The goal of this guide is to help you upgrade to a full Bitcoin standard. This means converting everything you still use as your primary money into Bitcoin. This can include anything from regular bank savings accounts, cash, money market funds, stock or bond index funds, precious metals, real estate, pension funds, and/or retirement accounts.
It also involves converting all of your income into Bitcoin and becoming accustomed to regularly spending it. You keep only small amounts of fiat on hand, just enough to complete near-term payments where Bitcoin isn’t accepted directly.
If you have access to a Bitcoin exchange, you can adopt a full Bitcoin standard today. However, because Bitcoin’s purchasing power can be highly volatile, it’s recommended that you first apply the practices explained in this guide to prepare yourself.
This guide is divided into two sections:
This section explains:
- How to take full control of your money by using a zero-based budget.
- Why and how to eliminate all wasteful spending by becoming and staying 100% debt-free.
- How to steadily increase your ability to generate more income by setting aside 10-20% of your budget for giving.
This section provides a framework for balancing your net worth on a full Bitcoin standard. It breaks your net worth into three components:
- Money – The portion of your wealth held primarily in Bitcoin, with a minimal amount in fiat currency.
- Consumption – Goods or assets used for personal enjoyment, daily living, hobbies, and similar purposes. In other words, everything you use during your leisure time.
- Capital – Goods, assets, or investments that generate income or are expected to provide a higher risk-adjusted return than Bitcoin's compounded annual growth rate in purchasing power. In other words, everything you use during your labor.
It also introduces the "rule of thirds," which suggests keeping:
- At least one-third of your net worth in Money.
- No more than one-third of your net worth in Consumption.
- No more than one-third of your net worth in Capital.
To adopt a full Bitcoin standard, follow the steps in this guide one at a time. Start by implementing zero-based budgeting to take control of your finances. Then, eliminate all debt from your balance sheet. After that, adopt the practice of setting aside 10-20% of your budget for giving.
Once these steps are complete, review the composition of your net worth and adjust it according to the rule of thirds. This may involve liquidating parts of your net worth and converting that value into Bitcoin to achieve balance. Afterward, continue following the practices in this guide to maintain balance and grow your wealth over time.
The more you practice these steps, the better you will become at managing your finances on a full Bitcoin standard. This guide is not just about adopting Bitcoin—it’s about transforming how you manage your money, achieving financial independence, and preparing for a future where Bitcoin plays a central role in the global economy.
Let’s begin.
This guide is written for Bitcoiners who are transitioning from a fiat standard to a full Bitcoin standard and are facing challenges and decisions along the way.
Are you afraid to sell Bitcoin? Does Bitcoin’s high volatility bother you? Do you have debt? Is your spouse not fully on board with your Bitcoin plans? Are you wondering how to make more money in general?
If you already own Bitcoin and recognize yourself in any of the following statements, this guide is for you:
- You’ve read The Bitcoin Standard, The Fiat Standard, and Principles of Economics.
- You’ve read Inventing Bitcoin and have a basic technical understanding of how the Bitcoin system works.
- You practice dollar-cost averaging into Bitcoin.
- You keep some fiat currency as "dry powder" to buy more Bitcoin during price corrections.
- You’ve tried growing your Bitcoin stack through trading but decided you’d rather buy and hold.
- You have and use credit cards.
- You have and use personal loans.
- You (sometimes) use lines of credit.
- Your checking account occasionally goes into overdraft.
- You have a mortgage.
- You have an auto loan or lease.
- You have student loan debt.
- You’ve used or plan to use a home equity line of credit.
- You’re hesitant to spend your Bitcoin.
- You’re (sort of) afraid to sell your Bitcoin in any significant amount.
- You believe there’s such a thing as good debt and bad debt.
- If the opportunity came up, you’d probably take out a zero-interest loan to buy more Bitcoin.
- You have a rough idea of how much money you make and spend, but you don’t know the exact numbers.
- You’re planning for retirement.
- You’ve tried orange-pilling your family and friends, but they didn’t take your advice as seriously as you’d hoped.
- You’re willing to allocate more of your money to Bitcoin, but your partner or spouse isn’t fully on board.
- You have a fiat job and don’t have direct Bitcoin income streams.
- Because of Bitcoin’s high volatility, you don’t advise others to go all in.
- Sometimes, you feel like you don’t own enough Bitcoin.
