Tim Draper, bitcoin millionaire and venture capitalist, does not doubt that cryptocurrencies are the money of the future: “In five years, if you try to use fiat currency they will laugh at you. Bitcoin and other cryptocurrencies will be so relevant… there will be no reason to have the fiat currencies.”
Five years seems like an awfully short time for the world to go from crypto-virgin to crypto-only, but those at the forefront of the new revolution might know more than we do. If that’s the case, jumping aboard the crypto investment ship is turning to be a now-or-never type of affair.
If you spend a lot of time daydreaming about becoming rich or famously rich (or both), we’re bringing the most valuable asset that can help you achieve that — knowledge. Here are the lessons from self-made crypto millionaires that will inspire your success.
Tell me a good bitcoin-millionaire story
Where do we start?
Maybe from a 12-year-old kid who hated going to school so much he made a bet with his parents — if he becomes a millionaire before turning 18, they won’t force him to go to college. Today, at the age of 18, Erik Finman owns 403 bitcoins, which at the current $8,233, puts his bitcoin value at $3.3 million. He also has some smaller investments in ether and litecoin. Officially a school dropout, Erik now manages his and his family’s bitcoin investments, lives in Silicon Valley and keeps himself busy with all kinds of projects that have nothing to do with school.
Jeremy Gardner is another self-made millionaire that has built himself a reputation of a visionary investor and placed himself at the heart of the crypto community. “By dedicating my life to crypto assets and blockchain technology, I’ve made more money than I would have ever expected to make in my entire life — by a long shot,” he said to Business Insider. He bought his first coins in 2013, following the controversy around Silk Road, a “dark internet” marketplace that facilitated buying and selling of drugs and speculation. Soon after that he threw all of his savings and stock holdings into crypto investment and became a true bitcoin evangelist. In 2013, Jeremy launched a blockchain-based market forecasting tool called Augur, that raised $5.3 million in an ICO in 2015.
Yet another bitcoin millionaire comes from Johannesburg, South Africa. With a knack for business and a natural entrepreneurial mindset, Mpho Dagada (23) was naturally drawn to crypto investments after first coming across it in 2013. While at university, Mpho started a cleaning and laundry business and invested all of his profits in bitcoin. He now owns a chain of fast food restaurants and a logistics company.
How do you know which coins will succeed?
You don’t, that’s the catch. Trying to pick winners can be a bit like chasing a rabbit down the hole. No one can confidently say they know which coins will succeed. Some crypto analysts and enthusiasts, who follow the industry news very closely and are truly immersed in crypto investing, are often able to identify the most promising coins, but even they can’t say for sure that the investments will (and let alone, when) yield substantial returns.
One strategy that has been shown to have potential is letting the winners find you rather than the other way around. This Millionth of Supply Passive Indexing strategy shared on Steemit uses a spreadsheet that feeds off Coinmarketcap’s API and lists the top coins by market cap and daily trading volume. Closely following the swings of the market allows you to spot the coins favoured by other investors and get into the game early, while there’s still plenty of room to make decent profits.
More often than not, determining the future success of crypto coins before they hit the big jackpot is a matter of serious due diligence and a pinch of luck. Don’t rely on any one strategy to guide you to success. Rather, gather and map out the information available to you, use the community insights and the general buzz behind the scenes to pick out the right ICOs for your investment.
Hold onto your coins, silly
Do you remember the story about Kristoffer Koch from Norway, who bought 5,000 bitcoins in 2009 and completely forgot about them until the bitcoin hit the media headlines again in 2013? He ended up with a pot of bitcoins worth (at the time of discovery) around $886,000. If you don’t know the story, the moral is simple — invest in the most promising coins and forget about it. Although it’s true that Koch wasn’t able to resist the temptation to reap the returns, as he exchanged “one fifth of his 5,000 bitcoins, generating enough kroner to buy an apartment in Toyen, one of the Norwegian capital’s wealthier areas.”
The first rule of any investment is to buy and hold. You’ve already done extensive research that led you to the investment decision, now sit tight and wait for the rewards. If you’re struggling to see the argument, just think about bitcoin. Since 2016, the value of bitcoin has soared eightfold, despite numerous predictions from sceptics that it’s going to flop. Many investors who held onto their coins until now can proudly call themselves self-made millionaires, and those who sold or exchanged early are probably mellowing in regret.
Resisting the urge to cash in your coins when their value shoots up is incredibly difficult because there’s always a risk of the value decreasing just as fast. But it’s been proven time and time again that investment is a long-haul game. Obviously, take some profits to enjoy your success, but try to hold onto the majority of your coins to make sure you don’t lose out in the future.
Keep your coins safe
Why undo all your hard work and smart investments by ignoring the safety advice? It cannot be stressed enough how important it is to keep your coins safe. And here’s how you can do it.
First of all, don’t keep your coins in a hot wallet. The general advice is to transfer most of your crypto assets to a wallet that you control, and best of all, to a hardware wallet. The main difference between a hot crypto wallet and a cold wallet is that the first one is connected to the internet, whereas the latter one is not. Hackers can’t steal your cryptocurrencies from a wallet that is not connected to the internet.
Most people who invest in cryptocurrencies have both hot and cold wallets but use them for different purposes. Think about the hot wallet as your current bank account and the cold wallet as your savings. You should only keep as many coins in your hot wallet as you need to make daily purchases, all the rest should sit securely in a cold wallet.
Another basic thing to remember is to keep your private key hidden. Just don’t forget where you hide it, because losing your private key also means losing all the assets that are inside your wallet. One of the crypto millionaires has shared his success story with the Reddit community, revealing one of the silliest security mistakes he’d made since he started trading: “I once got ‘hacked’ and lost 5,000 ETH and 10,000 LTC by having an image of my ETH and LCT wallets on my desktop as a PNG file. I must have had a remote thing and they got everything.”
The more substantial are your crypto assets, the more likely it is someone will try to steal them from you. Don’t make it easy for hackers to get away with your coins.
What Are Some Of The Most Promising ICOs At The Moment?
Remember, never invest in a cryptocurrency just because someone said it’s going to appreciate. Doing your own research is vital. Cryptocurrencies are volatile, so you want to make sure your investment is driven by thorough research, not a hunch. With that said, here are a few coins that we think are worth checking.
As the FileCoin’s record-breaking ICO that raised $257 million in minutes has demonstrated, crypto enthusiasts truly believe in the idea of decentralized storage. Siacon already has a working product and a network of users. It promises to drastically cut cloud storage costs as well as gives users a chance to sell their storage space on the Sia blockchain marketplace. However, as it is obvious now, Sia is not the only player on the market. While we predict that the price of Siacoin will increase, no one knows which company (or companies) will succeed in the end.
OmiseGo is a promising product. It essentially offers Stripe-like features, enabling real-time value exchange and payment services across jurisdictions and both fiat money and decentralized currencies. They have a great team and a clear direction, and their token holders will make money by way of transaction fees. This means that as the transaction volume increases, token holders will earn more, which indicates the price of the coin should go up.