Living on Bitcoin is Easy — If You Don’t Mind Being a Part-Time Trader

Before leaving for the states the other day, I decided to experiment with using Bitcoin for all my daily expenses while travelling. This is easier to pull off than it used to be because of all the card solutions out there — I’ve had the Xapo debit and ANX prepaid cards since earlier in the year and they both work quite well. (There are literally tons of these Bitcoin card providers available now — in the Philippines, VMoney’s BitCard is available for about $2, although I was sadly unable to get one before I left.)

The Xapo card (left) is a pure Bitcoin debit card while the ANX card (right) is prepaid.

The distinction between the Xapo and ANX cards is subtle but significant. Xapo’s card is “true” debit: it’s attached to your Xapo Bitcoin balance, and whenever you spend money with it, it does a real-time conversion of Bitcoin-to-USD-to-local-currency. It’s for this reason that I never use it in the Philippines — the additional USD-to-PHP conversion tacks on more than 2% in fees to the final ticket price. But in the states, or in any situation where USD is the actual settlement currency, it works great!

Meanwhile, the ANX card isn’t directly attached to your Bitcoin balance. Instead, you need to manually sell the Bitcoin in your ANX wallet in exchange for HKD, that will then get forwarded to your card. This sounds like it’s almost the same thing, but there are two big differences: one of them practical, and the other strategic. The first is that you have to make the decision to sell your Bitcoin as much as 24 hours before you need fiat on your card, because although the conversion is instantaneous, the deposit process is apparently not.

The second difference is that there are obvious ways to optimize the amount of fiat you end up with — essentially, you just need to wait patiently for a good price quote before you do a big sell. (In contrast, spending with the Xapo card leaves you at the mercy of the current exchange rate.) I’ve been able to squeeze out the equivalent of an extra cup of coffee or a Caltrain ticket by doing this … which probably doesn’t matter in the grand scheme of things, but is an interesting consequence nonetheless.

And thus armed with these two cards, I was off! I suppose it’s fitting that I did this experiment during a period of extreme volatility in Bitcoin’s price — if it were easy then there would be nothing to talk about. The recent bull run saw a near doubling of the price in a matter of days, and the fact that no one knows what’s causing it is just so Bitcoin. (The Financial Times thinks otherwise though.)

Yeah, that didn’t last very long. (Timestamp is PH time, by the way.)

The price was peaking past $490 as I was flying out of Manila on Wednesday evening. By the time I was back online in San Francisco 13 hours later, it had dropped to $440 — a $50 drop!

I was basically looking at my travelling budget withering away before my eyes. A dozen cups of coffee, basically erased by the trading decisions of thousands of anonymous Chinese Bitcoiners halfway across the world!

Panicked, I logged on to my Uphold (formerly account, deposited all my Bitcoin, and locked it to the current USD price. For the uninitiated, Uphold’s most compelling pitch is that it’s a free mechanism for jumping in and out of various currencies, Bitcoin included. So by throwing my Bitcoin on to their platform, I was effectively preserving its value at the current USD rate of around $430. (The downside to this approach is of course that if the Bitcoin price rebounds, I’ll get left behind.)

As luck would have it, Bitcoin’s price continued to plummet, hitting the $380’s as the evening wore on. So although I had lost $50 while in transit, I had narrowly avoided an additional $50 loss by converting my BTC at Uphold.

Now I found myself stuck in a weird situation. Although I had protected my travel budget, I had also effectively removed it from circulation. In order to spend it, I would have to send it all back to my Xapo account, which I was hesitant to do because the price was in a major state of flux. And due to the aforementioned deposit delays, ANX was probably not going to be a viable solution.

Eventually I hit upon a simple system. Every morning I would transfer a small amount of Bitcoin from my Uphold to my Xapo card, thus limiting my exposure to just a single day’s worth of volatility. My main stash would remain at Uphold, enjoying its static value, until such time as Bitcoin’s exchange rate decides to edge past that $430 mark (if at all). Theoretically, I would then jump back into BTC, and ride the price upwards again before jumping back into USD.

“Theoretically” is the operative word here. In practical terms, what I’m really doing here is making a stand at $430. It’s likely that I won’t be able to watch the price closely enough or move fast enough to be net-positive, but at least I wasn’t bleeding money anymore than absolutely necessary.

I honestly don’t know how many people would be willing to go to this much trouble, or even just put this much thought into how much their money is worth on a daily basis. Being intimately familiar with what bitcoin’s volatility is capable of is definitely not doing me any favors, because I can’t just let it do its own thing. Instead I obsessively try to optimize every expenditure, and then throw up my hands in frustration when I realize that it’s just too much effort for the kind of small personal amounts that I’m dealing with.

Theoretically again, an Uphold debit card would be perfect for this situation, because it would at least eliminate the transfer times I have to contend with by moving it over to Xapo every morning. I imagine that’s got to be one of the things on their to-do list. In the meantime, I guess I’m doomed to giving myself an allowance in Bitcoin every day.


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