As the cryptocurrency market/ecosystem is basically on the verge of despair, I would like to document to myself and share with others the lessons that I have learned along the way.
I was an early investor in the space and at some point was in a very heavy upside.
I felt elated and top of the world. Make 5-10x returns without doing anything felt exhilarating, like winning the lottery.
Just seeing the profits on paper made me feel like I actually cashed out.
Funny enough, I felt a certain greed come on, I wasn’t satisfied, I didn’t sell, I was sure that this would keep going.
Then I began trading.
Then I began investing in cloud mining.
Then I began investing in scammier things.
All huge mistakes and here are some key lessons I learned.
#1: Trading is extremely hard
Nothing in life is easy and when you are trading you are basically playing a card game against smarter and more experienced people.
Often against smart bots written by smart people.
Unless you commit full time to this, spend many hours learning technical analysis and spend the rest of your time doing fundamental analysis, YOU WILL FAIL.
You are better of just buying and holding than trading.
#2: Cloud Mining
The economics of mining at the time were already at a point that was barely profitable.
Someone that removed your headache of mining was obviously going to reduce the margins significantly.
To the point of simply taking your money.
#3: Altcoins & Actual Value
There were so many coins/tokens that were literally scams.
Some were intended as scams, otheres were scams unintentionally.
It was madness to even touch them.
The whole concept of avoiding baseless FIAT currency and trying to build a new monetary system on something even far more baseless was just hilarious.
Note: I still think BTC has a place in the future of our world, but definitely not the thousands of shitcoins out there.
#4: Free cheese = mouse trap
A much deeper understanding that I had acquired was that the very idea of making money without any real merit is just not right.
Its not sustainable, and it won’t make you happy.
Its kind of like becoming a UFC champion without going through the ranks.
You will get hurt very soon.
Its like getting a cheat code to get to the hardest level in the game without acquiring the skills to be there.
You will get wiped out.
Just like winning a lottery is not the path to actual success, its just luck which will inflate your ego, diminish your capacity for hard work and ultimately make true success less likely.
I learned that I was susceptible to greed.
I learned that I was susceptible to an irrational herd mentality, DESPITE exposing and educating myself on the possible risks and alternative view points.
I got an idea of how markets work, I got to see a bubble from within it, I experienced being straight up scammed and losing a LOT of ‘money’.
This failure has taught me a lot and hopefully it will help me in life and much like a vaccination save me from similar mistakes when the stakes are higher.
As for the fundamentals of crypto and my thoughts on that, I will write a seperate post on that.