce the effect of declining prices after purchase. This will reduce the amount of time where you are holding a loss on your purchases and also reduce the amount of loss when the prices drop so that you have more equity in case you need it unexpectedly. 

On a regular interval, once per month, make a regular investment of a fixed amount of dollars into two parts, one use to buy Bitcoin on an exchange at the current market rate and the other half portion set aside a pool of cash. Each purchase make an entry in a spreadsheet to keep track of the date, purchase amount, cash pool contribution and then calculate your average purchase price from all of your purchases.

If the price rises continue adding equal portions to new BTC purchases and your cash pool. If however the price of Bitcoin falls below the average purchase price from your past buys then in addition to making your regular BTC purchase and cash pool contribution make an extra BTC purchase using your cash pool. The amount to purchase can be up to the same ratio of the total available cash pool as the drop in value of BTC relative to the amount you paid for it. For example if the price of Bitcoin drops to seventy five percent of what you paid for it use 25% of your cash pool to buy more BTC at the lower level.

This will have the effect of reducing your average purchase price because. When the market makes large drops for extended periods of time this gives you the opportunity to make use of the cash pool to purchase at a lower price. In the event that you need to pull out BTC or cash unexpectedly you will have both cash and BTC that you can sell at a price closer to the market.

It is important to make purchases on a regular schedule however and not make these cash pool purchases too frequently or you risk disrupting your allocation from small market corrections.

Also note that this strategy implies that you are speculating on future price actions. While this strategy does better than buying 100% Bitcoin of your monthly contribution if the price goes down, it will not return the same gains if the price continuously goes up. You are trading some upside potential for downside risk protection.

Feel free to adjust the recipe to your taste and let me know how you do with it. Other possibilities would be to invest the cash pool in another liquid asset that will return interest.

Why do this? It’s extra work but if you compare it to other investment options it may be a good fit if you want to claim a stake in the cryptocurrency market but are not comfortable with the psychological effects of a massive market downturn right after you buy in for the first time.

How does it perform? If you were to start investing at the market peak in December 2013 as an example and simply put $200 aside each month where $100 goes to purchasing Bitcoin and the other $100 into a cash reserve you would end up with the following month to month gains:

Bitcoin Market Value Bitcoin Gains Cash Reserve Amount Invested Invested Gains
$100.00 $0.00 $100.0 $200 $0.00
$163.55 $-46.89 $200.0 $400 $-36.44
$275.40 $-36.67 $300.0 $600 $-24.59
$300.97 $-124.79 $400.0 $800 $-99.02
$348.69 $-198.61 $500.0 $1000 $-151.30
$424.95 $-242.32 $600.0 $1200 $-175.05
$645.06 $-123.97 $700.0 $1400 $-54.93
$775.77 $-93.68 $800.0 $1600 $-24.22
$854.94 $-115.27 $900.0 $1800 $-45.05
$868.31 $-205.36 $1000.0 $2000 $-131.68
$776.22 $-414.75 $1100.0 $2200 $-323.77
$784.58 $-531.99 $1200.0 $2400 $-415.41
$963.04 $-467.16 $1300.0 $2600 $-336.95
$880.85 $-680.18 $1400.0 $2800 $-519.14
$761.81 $-966.09 $1500.0 $3000 $-738.18
$905.85 $-971.69 $1600.0 $3200 $-694.14
$971.69 $-1055.28 $1700.0 $3400 $-728.30
$995.69 $-1187.72 $1800.0 $3600 $-804.30
$1145.67 $-1180.93 $1900.0 $3800 $-754.32
$1301.41 $-1157.91 $2000.0 $4000 $-698.58
$1649.25 $-922.68 $2100.0 $4200 $-450.74
$1371.18 $-1339.30 $2200.0 $4400 $-828.81
$1518.44 $-1322.99 $2300.0 $4600 $-781.55
$1997.18 $-952.61 $2400.0 $4800 $-402.81
$2271.77 $-781.29 $2500.0 $5000 $-228.22
$3322.65 $168.12 $2600.0 $5200 $722.65
$2963.19 $-290.33 $2700.0 $5400 $263.19
$3424.88 $70.87 $2800.0 $5600 $624.88
$3541.65 $87.07 $2900.0 $5800 $641.65
$5569.32 $1983.19 $3000.0 $6000 $2569.32
$5521.94 $1809.35 $3100.0 $6200 $2421.94
$4940.52 $1115.27 $3200.0 $6400 $1740.52
$5307.50 $1366.10 $3300.0 $6600 $2007.50
$6095.08 $2026.52 $3400.0 $6800 $2695.08
$8553.84 $4310.38 $3500.0 $7000 $5053.84
$9344.36 $4914.58 $3600.0 $7200 $5744.36
$10111.96 $5485.55 $3700.0 $7400 $6411.96
$11112.97 $6274.96 $3800.0 $7600 $7312.97
$16094.53 $10938.43 $3900.0 $7800 $12194.53
$26040.85 $20343.25 $4000.0 $8000 $22040.85

After investing $8000.00 over four years your net assets would be worth $30,040.85. This is a 93% yearly return on total capital thanks in part to the uptrend at the end of the run in 2017.

