Welcome to the story of a crypto-warrior, I still can't believe it's me! My tale begins about a year ago before I bought my first Bitcoin. If you expect to read the latest hype or learn the deep state of crypto technobabble, then pass me by brothers and sisters. For this is a tale of a guy who didn't have a clue what he was getting into, and I'm still not sure I have a clue... This is my first story for the Steem community. Oh wait! This is my first story for anyone since I left school. This is Part 1 and depending how it is received it may be the last part.
Where shall I begin? Let's explore my state of mind concerning cryptocurrencies a year ago. I had heard of Bitcoin and.. uh... um... oh, I had heard of Bitcoin... I guess that was about it... I had been investing in stocks, bonds, options and even gold and silver, when one of the advisors I had been following started talking about cryptocurrencies. I tried to find out what was going on in this mysterious world. I read about block chains, wallets, colored coins, initial coin offerings, exchanges, addresses, public and private keys. As you can imagine, it was pretty overwhelming. Then I found out about what I call the Crypto War. It is not a war of missiles, guns, and death, at least not yet. It is a war of words, fear, heckling, disbelief, sniping, distortions, half-truths, bullying, and hype, it is all there and more. It is another battle of the government, financial, and embedded stakeholders against a revolutionary movement of visionaries and entrepreneurs who have the audacity, but also the knowledge and skills, to change the world, much as agriculture, assembly lines, electricity, computers, television, and the internet revolutionized the world.
One side, the cryptocurrency fanatics, talked about the brave new world that the block chain and crypto-currencies would bring to humanity. Eliminate government interference, the need for middlemen and women, the tyranny of financial institutions, and those who take their slice of the pie out of every transaction. Speed up the exchange of money, goods, and services. Give the masses of humanity the freedom to be heard, the freedom to choose from an unprecedented variety of opportunities, and have their peers judge them, not a broker, publisher, bureaucrat or some other gatekeeper wienie standing in their way. Ensure security and trust for any exchange between parties. Wow!! I can’t wait till all that happens!!
Then there is the other side. They claim it is all a scam. A bubble like the technology bubble of 2000, the housing bubble of 2007, the soap bubble wand I had as a kid… but that’s another story. Stay away or you will lose your money, security, privacy and maybe even your underwear. The exchanges will be hacked, your electronic wallets emptied.
Enough of this rant. I will leave it up to you to judge the merits of the two sides. As time goes on we can hope the truth will reveal itself. I only bring up the “war” to reveal my state of mind and the confusion I faced a year ago. So how did I dip my toe in the raging waters of cryptocurrency and in particular Bitcoin? As I said, I had been following an advisor who began talking about cryptocurrencies. The first recommendation he made was to buy Bitcoin. But he provided some fundamental guidance for anyone wanting to invest in cryptocurrencies:
- Cryptocurrencies are extremely volatile: wild price swings are normal, you can lose your money or make a lot of money quickly. And just as quickly the winners can become losers and the losers winners.
- There are a lot of coins out there (well over 1000), they run the whole gamut from exciting, promising, uncertain, mediocre, junk, and scams to take your money. Even the best can go under and never be heard from again.
- If you want to be successful, you need to understand the potential value of a coin before you invest in it. Who is backing it? How sound is the idea? Are important partners or stakeholders working to make the project underlying the coin successful? Does the team implementing the project have the technical skills, management skills, and strong connections with others who are willing to work with the team or provide them resources to be successful? Is the project in the dream stage or is there a solid plan or, even better, a partial implementation that demonstrates its value?
- You need to invest in more than a handful of coins types. If you own two coins, you are less likely to be successful than if you own 10 coin types.
- Make the size of your investment in each coin small, with the idea that if you lose all of your money you won’t be hurt. Even if your investment is small, the enormous potential of cryptocurrencies can turn a couple of hundred dollars into tens of thousands of dollars.
That’s enough to give you an idea what I was reading at the time and that guidance has paid off enormously. You’ve probably had enough of me for now. If you want to know more, then you know what to do. Give me your feedback. The next time I will get into the next part of my tale. I’ll tell you what happened when I tried to purchase my first Bitcoins.