If you want to better understand all the recent hype about cryptocurrency and blockchain, here are a few key things you need to know. In the interest of full disclosure, I am an active, long-term cryptocurrency investor, I recently agreed to start taking payment in certain cryptocurrencies for my consulting and creative work, and I’ve been researching cryptocurrency and blockchain for nearly two years.
Also, I offer NO INVESTMENT ADVICE because I’m not an investment advisor. I used to be, but that was well over a decade ago and I sold my investment advisory and financial planning business to UBS in 2000. But that’s a different story. Today, I’m a small business owner, angel investor, stock market investor, and a strategic advisor to business owners and emerging company CEO’s.
Another Tulip-mania?
Even though I wasn’t around during the Dutch Golden Age (17th century) to be part of the Tulip-mania that took the world by storm back then, I first learned about the tulip craze and irrational exuberance during Economics 101, while in college. (I majored in Economics and International Business because my dad told me to, really. Good call, dad.)
However, education may not be all it’s cracked up to be, especially when it comes to economics. Knowing anything about economics qualifies me to have made my fair share of speculative, foolish investments. Just ask my wife. (Being too smart can be hazardous to wealth creation and preservation.)
The good news is I’ve learned a few things about investing and finance over the last 30-plus years building small businesses, saving, investing, teaching, writing and learning. I still have much to learn which is why I study finance and investments daily, and write about it.
My Opinions
I had lunch yesterday with a Michael Noel who shares similar business interests and backgrounds in business development, capital markets, start ups, and now, blockchain. Mike is taking a leadership role in the Phoenix area by launching his consulting business Blockchain Consultants. We agree that this is an exciting time to be on the front line working with developers and start up disruptors throughout the Southwest who “get it.” There will continue to be massive, new opportunities for consulting, capital formation and disruptive, solution0-driven change in industries as diverse as online poker to energy and Fintech.
I don’t believe the cryptocurrencies I own are like tulips. (My wife does and we vary often in opinion on finances which is one reason we’ve been a great team for several decades. Opinions are personal, never fact, so develop your own opinions based on your research.) I consider my crypto assets longer-term holdings and an opportunity to “learn and teach by doing it.”
I don’t believe blockchain is a fad any more than the telephone, internet or email was when we first started reading and hearing about these disruptive technologies. Heck, some people back then speculated these technologies might ruin us. We see this today when the media reports that social media may be destroying humanity. I think not.
What is apparent to me is blockchain and the strategic byproduct of cryptocurrency is the next wave of seriously-disruptive entrepreneurs and innovators finding ways to solve massive business, government and societal problems that risk taking us all out of the game. And they’ll do it using computer code on distributed networks.
Let’s face it. We have some serious issues to face as a global population. If you get to work like I do, you work with amazingly talented people, virtually, who collaborate from all corners of a round world, and make s$&t happen. You see opportunities abound. And you work hard to build something that is yours while seeking to make a difference by helping others. You might even be a disruptor.
Do I have all the answers? No way. I’m just a guy who’s blogging his opinion and experience. If you ignore the mainstream media and get into the trenches with the investors, developers, innovators and risk takers I get to hang around all day, you’d have a better sense for how MASSIVE blockchain will be as disruptor.
Want to get rid of fraud in online poker? Done. How about come up with your own disruptive idea and launch the next Initial Coin Offering (ICO), taking the millions you raise from ICO investors who believe in YOU and your business model, and maybe you put air taxis out of business.
The Macro View here is this: Find problems. Create solutions. Commit to the process. Serve others.
Sound too good to be true? I guess it depends on your mindset. I’m simply a fervent student who’s willing to share my beliefs in blockchain, and what I know about entrepreneurship, capital markets, investments, etc.
What You Need To Know – Start Here
Here are the three things you need to know about crypto and blockchain. Keep in mind, some of this may seem very basic to early adopters. My points are intended as a primer for you. Most of us are just beginning to understand the new language emerging around all of this, and it’s going to take years before the mainstream gets on blockchain bus in any, significant way.
- There are investors and speculators in everything. You get to choose your approach to investing in anything, including cryptocurrency. Investors tend to take a long-view, typically more fundamental. Speculators take a short-term view, analyze technical movements, and make trades often to capitalize on intra-day price volatility. Choose your position wisely.
- Cryptocurrency is NOT a Ponzi scheme. It is true that there have been and always will be Ponzi schemers who try to steal your money. But the fundamental and underlying technological advancements that are taking place in blockchain are game-changing for humanity because of the significance tied to DECENTRALIZATION. For example, our Central Bank likes to control our money supply and is completely independent of government control. Millions of people believe the central banks could lead the way to the next, global, financial apocalypse. Just look at the trends with global interest rates, money supplies, global currencies, oil, etc. Ponzi schemes show up across the board which is why it is so with Crypto. This is why doing your research, being a dedicated student, and staying on top of your holdings is essential to success. Distributed databases can be a powerful solution to combat the consequences of excessive centralization and authoritative control.
- Watch for serious momentum and innovation. This means that even though you can buy and sell almost any currency, the currencies are the sideshow to what’s really going on; software developers, innovators, capitalists, disruptive, creative, outlying misfits seeking to change the world. What I mean by this is the entire intention for all disruptors is to simplify operations, streamline workflows, reduce transaction costs, etc. In the end, the innovators who “get it right” make a fat profit while solving big problems. This is a good thing if you embrace change.
Learn, Adapt & Grow
It’s up to you to form your own opinions about blockchain, distributed data, the power of decentralization, Smart Contracts, ICO’s, and the soon-to-be cryptocurrencies that will be created, sold, mined, bought, held, traded and sold over the decades ahead.
If you believe that your glass is half full, you’re like me. If you’re more skeptical, hopefully you don’t share the opinion that all of this is “just a Ponzi scheme.” Dig deeper. Learn about the business use cases that are emerging. Set a new, Google Alert for keywords around this. Dedicate time as often as you’re willing to read, study, learn.
Maybe you take a further leap of faith and directly invest in any of the more widely-traded cryptocurrencies, or coins. Again, decide what kind of crypto investor you intend to be BEFORE you start opening your Coinbase or GDAX account.
And if you should take this leap of faith, be prepared to LOSE 100% of your money for any number of reasons like fraud, you lose your cold storage key, your account gets hacked, or your better half wakes up one day and tells you it’s over. There is RISK in the oxygen you breath right now, so yes, there is also RISK in every investment including burying your money in a hole and forgetting about the high cost of inflation, silly.
Be smart! Choose wisely. And know this … if you read three books on any subject you are immediately in the top 3% of humans on all Earth because most people suck at reading. Leaders are readers for a reason!
Sign Up for My Email Updates on Crypto, Etc.
There is much more I’d like to write and tell you now, but I’ll defer to future posts I add as I continue to learn and grow in my own knowledge. For now I encourage you to read and study everything you can about cryptocurrency and blockchain.
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P.S. Here are a two more suggestions you may find useful. Read about the man presumed to be the founder of Bitcoin, Satoshi Nakamoto here. Check out of the top-rated books on Amazon.
