To gain knowledge we must learn to ask the right questions; and to get answers, we must act and not wait for answers to occur to us. - Anatol Rapoport

Well I have a lot of questions actually.

Since Steemfest² I feel even more attached to the crypto world. Being inspired by the dynamic of this community, during the past weeks I've been constantly talking with people - inside and outside this network - about the future of Steem. Also Steemit Inc, called for input in order to outline their #roadmap2018. Thus, looking ahead is pretty hip these day!

The more I get involved in all these talks, discussions, visions, the more questions arise. One of the crucial issues for the future of Steem seems to be the probablity of new investments.

In that context I was asking myself:

Which might be THE key drivers in long term crypto investments?

In order to get a qualified answer, I contacted Philipp Knirck, a developer, crypto investor and Steem(it) enthusiast. He's one of the early adopters who signed up to Steemit in July 2016 - user: @knircky. He's furthermore the one to blame for me joining the platform, too.

Here's what I always wanted to ask a crypto investor!
PS: Get yourself a large coffee, this is one of the longer blog posts, full of interesting information and great insights.

@surfermarly holding one of the treasured Silver Steem Coins given by @virtualgrowth and wearing one of the new Steem shirts, commemorating Steemfest²

Let's talk about these coins! 🔮

To be honest the idea of this interview also follows a self-interest.

Up to the present I haven't invested in any cryptocurrencies. My account @surfermarly has generated 26,971,078.987 VESTS since July 2016 only by blogging and curating. I feel a high degree of loyalty towards this network, so whenever I'll have the possibilities to invest, the first project to consider would be Steem.

Still my relatively small input supposedly won't make a huge difference.

There are some people who have already powered up big amounts of Steem. One of them is my today's dialog partner, Philipp Knirck.

10 questions for @knircky and 10 answers for us:

Hey Philipp! First of all thank you very much for your time. I know you're a quite busy man, so the fact that you agreed on this talk means a lot. Here's my question aiming to learn a bit about your crypto background: Where did you hear about cryptocurrencies for the first time and what did exactly bring you to invest then?
I am a geek and somehow picked up some news about it in 2011. I ended up trying it out to play online poker on some EU site. I bought about $200 worth to play with at $16 per Bitcoin, basically just to try this 'weird internet' money.

I had to go to CVS (a pharmacy) across the street from where I live, to pay cash and used some weird bill pay system, which was strange. But I was very impressed to come back to my PC at home and have the Bitcoins in my Bitcoin wallet already. I did think this internet money is silly and did not invest further in it.

One year later I checked the price and it was $6. I felt so smart to not have fallen for the obvious silliness. Another year later, now 2013, I saw the price at $100 and freaked out.

I thought: F$#%CK I could be rich by now!

So now I studied it after work by reading the Bitcoin whitepaper and watched some videos from Andreas Antonopolous.
I immediately understood that this money was going to have the potential to change the foundational power structures of our society. And I had to be part of it.
The price was now $200 and I bought a little.

A day later the price was $260 and I was happy. Then it crashed to $60 and I felt stupid. It was not about the money, but I just hate making bad decisions. I was crushed, not understanding how lucky I was to have just received the full experienced of my first Bitcoin bubble at such little the cost.

Even after losing 80% of my investment I was still convinced that Bitcoin was magic tech.

I kept on buying just small amounts, creating accounts at Mt. Gox but still I was burned and very careful. I bought my last full Bitcoin for $70 in the 2013 correction, when I made a decision to invest seriously. I moved some 'real' amount to Mt. Gox so I could buy a lot of Bitcoins.

But then the next bull run started and I kept waiting for the price to come down again under $100 not wanting to get burned again and never bought any more. Overall I had a small amount invested less, but when the price rose from $70 to $1200 this tiny amount was worth a lot to me. Because I did not want to lose 30% of it to taxes I decided not to sell, even though I expected a correction, just not one to 90%. And I saw what was a fortune to me evaporate to a tiny amount again. I lost of 1/2 my Bitcoins on Mt. Gox when it collapsed and 90% of the rest of the value in the crash.

But I had been buying every time I thought a bottom may have formed, so even though the dollar value of my Bitcoins went down, the amount of Bitcoins started to rise. I also started investing into other projects including the ethereum crowd sale and a few others. At the end of the bubble I had more Bitcoins than before I lost 1/2 on Mt. Gox and a small portfolio of other coins. But the $ value was very small again. Additionally I went through the harder part of my life as I went broke trying to start a business and ended up in serious debt.

