Peter Jakubowski of Crypto Academy On The 5 Things You Need To Understand In Order To Successfully Invest In Cryptocurrency
You should have a plan for when you intend to sell your tokens. Otherwise, you may be tempted to give in to your emotions. In the event that the price of the token is high and you should sell, you may become greedy and wait for even higher prices.
Over the past few years, the cryptocurrency industry has been making headlines nearly every week. Many people have gotten very wealthy investing or leading the cryptocurrency industry. At the same time, many people have lost a lot while investing in the industry. In addition, more people have been scrutinizing the ecological impact of crypto mining, as well as its potential facilitation of illegal activity. What is being done and what can be done to address these concerns?
In this interview series called “5 Things You Need To Understand in Order to Successfully Invest In Cryptocurrency” we are talking to leaders in the cryptocurrency industry, as well as successful investors, who share insights from their experience about how to successfully invest in cryptocurrency.
As a part of this series, I had the pleasure of interviewing Peter Jakubowski, Principal CEO, of Blox Inc.
Peter — or CryptoPete, to his students — studied International Business, Business Finance, Canadian Security and Exchange and Blockchain Development. Helping people is something he enjoys and teaching them, Peter has a tremendous passion for cryptocurrencies and believes it is the future.
Thank you so much for doing this with us! Before we dig in, our readers want to get to know you a bit. Can you tell us a little about your backstory and how you grew up?
As a child, I grew up in Toronto, the largest city in Ontario. My goal from day one was to become a stock trader. Despite the crazy stress and all the numbers and lines, I enjoyed the experience of building up my career and making a name for myself in the industry; my high school years were spent buying transit ticket packs at significant discounts and then selling them to students for a profit.
Out of high school, I started my own transport company at the age of 19 and grew it to 21 trucks before selling it three years later. I used the funds to pay my way through college, where I studied general business, business finance, international business, mortgages and Canadian securities. After opening my own mortgage brokerage called Mortgage For You, I grew it to amass $6M in mortgage sales before, like my transport company, I sold it off to another brokerage.
When I first became interested in Bitcoin, I purchased my first BTC for $0.001. My current job is running Crypto Academy Canada, where I provide people access to the crypto ecosystem and passive income opportunities using cryptocurrencies (as well as teach them how to navigate the crypto landscape).
Is there a particular book, film, or podcast that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
In Blockchain 2035: The Digital DNA of Internet 3.0, as the name suggests, the digital DNA of internet 3.0 is revealed. The book does a fascinating job of explaining Web 3.0, if you’re a crypto geek like me.
Is there a particular story that inspired you to pursue your particular career path? We’d love to hear it.
At 19, I took a part-time job as a valet driver at a casino and was blown away by the experience.
One evening, when I was working the ramp, a brand-new Ferrari pulled up and requested I park it right there on the ramp. I told the guest it would cost $100 cash, but he refused and called the VIP on me. When VIP arrived, they told me to just park on the ramp, but I countered with the information that it was a fire route and, therefore, I could not park there.
Although it was illegal, I was willing to watch the car and, if necessary, move it for $100. The gentleman paid me the $100 and also offered me a free internship at his financial firm. This would end up being my official introduction to both investing and crypto.
Can you share a story about the funniest mistake you made when you first started? Can you tell us what lesson you learned from that?
I threw away a paper Ethereum wallet with 12,000ETH, worth $190,000 USD today. Certainly not one of my finest moves, but one that I will never forget.
None of us are able to achieve success without some help along the way. Is there a particular person you are grateful for, who helped get you to where you are? Can you share a story about that?
As a child, I was given a space where I could fail without being judged. As a result of my mother’s support and the creation of this environment, I have achieved my goals and aspirations.
Are you working on any exciting new projects now? How do you think that will help people?
We are introducing blockchain private markets that offer access to unique markets and technologies with higher returns. It includes venture capital funds, hedge funds, real estate investment trusts, crypto funds and private debt and equity funds. These are registered STOs on the blockchain.
Okay, super. Thank you for all that. Let’s now shift to the main focus of our interview. The cryptocurrency industry seems extremely dynamic right now. What are the 3 things in particular that most excite you about the industry? If you can, please share a story or example for each.
In spite of the fact that the crypto ecosystem is extremely diverse, three points stand out: cryptocurrency insurance, carbon credits, and tokenized real estate.
1 . Crypto insurance can serve as a tool for the cryptocurrency industry to build trust within the crypto ecosystem, regardless of whether it moves towards centralization or decentralization. Decentralized insurance protects against scammers, fraud and currency depreciation, which have occurred in the industry not long ago.
A recent cryptocurrency crash is estimated to have caused investors to lose between 40% and 60% of the value of their cryptocurrency portfolios. Depending on the policy, insured portfolios would recoup at least 50% of investors’ investments.
2 . Adding carbon credits to the crypto ecosystem is a very exciting development. The carbon credit market is expected to reach $27B by 2027. Individuals will now be able to choose from hundreds of environmentally-friendly projects as part of the new feature. Blockchain technology enables a large ecosystem of products that can contribute to a sustainable future.
