Crypto Advice for Friends & Fam, Pt. 1: The Basics

Should I buy some? Is it a good time?

Y’all been asking me about crypto so now I shall speak.

I would like to start with a moment of silence for Mr. Nakamoto — dude has been responsible for a real boost in my self esteem lately. Now I get legit interest from peeps who hear I have both econ and engineering degrees. So I know now they don’t just want my body, they want my money too.

Jokes aside, let’s get to the FAQ, Pt. 1:

Should I buy some cryptocurrencies? Is it still a good time?

Depends.

Unlike paper money, almost all of these things actually have a purpose they are useful for. Ask yourself things like:

• Do you think your fridge be grocery shopping for you in the future? You might need some Iota.
• Got a factory and trucks? Walton is there for you.
• Into drugs and bombs? Monero’s got you covered.
• Programmer? You’re in for a treat — Have a look at Ethereum, Cardano, Ark, Lisk, maybe Stratis (although to be honest why anyone would do this in .NET I don’t even…)

If you want to trade casually, just don’t. Even though I try not to do profanity in writing, I need to make a point here, so apologies, but: You will be fucked. You are more likely to end up having wasted your time and/or fucked up your life. Just don’t. For every success story you hear, there are 10 amateur traders too fucked to show their face in public. Don’t do it. On top of all of the practical and philosophical problems I have with day trading anything, the thing with crypto is they trade 24/7 (so no more sleeping or being there to see your kid’s first steps), and the congestion in the infrastructure will fuck you up whenever any significant move happens. Stay away.

If you still want to go in, you have to know about hodling. The idea is, there’s a bunch of these things designed to actually be money that can pay for regular stuff, e.g. beer. Bitcoin is the famous one, and a bunch of others that are slightly less primitive. So you just buy some of this stuff and hodl until your local brewery starts accepting it. Fun fact is that the average Bitcoin network fee these days is almost as expensive as beer in Sweden. But I guess your average hodler these days would rather go for Ancnoc or Craigellachie or Bruichladdich or some other shit where you pay for someone else to pronounce its name for you when you order. So that’s OK.

That said, if you are looking for the one that will become the Facebook of cryptocurrencies, the one to get in on right now and hodl on to, I will let you in on a secret: It’s not invented yet.

I posted the above one night after I got about 60 calls in a week from friends and fam who heard about the magical “Bitcoin” on TV, thinking these are literate people who would stop calling me now. Next morning I wake up and find 60 messages in my inbox. So apparently their needs were not addressed. Hence, this addendum.

My point above is that unless you have a clear reason for using a cryptocurrency now or in the future, and/or some sort of positive fundamental belief about where things are going*, I don’t think you should be involved.

That said, it seems that I know quite a few people with some beliefs. So here are some more serious suggestions for the more seriously-inclined:

1. Realize that what you are intending to do is called “investing,” which is something people have been doing for a few hundred years now. Forget about crypto for a while and learn the fundamentals of investing. Google “how to invest.” (Ignore the auto-complete that adds “…in bitcoin.”) Learn about inflation, interest, stocks, volatility, indices, bonds, markets, dividends, leverage, and diversification. Consider other investments like a term deposit, metals, coffee, or your friend’s startup.
2. Once you get the basics down, realize that picking and buying cryptocurrencies is not much different from picking and buying stocks or other assets, in terms of the time, experience, and/or balls you’ll need. People who pick stocks invest in industries they understand, and spend time studying the companies and the markets. Currency and bond investors know about macroeconomics and keep an eye on politics and trade. These people also spend time learning the rules of the game and the tools of their trade. In the same way, cryptocurrency investors have to understand the technologies and economics they are dealing with. In many ways crypto is the worst of these worlds. This is — for now — the world of geeks par excellence, and you will be swimming in a lot of economic, sociological, psychological, engineering, and even ecological jargon in no time.

Let all of this sink in for a moment. Now you basically have 3 options:

1. If you are bored, and have regular people money, go home.
2. If you are bored, and your butler is reading this to you out loud in Received Pronunciation while you are getting a facial, contact me.
3. If you are excited, get to the next part.

*: A Lamborghini is not a fundamental belief, it is a dream, and dreams are what bubbles are made of.