- "Fiat is for spending, Bitcoin is for saving" sounds reasonable to you.
If any of this resonates with you, this guide is here to help. It’s designed to address these challenges and guide you step by step toward adopting a full Bitcoin standard with confidence and clarity.
Bitcoin is a very different kind of money from what we’re used to. Since its creation in 2009, Bitcoin’s purchasing power has increased millions of times, while fiat has steadily lost. However, this growth has been extremely volatile, with multiple price crashes of over 80% followed by massive rallies. While Bitcoin’s price volatility is decreasing over time, using it as your primary money still presents significant challenges.
You’ve probably heard of the famous Bitcoin pizza transaction. In May 2010, Laszlo Hanyecz paid 10,000 BTC for two pizzas worth about $30. At the time of writing this (November 2024), 1 Bitcoin is worth about $90,000, meaning those 10,000 BTC—now worth $900 million—could buy over 60 million pizzas.
This incredible increase in purchasing power has come with equally dramatic volatility. For example, since my "get off zero" moment in July 2014, when Bitcoin was around $600, its price has increased over 100 times in just over 10 years. But along the way, I’ve witnessed Bitcoin’s price crash by 80% or more multiple times, only to recover and reach new highs.
For instance:
- In December 2017, Bitcoin peaked at $20,000, only to drop to $3,300 by November 2018 (an 85% drop).
- In March 2020, during the COVID crash, Bitcoin briefly fell to $4,000 before recovering.
- By November 2021, Bitcoin reached nearly $70,000, only to drop to $15,000 by late 2022 (an 80% drop).
- As of November 2024, Bitcoin is trading at around $90,000, more than 1100% increase over the past five years.
This kind of volatility can be intimidating, and there are many strategies people use to deal with it. Some take a conservative approach, buying Bitcoin only with money they won’t need for years and dollar-cost averaging small amounts over time. Others try to trade the volatility, buying low and selling high.
But there’s a third approach that I’ve found most effective: using Bitcoin as your primary money.
This means converting all of your current and incoming money into Bitcoin and arranging to be paid in Bitcoin (if possible). You do this regardless of the current exchange rate. When it’s time to pay for expenses—usually denominated in fiat—you exchange Bitcoin back into fiat to complete the payment (or pay directly with Bitcoin if accepted).
Today, services like Bitcoin debit cards make this easier by converting Bitcoin to fiat at the time of purchase. If you don’t have access to such services, you can still use Bitcoin as your primary money by planning ahead. For example, if you need to pay rent in fiat next week, you can convert the required amount of Bitcoin to fiat a few days in advance.
To do this effectively and safely, you need to consistently practice three key money management principles:
- Zero-based budgeting – Plan every dollar of your income and expenses.
- Living debt-free – Eliminate all debt from your life.
- Setting aside 10-20% of your budget for giving – This timeless principle not only fosters generosity but also increases your capacity to earn.
These principles are critical when using Bitcoin as your primary money. Bitcoin is a powerful but still misunderstood technology, and without proper financial habits, its volatility can have both positive and negative effects on your financial life.
In 2024, Bitcoin is comparable to electricity in its early years. When electricity was first introduced, most people were afraid of it because they didn’t know how to use it safely. Over time, people learned how to handle electricity properly, leading to its widespread adoption.
Similarly, most people today have heard of Bitcoin, but only a small percentage own it, and even fewer use it as their primary money. Just as we’ve developed safety mechanisms for electricity, like circuit breakers and insulation, you can develop financial safety mechanisms to handle Bitcoin’s volatility.
When you implement the money management principles outlined in this guide, you’ll be able to use Bitcoin to its full potential. Instead of fearing its volatility, you’ll embrace it. Instead of trying to predict Bitcoin’s future price, you’ll learn to respond to changes in its purchasing power by rebalancing your budget.
You’ll also shift from the fiat mindset of "consume now, pay later" to the Bitcoin standard of "pay now, consume later." By eliminating debt and practicing generosity, you’ll not only improve your financial health but also increase your ability to earn and grow your wealth.
This guide is divided into two sections:
- Money Management Principles
- Learn how to plan your money, live debt-free, and set aside a portion of your budget for giving. These principles are timeless and have been relevant for thousands of years, long before Bitcoin or electricity existed. They will remain relevant for thousands of years to come.
