Having been in the Bitcoin space as a Bitcoin educator building a community geared towards using Bitcoin for what it was meant to be, money, I often find myself diving deep into the financial intricacies of various savings and investment plans. Recently, I had an enlightening conversation with a passionate Bitcoin trader, (yes i said trader)at a Liberty Students event.

I don’t advocate for Bitcoin trading, but i know because i have been there there are people making a living out of it, We can’t dismiss that it is happening and more often than not, the people doing it do not understand what powerful tool they are gambling with, which is okay because when the time come, they will, their right time. Their deserved time and deserved fiat price.

This interaction prompted me to delve into the calculations of NSSF (Kenya’s National Social Security Fund) deductibles and explore the potential of Bitcoin as a hard currency over a span of 20 years. It is important to note that this is just but a hypothesis not the real thing and it is with the help of AI that i came up with this.

The calculation of Nssf deductibles of ksh1080+ employers ksh1080 for a period of 20 years, based on the average inflation rate 2%.

1. What is the value accumulation ?

2. What is the value inflated?

3. What is the value lost?

4. What if the money was kept in a hard currency like Bitcoin, how would that look like?

1. Value Accumulation

The total NSSF (National Social Security Fund) deductibles over 20 years from both the employer and employee contributions:

1080 KES (employee)+1080 KES (employer)=2160 KES/month1080

Total for 20 years=2160 KES/month×12 months/year×20 years=518,400 KES

2. Value Inflated

To calculate the future value considering an average inflation rate of 2%, we can use the future value formula:

FV=PV×(1+r)n\text{FV} = \text{PV} \times (1 + r)^n

where:

• PV = Present Value (518,400 KES)
• r = inflation rate (2% or 0.02)
• n = number of years (20)

FV=518,400 KES×(1+0.02)20{FV} = 518,400

FV=518,400 KES×(1.485947){FV} = 518,400

FV≈770,267.52 KES

3. Value Lost

To find the value lost to inflation, we subtract the original amount from the inflated value:

Value Lost=770,267.52 KES−518,400 KES=251,867.52 KES

4. Hypothetical Bitcoin Investment

The value of Bitcoin is highly volatile and has varied greatly over the past 20 years. However, let’s assume a hypothetical constant growth rate.

Let’s say Bitcoin grows at an average annual rate of 30% (a high estimate, but for illustration purposes):

FV=PV×(1+r)n\text{FV} = \text{PV} \times (1 + r)^n

where:

• PV = Present Value (518,400 KES)
• r = annual growth rate (30% or 0.30)
• n = number of years (20)

FV=518,400 KES×(1+0.30)20 = 518,400

FV=518,400 KES×(190.04)= 518,400

FV≈98,495,136 KES

Summary

1. Value Accumulation: 518,400 KES
2. Value Inflated: 770,267.52 KES
3. Value Lost: 251,867.52 KES
4. Hypothetical Bitcoin Value: 98,495,136 KES

Disclaimer! This is not financial advice.

This exercise is just to juggle your mind, as we all know our minds need to be triggered to take action. Take action by looking in to Bitcoin, study Bitcoin, it just might be it.

Warning! Do not engage before you fully understand, you may loose you money!

Once again i remind you that this is just but a hypothesis and not a guide but something to open up your mind to see Inflation what it is. Theft of your value and time.

Cheers bye!