Notice that when using the 50/50 cash/Bitcoin buys the Invested Gains is higher than the Bitcoin Gains when the market is negative. This is what you are gaining with the cash reserve.

The purpose of hedging each monthly investment in cash is to reduce the amount of losses each month where you are holding less in market value than you invested. However by doing this you are reducing some of the upside gains if the market goes up. If you had invested all of the $200 each month in Bitcoin your net assets would be worth: $52,081.70 a 162% yearly gain on total capital.

When using the cash reserve to buy during times when your market value is lower than your purchase price puts you somewhere in the middle of these options returning $43,510.60 using a small purchase amount. Although this reduces your ongoing cash reserve as you as using it to buy Bitcoin when the price is lower.

These different buying strategies illustrate to me how asymmetric the Bitcoin market has been. While you can reduce your monthly losses with a cash reserve by about 50% (up to $600 in some months) the overall cost in this particular time frame is $22,040.85 as this is how much more you would earn buy putting $200 per month into Bitcoin rather than $100. That is how much you are paying to hold more liquid assets thought the four years.

Disclaimer: This is not investment advice and is only my personal thoughts on possible options for purchasing Bitcoin. One of the challenges on choosing an investment strategy in Bitcoin is that because the market is so volatile even small changes in the timeframe of past data will give you a very different result. This makes it very easy to choose a strategy that works on past data but doesn’t necessarily take into account future trend possibilities. In other words, make sure you do your research and be certain you are comfortable with the results if the market goes down, up or flat.




This is a brief summary of my thoughts on cryptocurrencies specifically Bitcoin as an investment. Going forward I will add more about different aspects of the currency and surrounding products/markets as well as alternatives.
I am buying Bitcoin now at regular intervals because I believe that the price two years from now will be higher than it is now.  If the price four weeks from now is down ninety percent I will not be bothered. It dropped ninety percent between June and December 2011 and seventy five percent between November 2013 and August 2015. Aside from those notable drops it also saw fifty, forty and thirty percent declines many times. If you are going to buy Bitcoin be prepared for drops like these.
So why buy when the price plummets like Humpty Dumpty? Well in my opinion only because Bitcoin has always put himself back together again and in the process accumulated more users, new use cases and higher demand. Over the few years that Bitcoin has been available and trading the rate of returns is significantly higher than most if not all other options.
Why I think Bitcoin is going up:
1) It provides strong utility that will likely be useful in a wide variety of areas including: international settlement, peer to peer payments, trust-less money transfer contracts between remote parties, store of wealth, etc. Before Bitcoin there was no method of distributed transactions that did not require a third party that I am aware of. Given the current trend, more people will use and adopt Bitcoin in the future and with a fixed supply the value of units should be bid higher. I will expand on use cases and potential opportunities in the future.
2) User adoption numbers are going up. Google trends results for people searching for ‘Bitcoin’ is increasing 400% per year, ‘what is bitcoin’ 150% and ‘buy bitcoin’ also at 150%. Each year more exchanges open with better infrastructure funding options and trading services. Stores and payment processors are also opening slowly allowing people to buy and earn Bitcoin from their work.
The experience of most new users is good, while some leave and some stay,  the ones that stay are usually hooked. Some or a lot of people obviously bought at the peak times and then watch the price plummet and want to get out. Based on number of users active and signing up for exchanges, wallets web and forums, the user base is growing year over year.
3) Legality. In the early years of Bitcoin there was a lot of uncertainty that it was legal. The closest thing to Bitcoin, E gold and others were shutdown for violating money transmission laws in the US. Because Bitcoin doesn’t fit any traditional definition of money creation and transmission it was uncertain that it would be legal to use, own, trade, earn or buy using Bitcoin. Since then many countries have issued statements and guidance as to how they will allow and regulate the markets adding some level of certainty to investors and users.
Bitcoin is illegal in some countries however so you should check with your local authorities to ensure you are compliant with the law.
Criticisms of Bitcoin:

1) Deflation is Bad.

The issuance of Bitcoin is set at a fixed rate that is cut in half every four years until 2140 when it will stop and the only source of the currency will be that of existing owners. In the next ten years the rate of inflation will drop from 4.2% to 0.8%.

The concern is that during increased demand for currency, its availability will shrink because of a perceived higher future value. People will hold off purchases because they expect to get more bang for their buck by waiting. This will cause economic velocity to go down and prevent new lending and future growth.