The bottom of my life financially was also the bottom of the Bitcoin bubble and I ended losing all my assets getting rid of debt.
But I made one key decision to keep some debt and pay interest so I could keep my cryptos. I cancelled my phone service and did not buy the usual tech toys such as iPads like I usually do, changed my lifestyle and started saving. And the saving was done in crypto, which was crazy given how much money I had lost doing this so far. But as soon as coinbase started allowing automatic buying of bitcoin I started to weekly buy as a savings habit in addition to putting any extra cash I had into crypto.

I also started to diversify my crypto portfolio trying to invest small bets into every project that I thought was a good investment. And of course I have been addicted to learning about the space since the beginning of 2013 and kept reading and learning as much as I could.
Never selling any crypto and saving as much as I could automatically and weekly is the reason why today I have a sizable portfolio.

Wow, what a ride! You must be definitely convinced of this technology and market! Next question: Besides Steem and Bitcoin, which coins are you currently holding?
In addition to my weekly savings strategy I have many coins that I accumulated with a VC type of investment approach. What I mean by this is that I take a small amount and try to invest into good projects as early as possible. Then I assume that the money is gone unless the project succeeds which I assume to not be the case 90% of the time and just hold and watch the projects. I would sell only when I am convinced the project does not make sense any more.

I have already lost a good amount of money in projects. Swarm and LTBCoin are examples of such losses. Recently my strategy has changed because of the ICO craze, where I cannot invest into every cool project any more and I am much more restrictive now, also because I don’t the like price of many of them any more.

Example: I love Gnosis, but have not bought any coins because I don’t like its price. But I plan to pick up some when the current bubble burst and everything will be dead cheap again. There are a few projects that have made me significant paper gains already. Lisk, Bitters, Dash are some and most of all Ethereum, which is up 1000x from its crowd sale.

One exception to this is Steem. I believe so much into this project that I have put probably more money into it than was sensible from a financial perspective.

So my portfolio is very heavy weighted to Ethereum and Bitcoin and I am very happy about this. I still weekly buy both of these coins in equal $ amounts. Then there are many coins that together make up about 1/3 of my holdings. Steem is an outlier value wise in this group and is my clear 3rd largest holding but followed by some projects that have made good runs. I would like to re-allocate my portfolio to have more like 10 coins be my main coins and have more focus and diversity, however for tax reasons this is not smart. Also anything I buy with my cashflow has no impact on the portfolio anymore, so the portfolio structure is much more driven by taxes and how each coins performs.

My portfolio structure will likely change when the current bubble burst as I plan to then get into some cash to pick up good projects when they are cheap at the bottom.

I also I want to point out that having so much of my money in Ethereum and Bitcoin is not smart financially. However I think this is such an amazing chance that an exception has to be made to standard investment strategies at the the very very likely risk of lose most of my net worth. In fact I expect to be losing 70-90% of my net worth in the next two years. I will try to prevent this but am totally accounting for it.

So what I am doing is very crazy. I am literally gambling with my life worth but this is such a historic event that I believe it is right for me personally to do so.

It seem that all the rumors about investors being extremely courageous people are true! Amazing! Next question, Phil: How and when exactly did you find out about Steem / Steemit for the first time?
I missed out at first and read news about it when steem executed first payouts. The price was $0.7 and I was mad at myself to have missed a Dan Larimer project who I had followed before. On that day I bought my regular 'small' amount then studied the white paper. This took me 3 days, at which point the price was $4. Hating myself even more now I thought:
This is gonna be huge!

Then I decided to treat Steem differently. I bought a significant amount for me at the time for about $3 per Steem.
$3 per Steem, OMG! I guess you're impatienty waiting for the next peak though. Next question: You're currently holding almost 60,000 Steem in the wallet of your account @knircky. From our previous chats I know that you bought smaller amounts of Steem repeatedly. Which were your reasons each time?
I wanted to really be part of this project as I think it is very very special. I believe that Bitcoin has created a new organizational structure that can do some things better than existing structures such as hierarchical companies and governments. But so far we have not seen much executed successfully and this new decentralized structure is still being tested for money and platforms etc.

Steem is the only real mainstream application that is run by a blockchain and in a new way that I think is better than the traditional social media business model of farming data and selling adds.

As such I see huge potentials that I want to invest in. I also thought that there were many economic design decisions that are very interesting, powerful and revolutionary and yet need to be tested. I bought Steem at prices from $3 all the way down to $0.1. If the price comes back it is very easy to make up the big mistake of buying at $3 with a small buy at $0.1. So I simply kept laddering convinced the price would eventually come back. I took small amounts every month that I could spare and bought into Steem.