- Using Bitcoin as Your Primary Money
- Once you’ve implemented the money management principles, this section will show you how to use Bitcoin as your primary money.
- You’ll learn to think of Bitcoin as your cash balance, budgeting and reconciling it in terms of its purchasing power.
- You’ll also learn how to balance your net worth using the "rule of thirds":
- Keep at least one-third of your net worth in Bitcoin.
- Limit consumption goods (assets used for leisure) to no more than one-third of your net worth.
- Limit capital goods (assets used for income generation) to no more than one-third of your net worth.
This guide will also teach you how to calculate the cost of ownership for assets over time, helping you decide whether to buy or rent.
If these concepts are new to you, there’s a lot to learn. But by following the steps in this guide, you’ll be able to use Bitcoin as your primary money safely and effectively, while building a strong financial foundation.
This guide is a work in progress, and I welcome your feedback. If you have suggestions or questions, feel free to email me at [email protected]. For personalized advice, you can schedule a call using the provided link. If you’d like to support this work, you can use the included Lightning address or donation link.
I hope you find this guide helpful and encourage you to put its suggestions into practice. Let’s build a future on the Bitcoin standard together.
Before diving deeper into using Bitcoin as your primary money, it’s important to understand what money is and why we use it. In this guide, I’ll use the Austrian School of Economics’ definition of money: a widely accepted medium of exchange. However, for practical purposes, I’ll add a slight adjustment: money is any economic good that you use not because you intend to consume it or produce something else with it, but because you expect to exchange it for something else at a later time.
Using this definition, we can see that people use a variety of things as money. But why do we need a medium of exchange in the first place? Why not just trade goods directly?
People trade goods and services because they value them differently. For example, person A has oranges, and person B has apples. A wants apples, and B wants oranges. They trade, and both are better off because they now have something they value more than what they gave up.
However, this kind of direct exchange quickly runs into a problem called the double coincidence of wants. What if person A wants apples, but person B doesn’t want oranges? Without a medium of exchange, the trade can’t happen.
A medium of exchange solves this problem. For example, if person A trades their oranges for bananas with person C, and then trades the bananas for apples with person B, the bananas acted as a medium of exchange. A didn’t want the bananas for their own sake but used them to get what they really wanted—apples.
While anything can serve as a medium of exchange, some goods are better at it than others. The effectiveness of a medium of exchange is determined by its salability—how easily it can be exchanged for what you actually want. Salability can be measured across four dimensions:
- Salability over time – How well the value of the medium holds over time. Fiat money, for example, loses purchasing power due to inflation, which is why people often use other assets like real estate, stocks, or precious metals to store value. Bitcoin, with its fixed supply of 21 million units, has superior salability over time because it cannot be inflated.
- Salability across space – How easily the medium can be transferred across distances. Fiat money can be moved electronically, but this process can be slow, expensive, and subject to censorship or reversal. Other forms of money, like gold, are even more expensive and cumbersome to move across space. Bitcoin, on the other hand, can be sent anywhere in the world quickly, securely, and without permission, making it highly salable across space.
- Salability across scales – How well the medium works for both small and large transactions. Bitcoin excels here because it can be divided into tiny fractions (satoshis) for small payments or used for large transactions without losing efficiency. Real estate, when used as money, can't easily be divided up for small payments; it can only be liquidated all at once.
- Salability across goods – How widely the medium is accepted in exchange for other goods and services. Fiat money is currently the most widely accepted form of payment, but Bitcoin is rapidly gaining traction as more businesses and individuals adopt it.
Humans are unique in their use of money. While animals may trade resources in limited ways, they don’t use money, specialize in specific tasks, or save for the future. These behaviors are tied to the spiritual or non-physical aspects of human nature—our ability to assign value, plan, and cooperate.
Money, at its core, is a spiritual phenomenon. The physical objects we use as money are, in a way, "carriers" of this spiritual phenomenon. The value itself comes from us performing valuations on the margin, and since every one of us is different, we value things differently at different times and places.
For example, a gold bar lying on the ground is meaningless to a seagull, but to a fisherman, it represents the ability to trade for food, tools, or other goods in the future. The gold bar’s value is recognized by humans because they know they can exchange it for something they value more in the future.
While anything can be used as money, Bitcoin is uniquely suited to be the most effective form of money in today’s world. Its superior salability over time, space, and scale makes it an ideal medium of exchange and store of value.