This is what happens to dollar based economies. The comparison doesn’t hold though because a dollar economy is based on fractional reserve lending that has a different dynamic applied to the supply that is not applicable to Bitcoin. All dollars are created by banks as debt with interest attached but the interest that needs to be paid was never created. There is an ever expanding amount of debt attached to all actors in the dollar system. In the event of deflationary changes in the dollar economy all available liquid cash would not be enough to even pay the interest on debts let alone living expenses like food, rent, clothing. This causes all available supply of currency to quickly go to zero. Banks cant lend because they don’t have enough reserves and individuals can’t lend because they have to pay everything they have to cover existing interest payments.
This wouldn’t happen in a Bitcoin based economy to nearly the same degree. Granted during an uptrend most people would presume a higher future value of the currency but the supply would likely only contract in a linear fashion. People will still buy things, just at an adjusted value, probably.
2) It’s Too Volatile.
Bitcoin is volatile so be careful. If you are not comfortable losing your investment in Bitcoin do not buy any. If you can set aside some funds to buy without any exception on timeline for withdrawal, Bitcoins historical high rate of return and potential future expansion could outweigh the risks provided you can commit to a plan. The plan should help you avoid the case where you feel tempted to panic sell after a price drop.
Volatility in the several markets are a really good aspect to Bitcoin in my opinion. It means that users have the ability to buy and sell at prices they choose any time they decide.
There are strategies for mitigating market volatility like dollar cost average purchases and sales over time so that highs balance out lows.
3) Criminals and Drugs.
A lot of people only associate Bitcoin with drug dealers on the dark web committing crimes. They don’t want any part of something associated with criminals.
The bottom line is that a currency for everyone has to work for everyone or it wouldn’t be valuable. Regardless of how you feel about it, you can’t control what others do. I believe Bitcoin is helping people and will continue to do so in new ways. Obviously using it is a form of support and you are entitled to choose not to use it if you feel that is the right choice for you.
4) Not a Real Currency and People are just Speculating.
Some say buying Bitcoin is not an investment it is gambling because you are betting that the price will go up just because it has gone up in the past. You shouldn’t assume that past performance is an indicator of future returns. Sure but the distinction between investment and gambling is a grey area of one slippery sliding slope. Based on someones opinion all investments have some level of risk of collapse and assumption of growth based on past performance. Most people just don’t think about the risks because they may happen infrequently. Most people recommend buying stocks and government bonds because stocks are often evaluated based on past performance and bonds are still subject to default or devaluation risks.
The fact is people are using Bitcoin as a currency. People are right now earning income in Bitcoin, buying everyday things with it and trading it with others.
Some people say that Bitcoin has no intrinsic value. My thought is that nothing has intrinsic value. Everything is relative and depends on relationships with everything else. The network that connects Bitcoin users really is the essence of its value.
Detrimental factors affecting the price:
1) Inflation Rate
New currency is issued with each new block on ten minute intervals. This new currency is issued to miners and results in an increase to the total supply of Bitcoin. When the new currency is sold on exchanges it creates additional downward pressure on the price. Every four years the number of Bitcoin issued for each block creation is cut in half, reducing this downward pressure.
Back in 2013 at the peak around $1000 there were 25 BTC issued every ten minutes. The price dropped after that peak but for comparison the value of currency created each day was $3,600,000. When I started this article in July  the daily created value was $4,860,000 and by the time I finished it the price had risen resulting in a daily value of $6,120,000.
While this value is high the currency is traded world wide so dividing this dollar amount by the increased number of participating traders makes this a more optimistic metric.
The most interesting observation about the amount of this newly created currency will be to compare it to the inflow of currency which I am sourcing now.
2) Technical Risks.
Bitcoin could fail catastrophically for unforeseen technical reasons. Or something new could come out tomorrow that makes it irrelevant. My estimation of this actually happening is very low because the mechanics of the currency are used in a lot of diverse and time tested systems.
3) Crime and Safety
Holding cryptocurrency involves a certain level of risk as criminals could steal your holdings using malware. It is important to understand the risks and proper use of cryptocurrency to ensure you keep it safe.
4) Regulatory Legal Risk.
While this is a much lower concern now than it was years ago, in the future government agencies may place restrictions on your ability to buy, hold and sell cryptocurrencies. As adoption grows and government agencies from around the world make their position known it is becoming clear that road blocks of this type are minimal.
My Strategy
My strategy in the past has been to buy when the price is historically low and going up then sell when the price is historically high and going down. This allows me to accumulate during periods of undervaluation and take some profit during periods of overvaluation.
Currently I am buying small amounts every pay cheque to accumulate an amount over a fixed period because I believe there with be growth over the next year.
I have built and use a web service that tracks top cryptocurrencies and reports on different metrics. I also have a trading bot that I can test against historical data. Despite my best efforts so far the best strategy is still to buy and hold when you have capital and to buy regular amounts over time if you have income.
As a final thought. Personally I find crypto currencies very interesting but if you want to invest there is a lot you need to know to use it properly and even with precautions it is very risky. This is not financial advice and I do not recommend that you invest with money you are not willing to lose.