For instance, one can reduce their carbon footprint by buying carbon credits, but also by earning points and exchanging them for carbon credits while shopping. Additionally, you will be able to earn interest on the platform by burning your carbon credits to receive a collectible NFT. NFTs based on carbon credits may also be held as investments.
All of this results from climate change, which has affected every country worldwide. According to the United Nations, the average surface temperature will exceed 37.4°F (3°C) in the 21st Century. As a result, it is crucial to reduce our carbon footprint along with radical emission reductions to prevent global warming from worsening at an increasingly high rate.
3 . Real Estate Tokenization was introduced to the crypto ecosystem in 2018 and provided small-scale investors with a great way to invest in real estate.
Two main issues arise when investing in real estate. In the first instance, there is a large amount of investment required. Therefore, most individuals are priced out of the market. In the second instance, there is a lack of liquidity, as your funds are frozen until you sell.
By tokenizing real estate, investors can take advantage of traditional real estate’s high returns with smaller investment amounts and lower minimums. During tokenization, real estate pieces are fractionalized to increase their liquidity. With blockchain technology, real estate tokens can be easily and securely transferred, allowing investors to diversify their portfolios, minimize risk and create liquidity. The appeal of this type of investment is that it is backed by property. Payments are made to investors on a daily basis, and the token’s value increases as the property appreciates.
For example, let’s say there’s an investor named Tyler who owns a property and needs funds. Instead of approaching a bank, he tokenizes a portion of a particular property; he thus requires $50,000. His property is 2,500 square feet, and he is offering to tokenize 1,000 square feet of this at a 1.5% APR for 10 years for $50 per square foot. Investors who purchase these‘Tyler Tokens’ have the option of selling or holding them, earning income over the next ten years.
What are the 3 things that concern you about the industry? Can you explain? What can be done to address those concerns?
The major concerns facing the industry are regulation, fraud and liquidity. Stablecoins, in particular, require some form of regulation, as anyone familiar with cryptocurrencies can attest. Due to TerraUSD’s (UST) failure to meet its $1 price target, widespread sell-offs occurred across the crypto market. Stablecoins should be regulated by the SEC to ensure that they meet the same standards as other currencies.
It is crucial to start with sites such as CoinMarketCap and CoinGecko, that post all of these tokens to prevent crypto fraud. As a result, in the crypto space, fraudsters can publish their tokens on CoinMarketCap and CoinGecko relatively easily. All you need are social media accounts and followers. No business registration, no ID or KYC (Know Your Client) to ensure the token being listed is legitimate. The fact is, there is a multitude of online companies that sell fake followers for as little as $4. In the industry, it is common to say DYOR — or Do Your Own Research — but what responsibility do these sites have for the validity of the information they provide? Currently, there are none.
Several recent events have demonstrated that centralized exchanges lack liquidity, which makes them less secure than decentralized exchanges. Poor management decisions or risky moves may be responsible for this. Are decentralized exchanges safer? Possibly, since the community works together as a team for the same purpose: to make money, as opposed to centralizing exchanges. Even though there is no evidence suggesting that one is better than the other, centralized exchanges remain risky without regulations in place.
What are the “myths” that you would like to dispel about cryptocurrency? Can you explain what you mean?
A common misconception about cryptocurrency is that it is a scam. Does the industry have any scams? Yes, they are also available in the traditional market, with Theranos being one of the most notable examples. While cryptocurrency scams are no different from those found in traditional markets, it is important to follow the old saying, “If it sounds too good to be true, it probably is.”
How do you think cryptocurrency has the potential to help society in the future?
Using cryptocurrency to provide social assistance to individuals in need can be a very useful tool. Wouldn’t it be wonderful if social assistance programs could self-fund? Currently, social assistance programs are funded by taxpayers, who account for a significant portion of tax revenue. Assuming that a person receives $1,000 in social assistance each month, that would translate into $12,000 annually.
In the scenario of a government-backed Yield Farm bank offering 10% annual interest to outside investors, the original $12,000 would increase in value, and the yield farm would become self-sustaining. As the token rises in value, investors and the government will reap the rewards. However, individuals will continue to receive the same amount, regardless of whether the token increases. Each time an investor transacts on a yield farm, the government receives additional fees and can generate additional revenue by adding taxes or staking options. Social assistance programs would be less expensive to maintain since the yield farm would be self-sustaining.
Recently, more people have been scrutinizing the ecological impact of crypto mining. From your perspective, can you explain to our readers why the cryptocurrency industry is creating an environmental challenge?
The ASIC machine (a cryptocurrency mining machine) will continue to be used by Bitcoin; despite the slow phase-out of Proof of Work, the first mining mechanism remains available to the public. There is no chance that its algorithm will change in the near future, and it would be very difficult to change it.
During the past three years, the crypto industry has made great strides toward being environmentally friendly. The majority of tokens today do not utilize Proof of Work, with approximately 90% of stakeable tokens having moved from Proof of Work to Proof of Stake, (e.g., Ethereum). Proof of Work mining was done solely for profit, without regard for the environment. Bitcoin was — and still is — the most profitable cryptocurrency asset.
That said, a number of experts have called out the crypto space for its massive power consumption, including Elon Musk.
