On Episode 265 of the MeatEater Podcast, the crew began by addressing the value of Bitcoin and whether Chester “The Investor” Floyd would eventually reach Nirvana by purchasing a pristine walleye boat with the cryptocurrency he’s acquired. On the other hand, Steve had received strict orders from his wife that he wasn’t allowed to buy Bitcoin because “the ship had sailed.”
Time will be the ultimate referee in this saga, but is Bitcoin something the rest of us hunter-angler types should consider? Being a journalist that uses a bag of duck decoys as an ottoman, you can categorically ignore my financial advice—but here’s what the money-savvy have to say and how it connects to the outdoors industry.
What is Bitcoin? President Nixon took the U.S. Dollar off the gold standard in 1971, and since then our money has been backed by faith, officially making the dollar what’s called a “fiat currency.” The U.S. isn’t the only government to embrace fiat currencies; many have tried and all have suffered from inflation. Since Nixon’s decision, every president and political party has opted to print money, furthering lowering the value of our currency.
In response to this and a multitude of other global economic factors, an individual or group under the pseudonym Satoshi Nakamoto created Bitcoin: a decentralized monetary system, which means that no government or individual controls it. Opposed to the U.S. Dollar that is printed without restraint, no more than 21 million coins can ever be created as defined by the computer protocol. Bitcoin isn’t physical like gold, but a computer code that represents ownership of a coin on an online ledger known as the blockchain. The coins in private ownership are unconfiscatable, impossible to duplicate, and borderless.
By creating an online wallet, known as a hardware wallet, users can purchase both goods and services with Bitcoin. The transaction occurs when one user agrees to send a specified amount on a uniquely generated computer code that acts like a bank routing number. The alternative option is to sell your bitcoin on exchanges for fiat currency, at which point the Bitcoin is converted to dollars and is transferable into a bank account from which you can withdraw cash.
Corporations like Tesla and PayPal are now accepting alternative currencies with Elon Musk recently tweeting, “You can now buy a Tesla with Bitcoin.” However, those who use Bitcoin to purchase a walleye boat are on the hook for a hefty capital gains tax. This is because the U.S. government considers Bitcoin on par with stocks or similar assets, therefore citizens pay up to a 37% tax depending on how long it was held and a multitude of other factors best left for an accountant to decipher.
Podcaster and journalist Max Keiser believes the price will continue to climb. While some people plan to sell their Bitcoin on online exchanges for fiat, he plans to hold it indefinitely, borrowing against it as collateral. Using Bitcoin as collateral, as you would with a pile of gold or other possessions, allows the wealthy to avoid a capital gains tax. Keiser also believes that increasing Bitcoin adoption will pressure governments in the future to compete over crypto investors, much like we have seen with the enticing tax incentives in Puerto Rico and the Bahamas.
Bitcoin Loves Hunting- and Fishing-Friendly States Traditional wealth hubs like Delaware, New York, and California are stepping aside for states better known for their hunting and fishing, at least when it comes to cryptocurrency. Wyoming and Florida have been at the forefront of this tech adoption.
Caitlin Long, a Wyoming native and 22-year Wall Street veteran, has spearheaded legislation to make Wyoming a blockchain-friendly state after her alma mater, the University of Wyoming, couldn’t accept her Bitcoin as a donation. “Capital ultimately flows to where it’s treated best,” Long said on her website. The government of Wyoming took this to heart and decided to capitalize on the vast number of homeless crypto fortunes by passing legislation that favored these new age investors.
Miami Mayor Francis Suarez has adopted a similar ideology. The city surrounded by some of the world’s best fishing is now looking to entice tech, going as far to push for city workers to be paid in Bitcoin. “The City of Miami is actively exploring how we can best utilize Bitcoin and related technologies and are committed to supporting and attracting businesses and entrepreneurs innovating in the space,” a recent City of Miami press release stated.
Energy Use Concerns Only 21 million Bitcoin can ever be created, with the last coin predetermined to be “mined” by 2140. Currently, almost 19 million have been produced since the technology’s inception in 2009. As defined by the computer protocol, a fixed amount of Bitcoin is generated each day and this amount is chopped in half every four years. In 2009, 7,200 Bitcoin were produced each day, and after three “halvening” events, only 900 are produced presently. The next halvening occurs in the spring of 2024, bringing the number down to 450. Holders don’t lose any value when this happens.
To mine or create new Bitcoin, computers must use massive amounts of energy to solve complex equations that verify transactions on the network. Think of them as a decentralized governing group that keeps a check on the network by mining.
Miners are incentivised to protect the network and verify transactions with the prospect of receiving Bitcoin—an increasingly scarce asset. Without miners, Bitcoin ceases to exist, yet no single government or nation controls all the miners, making it theoretically impossible to stop.
According to the BBC, “Bitcoin uses more electricity than Argentina.” As time goes on, the equations get harder for miners to solve, requiring even more energy. The impact of mining has been a cause of concern for environmentalists for some time, and some companies and governments around the world have been looking to solve the issue.
Oilman Magazine claims that extraction companies are looking to use flared natural gas as an energy source to mine Bitcoin. The wasted gas that is traditionally burned off at the source would provide extra revenue for the companies while reducing waste. Beyond using flared gas, miners are expanding their efforts to use alternative energy sources.
For these efforts, look to the land of massive trout and puffins! According to Wired, Iceland has been mining Bitcoin using hydroelectric and geothermal energy for years, as well as providing some of the best fishing on Earth.
Bitcoin is the Game Meat of Currencies Michael Saylor, CEO and founder of the multi-billion-dollar corporation MicroStrategy, sought to preserve his wealth by investing in Bitcoin and hedging against money printing. From his initial investment, he has multiplied his wealth along with becoming one of the foremost thought leaders in the novel assets class.
“It’s the hardest money on Earth. It’s an institutional-grade safe haven asset,” Saylor said recently. “It’s gold without all of the imperfections of gold on a digital monetary network that moves at the speed of light”.
Since Bitcoin has increased an average 200% a year for the last 12 years, holders are rewarded by being frugal and not selling.
Frugality isn’t new to the hunting and fishing world. We strive to use as much of the animal as possible. Waste is considered tragic. This mentality is a consequence of knowing how difficult that meat was to acquire and our personal respect for that animal. If hunting was considered a job, the payment would be meat. That meat increases in value every time it is consumed because, after each meal, you are left with less of an already limited supply.
Conversely, the analogous meat to the U.S. Dollar would be factory farmed chicken. Consumers are ignorant to the system, buy in surplus, and waste it without remorse.
Final Thoughts Personally, I like to think big-picture when my feet are on top of a dozen fake mallards. Screw the shiny boat—if Bitcoin continues to rise, we may find ourselves living like Hemingway in Key West. Worst-case scenario, Chester and I will be drinking cheap beer on a rickety dinghy and probably still catching some walleye. That's a gamble I'm willing to take.
Feature image via Captured Creative.