Could the important returns provided by Bitcoin dwarf those obtained in business?
We have just broken our historical record, after three years of patience, and of course, today everything looks rosy. We are talking about percentages, returns and profits. Everyone is very happy. And it’s logical. The investment is paying off. That is, everyone is in a positive mood, regardless of the purchase price. Fortunately, not all of us are buying in December 2017. Most bought at much lower prices and today we are enjoying increases of 2X, 3X or more. However, many entrepreneurs are still skeptical. Is investing in Bitcoin better than a good deal?
I should warn you in advance that the thoughts expressed here are more personal opinions than an in-depth analysis based on pure data. They are personal and subjective reflections. The reader must decide how useful what is said here can be. Because mine are constructed from anecdotes coming mainly from a very limited context. That is, from my day-to-day life. The fact that I lead a double life suddenly gives me the benefit of seeing the contrasts of the two visions. When I say that I lead a double life, I don’t mean that I go out at night to fight crime with a mask. I mean that I invest in Bitcoin and write a lot about it, but also that I have my business. So, I’m a bitcoiner and an entrepreneur.
Reasons to get on the bus: Why buy Bitcoin?
This is quite relevant, because the point is that we’re talking about two very different circles. The average bitcoiner is very different from the traditional (Latin American) entrepreneur. I’m talking about demographics, way of thinking, and the general view of things. For example, among bitcoiners, I could be labeled conservative, old, and somewhat prosecutory. But, among business people, I could be labeled young, avant-garde, and out of the ordinary. „The one who knows about Bitcoin. (I live in Venezuela).
Many bitcoiners seem to be halfway pissed off at the world. And they easily fall for the rhetoric of conspiracies. That is, the evil system. They don’t have much experience, but they are always „right“. And they are very given to controversy. That is, they are easily upset during a debate. They love to fight on Twitter with strangers and things like that. And, above all, Bitcoin is the best thing in the world. The messiah who will bring us out of the abyss.
The entrepreneur usually has years in his trade. He knows a lot of people in his field. He has partners, contacts, and acquaintances. Maybe he knows people in the government. And he has a nose for business. The Latin American businessman generally trusts the dollar and the U.S. Government. He invests in houses, cars, and his business. He has accounts abroad. And he invests in Miami, Panama, or somewhere like that. Real estate, generally. But, above all, he is a social rather than a technical being. Which means he’s basically a gregarious animal. He’s not on Twitter. He doesn’t argue on the networks. Meetings are not virtual. They are face-to-face. The dinner, the bar, the lunch. The mountain bike trip. You sell things, you buy things, you make loans, and you make deals.
One of the big differences between doing business in Latin America and doing business in the United States or Europe is the issue of margins. In Latin America, a margin of 30%, 50%, 100% or more on a business is not particularly rare. In my industry (vehicles), margins are quite high. Not as high as margins in the food business. But they’re certainly much higher than what we’ve seen in the United States. In Venezuela, for example, you can be a dealer and do business. But, in the United States, the competition is simply brutal. The pressure from the big guys is devastating for the little guys. This obviously reduces profit margins.