Cryptocurrency — The Secret to Success

It may come as a shock to some, but the secret to success is not really a secret. For the most part it’s knowledge. To prevent catastrophic failure and ultimately succeed, education is key. When you consider market crashes that have happened in recent history, where would you place the blame? Without pointing fingers, it’s safe to say that the driving force behind them had been a combination of sentiment, lack of knowledge, and misleading information.

Dot-Com Parties

“Get large or get lost” — This was a popular motto used prior to the bursting of the dot-com bubble. Despite not having a working product, many ventures would spend outrageous suns of their investor’s capital to build market share and host notorious Dot-Com parties.

The internet was great before, and it still is. Would the dot-com bubble have happened if investors would have been as selective back than as they are now?

“Never invest in a business [cryptocurrency] you can’t understand.”
Warren Buffett, the ‘Sage of Omaha’

Subprime Mortgages

“Who stops paying their mortgage?”, house owners who can no longer afford to, because they bought an overpriced financial product that they didn’t understand. In 2008 the ‘subprime’ mortgage bubble led to the crash of the US housing market, and later impacted the global economy.

Sure you can blame the banker, but look at yourself and ask yourself this.. Would the housing market have collapsed if house owners understood what they were getting into?

And yes, the housing crash example was choosen because of The Big Short — 2015, a film based on the facts leading up to and around the 2008 financial crash. If you haven’t seen this film, I recommend you do.

“An investment in knowledge pays the best interest.”
Benjamin Franklin, Founding Father

Diamond or Rock

History shows that something can be great, and a bubble at the same time. History also shows us that crashes can separate the diamonds from the rocks.

Unfortunately it almost always takes a crash before preventive measures are taken, and even then, we allow history to repeat itself. In many cases there is no one, except for the short seller, who has an incentive to point out indications of an approaching crash. Governments, banks, traders, investors and house owners all benefit from a bullish market.

In truth I believe that cryptocurrency market is a bit of an exception. Governments and banks don’t necessarily benefit from the rise of cryptocurrencies, a topic for another post.

“Know what you own, and know why you own it.”
Peter Lynch, Fund Manager

Educate Yourself and Test Your Knowledge

There are some things that we are unable to change, but we can learn from them and consider the mistakes we made as lessons. A point of improvement in these cases being education. We cannot change what others may try to sell us, but we can learn to become diligent by doing the necessary research and study before making a decision.

Whether you already fully understand cryptocurrency and the blockchain, and you know what coins and tokens you own and for what reason, to continue to learn is never a bad choice.

Free tools like the DCORP academy can help you to educate yourself and test your knowledge to make well-founded decisions.