From your perspective what can be done to address or correct these concerns?
Since the Bitcoin algorithm will not be changed, it will continue to use ASIC machines. Making them more energy efficient might be a solution; however, until there is a token that utilizes Proof of Stake that surpasses Bitcoin, Proof of Work will continue to be utilized.
Recently, more people have been scrutinizing cryptocurrency’s impact on illegal activity. From your perspective, can you explain to our readers why cryptocurrency, more than fiat currency, is seen as an attractive choice for criminals?
Fiat currencies are controlled by governments or banks, while cryptocurrencies are decentralized. Traditional banking requires banks to know who, what and why you send money, whereas crypto doesn’t. At any time of the day, you can send whatever amount you want to anyone without question. Although some tokens cannot be tracked, like Monero, all information on the blockchain is public information, and most can be tracked; however, wallets are never registered to anyone, unless it is a centralized exchange.
From your perspective what can be done to address or correct these concerns?
Although cryptocurrency is meant to be decentralized, if wallet providers started performing KYC (Know Your Client), this could make it easier for authorities to identify who is behind illegal activities.
Okay, fantastic. Here is the main question of our interview. What are “The 5 Things You Need To Understand In Order To Successfully Invest In Cryptocurrency?”
Cryptocurrency markets exhibit a cyclical nature. The importance of this knowledge for long-term investors cannot be overstated. Markets are divided into three phases: bull markets, bear markets and accumulation phases. It is also apparent that the cycles are extending and that returns are declining. As a result, the next cycle will likely last for five or six years and yield lower returns than the current cycle.
Be careful not to chase the pump. In most cases, people invest in a coin because it has seen a recent significant increase in value. This is known as “chasing the pump,” and is a bad investment strategy. It is common for people to buy into a coin after it has pumped, but this is likely to result in you losing a significant amount of money. Since other people will begin to take advantage of the pump, it will consequently cause the price to fall again. In addition to this, you should take into account the opportunity cost of not investing in what may be the next coin to boom. Generally, it is best to focus on coins that will perform well in the long run, rather than short-term “pumps and dumps.”
Trading is a challenging endeavor. The majority of people are better off holding investments for the long term. It may be possible for you to make it if you are experienced in trading stocks or other assets. The volatility, however, will eat away at you if you are a beginner. The majority of people are likely to see more success by allowing their investments to accumulate over time, holding out through the ups and downs long-term.
In fact, it is rational to invest for the long term (more than one year), but it is not rational to invest in the short term. No one can predict what will happen tomorrow, next week or even next month. A number of factors must be considered, and in the grand scheme of things, anything can happen. There is a great deal of short-term noise that has been canceled out, and we can discern something meaningful about the future using data science models and historical data.
You should have a plan for when you intend to sell your tokens. Otherwise, you may be tempted to give in to your emotions. In the event that the price of the token is high and you should sell, you may become greedy and wait for even higher prices.
What are the most common mistakes you have seen people make when they enter the industry? What can be done to avoid that?
The most common mistake among beginners is failure to conduct adequate research. To determine whether there is a use case for the projects people invest in, they should research them. The number of crypto tokens created by 15-year-olds living with their parents’ may surprise you.
I have seen people above the beginner stage overuse leverage over the years. This is a major issue in the crypto market, which contributes to the market’s high volatility. As a result of my experience with leveraged trades, I have concluded that margin calls can be unpleasant, and it is best to leave it to the professionals.
Do you have a particular type of cryptocurrency that you are excited about? We’d love to hear why.
The whole ‘crypto insurance’ thing is really exciting to me. With recent events, crypto insurance should bring back some trust to the market. Plus, you can stake your policy and earn up to a 24% annual percentage yield (APY) on it.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. :-)
Every individual feels compelled to address a particular problem in this world. As individuals, we are limited in handling many problems at once. If I could solve poverty and end all wars, it would be a dream come true, but that is not what I am meant to do. This is not my calling.
My focus is on empowering individuals to become responsible for their own economic well-being, including that of their families and their communities. My goal is to empower people so that they can live better lives and create more value for others as a result of developing financial literacy. For me, helping the less fortunate is about providing them with financial services for the first time in their lives, and using those services to build wealth for themselves, their families and their communities. There are a number of benefits that will accrue to families, communities, countries and the world as a whole if individuals are empowered to take economic responsibility.
I received an email from a customer who I assisted in setting up Proof of Stake, informing me that the income they received from staking was contributing to their daily needs. They were earning $30 USD a week staking, which enabled them to provide for their families. This is the power of crypto, and this is my calling, which I pursue on a daily basis.
We are very blessed that very prominent leaders read this column. Is there a person in the world, or in the US with whom you would like to have a private breakfast or lunch, and why? He or she might just see this if we tag them. :-)
Having the opportunity to speak with Dr. Jonas Salk would be an honor. He created the Polio vaccine for the benefit of those in need and did not patent the idea. A person who chooses humanity over profit is rare in today’s world.
Thank you so much for these excellent stories and insights. We wish you continued success and good health!
Thank you for having me, and I wish you the same. Thank you so much!