Now this does not work any more as well as I cannot increase my Steem Power by 20-30% any more with my spending money. However I still invest in Steem and think right now the price is cheap. My investments just do not show as much any more.
So in short the reason for my buying many small amounts was a) technical and financial (laddering) and b) because I believe in Steem.

Since the price is relatively cheap right now as you said: Are you planning to power up more Steem in the near future?
I have never powered down and keep powering up as much as possible of the rewards that I get. I am not sure if I will relocate funds from some place else. I feel that there are some issues with Steem that are not addressed strategically which worries me a lot. If these would be addressed I certainly would pile in more aggressively.
Interesting! Let's get a bit more into detail here. Which are the characteristics you like most about Steem / Steemit and what would you change/improve though?
I like that really a new economic business model was created to fuel a social media application. Steem has created a new business from scratch and is very unique to anything else both in crypto and social media. I don’t mind that not everything is working perfectly yet and I love that I don’t need an app to use the platform on my phone/ipad.
I see three really big strategic issues with Steem.
a) The distribution of wealth:
Money is concentrated with very few. This is not an issue from a stakeholder perspective but since stake is part of the user experience it becomes one. I believe this needs to be fixed and steem cannot grow without fixing it. This was actually addressed with the previous monetary model where a constant 10% inflation would have reallocated all wealth to new active users over time. We need a system where median and average SP is much closer. I have some ideas how this could be done but that is for another article.

b) Curation:
Voting on Steem is influenced by profit. This distorts what voting should do. When someone gives an up vote it should mean she loves the content. However currently it is smarter to vote for things for profit reasons due to the curation rewards. This destroys the main value creation process and is really really bad. People should not be rewarded for what they up vote so they can just vote for what they want. Rewarding activity is great so curation should imho just become a VIP system that rewards activity.

c) Revenue:
Steem has no outside money coming in so all value has to come from investments. This only works when the project is growing faster as its dilution rate and limits profits for investors.
It also limits how much users can earn. I have a solution for this using bounties and would love to implement if I can find someone to work with.
If you know any developer send them my way. I am happy to also invest in this project.
Sure! Maybe one of these developers is reading the interview now and will contact you afterwards. Talking about projects: You're a developer by yourself. Have you ever thought about investing in a project (e.g. application) built on the Steem blockchain or even offering your skills to services like utopian.io?
Yes, I want to fix the revenue issue of Steem with a project. I have had quite some problems finding developers that I can pay to work with me on this. Unfortunately I have been a little to busy with work and life to focus on it enough but hope that this may change soon.
How excited are you about Smart Media Tokens?
I love it. Steem’s business model can work for many projects.
I am very happy that with Ned Scott and Steemit we have real driving force in making steem better and that @ned is really creating valuable change and moving steem forward. His energy is amazing.
I believe that it is important to focus on the core competency of Steem and most importantly Ned needs to figure out how to make users happy and bring growth back to steem. I am not sure if SMT are the solution to that.
You blog post on steemit.com from time to time, which type of content can people find in your account? And which type of content do you upvote?
I love Steem and every once in a while blog about things that interest me as well as vacation stuff. Unfortunately I don’t have enough time to write more but I will surely keep writing and posting on steem. I have had a few articles that have gotten decent up votes and that was always very thrilling.

I up vote daily. I up vote anyone that up votes me and interacts with me as i think that is what social media is about. I also constantly look for any good content and up vote that. There is also content I specially like such as chart analysis that gets lots of up votes from me. And I focus on new users and those that get little reward to deal with the issue of wealth distribution. So overall I try to have a balanced strategy to benefit myself and everyone at the same time and try to be a good valuable user on steem as much as I can.
If you had one wish for free regarding the future of Steem, what would that be?
Find the perfect partner that can implement my bounty idea and solve the revenue issue of Steem.

Wow, that was incredibly interesting, Philipp @knircky! Thank you very much for your time and insights. I'm looking forward to reading more about your project ideas in the near future. Also I hope you will find some skilled developers in order to make it real.

Everybody who felt inspired by this interview, who has some further questions or wants to add something from their own perspective is kindly invited to open the dialog down here in the comment section. Tag @knircky if you want to address a question directly to him. As we all learned: he's the expert! :-)

Have a nice and profitable Monday, everybody!

Marly -

Thanks for your valuable time!
This blog was launched at the end of July 2016
aiming to provide stories for open-minded
people who enjoy living on the edge of their lives,
stepping out of comfort zones, going on adventure,
doing extreme sports and embracing the new.
Welcome to the too-much-energy-blog!

PS: Don't forget that this is a troll-free zone.

Original content. Quote found on freepik.com, jeroen-de-flander.com, quotefancy.com, pinterest.com and addictionrecoveryquotes.com.