This guide is designed to help you transition to using Bitcoin as your primary money. This doesn’t mean you’ll never use other forms of money again—most of the world still operates on fiat currency. However, it does mean that you’ll treat Bitcoin as your main cash balance, converting fiat to Bitcoin and back as needed.
If you follow the recommendations in this guide, you’ll stop thinking of Bitcoin as a long-term, illiquid investment that you “don’t touch.” Instead, you’ll learn to use it as your primary money, managing it actively and confidently.
This approach eliminates the need to “hedge Bitcoin’s volatility” or treat it as something separate from your daily financial life. Instead, you’ll embrace Bitcoin’s unique properties and use it to its full potential.
To use Bitcoin effectively as your primary money, you’ll need to cultivate strong financial habits. Think of this guide as a blueprint for building a “spiritual money tree” with three key components:
- Roots: Zero-Based Budgeting
- This practice gives you full control over your money by planning every dollar and managing it over time.
- Trunk and Branches: Living Debt-Free
- Eliminating debt stops wasteful spending and fosters financial clarity, peace, and freedom.
- Leaves and Fruits: Establishing a Giving Practice
- Setting aside 10-20% of your budget for giving nurtures generosity and opens up new opportunities to grow your income.
Many people use things like real estate, stocks, or precious metals as money without realizing it. For example, someone who buys real estate not to live in or rent out but to “store value” is using real estate as money.
The goal of this guide is to help you transition to using Bitcoin as your primary money. This doesn’t mean you’ll stop using fiat currency entirely—most of your daily spending will still require fiat. However, you’ll convert your income into Bitcoin and treat it as your main financial tool.
By following the principles in this guide, you’ll stop worrying about Bitcoin’s volatility and start using it confidently as your primary cash balance. You’ll learn to manage your finances in a way that aligns with the Bitcoin standard, embracing its unique advantages while building a strong financial foundation.
Let’s continue this journey together.
I first heard about Bitcoin in 2012, but I didn’t find it interesting at the time. I thought it was just some kind of digital currency, similar to the virtual money used in computer games like World of Warcraft. In 2013, I came across news about the FBI shutting down Silk Road, a marketplace where Bitcoin was used for buying and selling. The U.S. government’s involvement caught my attention—it showed me that Bitcoin wasn’t just some game currency or code that could be easily changed by its creators. It was being used in real commerce, even if it was illegal.
I tried to get some Bitcoin in 2013, but there wasn’t a convenient way to do so. The only option I found was wiring money from Croatia to Japan’s Mt. Gox exchange, but that seemed too complicated, so I gave up on the idea.
In the summer of 2014, I was taking a break from my entrepreneurial pursuits after experiencing burnout. I wasn’t paying much attention to anything serious, but I decided to look deeper into Bitcoin. By then, there were more resources available, including videos explaining how it worked. I downloaded Bitcoin Core, set it up, and was ready to send and receive my first Bitcoin transaction.
What struck me was that the Bitcoin network was still operational, even after the shutdown of Silk Road and the collapse of Mt. Gox. This resilience intrigued me, so I decided to experiment. Luckily, a small Bitcoin exchange had just started in Croatia, where I live, and I was able to buy about $20 worth of Bitcoin in July 2014. The exchange rate was around $600 per Bitcoin at the time.
After receiving my first Bitcoin transaction, I spent some time researching on the Bitcointalk.org forums. But as summer ended, my focus shifted back to my entrepreneurial ventures. Bitcoin’s price wasn’t moving much, and since I had only invested a small amount, I eventually forgot about it. By the winter of 2014, my attention was fully on work and running a startup.
It wasn’t until late 2017 that Bitcoin caught my attention again. I realized it was trading above $15,000 per Bitcoin, and I remembered buying it for around $600. This was the moment that pulled me down the rabbit hole.
Fortunately, I didn’t spend much time exploring altcoins. By 2018, I entered my first real Bitcoin bear market. It was during this time that I read The Bitcoin Standard by Saifedean Ammous, which helped me understand the basics of monetary economics, the difference between hard and easy money, stock-to-flow, salability, and the problems money solves. This book changed my perspective—I stopped analyzing altcoins based on their marketing narratives and started viewing them through the lens of Austrian economics.
During the 2018 bear market, I also parted ways with the startup I co-founded, which meant my regular income stopped. With my savings depleting and income becoming irregular, I realized I needed to learn how to manage my budget. That’s when I discovered Dave Ramsey’s teachings on living debt-free. Listening to countless stories of how debt ruined people’s lives convinced me that my previous stance on debt was wrong, both personally and professionally. I started budgeting my money and, by the end of 2018, I had cleared all my debt.
At the same time, I sold all the altcoins I had experimented with and decided to focus solely on Bitcoin. In 2019, I did freelance work while studying Bitcoin and gave my first Bitcoin presentations at my former university. I also conducted workshops in the small town of Rab, where I now live. Public interest was minimal, but I slowly connected with a few Bitcoiners in Croatia. Most of my time was spent listening to Bitcoin podcasts, reading Bitcoin Twitter, and trying to find people to discuss Bitcoin with.
In the summer of 2020, I got my first opportunity to work in the Bitcoin industry. I connected with Saifedean Ammous, the author of The Bitcoin Standard, and helped him fix some issues on his website. This led to a larger collaboration, where I worked on his online courses, seminars, podcasts, and books.
This was also the first time I earned Bitcoin directly. By late 2020, as Bitcoin broke its all-time high, I ran out of fiat money. Both my income and savings were in Bitcoin. I had some fiat inflows, but I spent that first, and eventually, I had no choice but to learn how to live on a full Bitcoin standard. My Bitcoin income and savings grew faster than my expenses, so I started treating Bitcoin as my cash balance, spending it just as I would spend fiat.
By this point, I was already consistent in budgeting, completely debt-free, and had established a giving practice. Switching my cash balance from fiat to Bitcoin was straightforward—I just had to practice regular “purchasing power reconciliation” in my budget. Once I started doing that, everything went smoothly.
During the bull run in early 2021, I hit my savings goals faster than expected due to Bitcoin’s rapid appreciation. This allowed me to make significant expenditures, like acquiring a new office space, upgrading my tech, replacing consumer electronics, and buying a new scooter. I also took several vacations, all paid for with Bitcoin.
Later in 2021, as state COVID lockdowns intensified, I expanded my giving budget to help people whose livelihoods were threatened. This was when I fully realized Bitcoin’s potential as censorship-resistant money. I helped locals protesting state oppression begin their Bitcoin journey and continue their resistance. If I hadn’t been all-in on Bitcoin, I would have felt much more vulnerable, like those in Canada who lost access to their money for protesting the COVID regime.
I also connected with Bitcoiners from Germany and Austria who were seeking to escape their oppressive governments. I helped some of them relocate to my area, which led to organizing a Bitcoiner gathering in Rab in the spring of 2022. This gathering inspired the creation of “Dvadesetjedan,” an open Bitcoin-only group for the Balkans region, modeled after the German “Einundzwanzig” network. Through our weekly podcast in my native language, I was able to teach, learn, and connect with other Bitcoiners in the region.
In 2022, my expenses were lower because I had already made most of my major purchases in 2021. This was fortunate, as Bitcoin entered a bear market. I naturally responded by cutting expenses further and increasing my income, which allowed me to accumulate more Bitcoin.
During this time, I noticed many Bitcoiners slowing down their Bitcoin purchases or becoming bearish. In the summer of 2022, when Bitcoin’s price dropped below its 200-week moving average and stayed there for over six months, many were trying to time the market, expecting the price to drop further. While others hesitated, I was accumulating Bitcoin at the highest rate of my life.
I shared my experiences of living on a full Bitcoin standard on our weekly Dvadesetjedan podcast and began writing notes that eventually became this guide. After experiencing both a bull and bear market on a full Bitcoin standard, I now know this is the best way to handle Bitcoin’s volatility. In bull markets, I naturally spent more, which reduced my expenses during bear markets. In bear markets, I cut spending and increased earnings, leading to greater accumulation. Without trying to predict Bitcoin’s price, I still outperformed the best traders I knew by simply adjusting my budget and spending as needed.
Learning to live on a full Bitcoin standard is like learning to ride a bike—you only have to learn it once, and you’ll never forget. I wrote this guide to help you, a regular Bitcoiner still living with one foot in the fiat world, fully upgrade to a Bitcoin standard. This is the path we will all eventually take. You have the opportunity to start now.