Thoughts on Crypto

In May 2021 I started a new note about Crypto. I didn’t want to forget things I learned, things I like, and things that didn’t make sense. This note doesn’t help anyone just sitting on my desktop, so let me share some quick thought on crypto from the past several months of being active in the space.

A quick shout out to the peeople that helped me dive in and learn about crypto in 2021. Most of you know who you are, and there is no way I would be this active in crypto without their help.

I will also preface all this with, these are my own opinions and thoughts. They should not be taken as finacial or legal advice.

24 Hour Trading

This is prehaps the biggest advantage I have found and what I like the most about crypto. It’s going on 24 hours a day, 7 days a week.

My life (or anyone’s) is not contained to Monday - Friday, 9:00 AM - 5:00 PM. Coming from traidtional banking and investing in stocks this is amazing.

Need to transfer money at 8:00 AM on a Sunday? You can have the transfer done in 10 minutes with Crypto. With my bank, I can submit the transfer and hope it clears on Monday (sometimes taking up to 3 days).

Have some extra cash you want to invest? With stocks, I have to add a reminder to my phone and remeber to buy the stock when the market is open. With crypto, I can buy whenever. There are no trading hours with crypto (which also means no pre-market and after-market trading). When I see a crypto hit a certain price, I can buy immediately.

Some argue that this is information overload. With the crypto market being open 24/7, you need to stay on top of everything 24/7. With stocks you only need to be active from 9-5.

I don’t know a single person that invests in the stock market actively that is only active from 9-5. Just becuase you can only trade 9-5 doesn’t mean the information only comes out 9-5. The internet gives us access to invormation to 24/7. Crypto just lets us act on it 24/7 as well.

All the Apps

When I first got into Crypto, I thought it would be similar to stock investing. I would create a Crypto Account (like my brokerage account) and I would be all set. This is possible, but not the best situation.

There is no one app or exchange to rule them all. There are many options and all are different. Some offer different fee strucutres. Some offer different coin options. Some offer staking. Some offer interest. It’s all over the place.

There is so much going on with Crypto (and it’s becoming a word to encompass everything) that one app can’t possibly do everything. I also don’t recommend keeping all of you investments on a single exchange (not your keys, not your coins).

At last count I use 5 different apps to help manage my Crypto.

Learn the Language

I’m not going to write up an entire glossery here, but crypto has it’s own language, and it’s own meaning for words you might know.

I follow along with a lot of crypto discussions and Twitter, and I reguarly have to look up words or acronyms to make sure I understand what’s going on.

It seems like the vocabulary is growing every week. Don’t be embarrased if you need to look stuff up or ask people to explain.

Volitility

Volatility to part of the game. Big swings up and down. Make sure you zoom out and look for long term trends. Short term can be maddening with Crypto.

And it’s not just the coin value either. Gas prices fluctuate a lot which effects interactions with the blockchain (buying, transfering, minting, etc.)

Have a long term mind set when using crypto as an investment vehicle. I try to make as few movements as possible.

Transfer Axiety

I still get axiety everytime I send crypto. Is the address correct? Was it on the right chain? Did the person receive it?

If you’ve ever sent crypto using a popular app, you’ve seen the big warning messages that pop up when you transfer crypto. If you send the crypto to the wrong address, it’s lost forever. There is no calling it back.

Whenever I am sending or recieving crypto from another person I have a message thread going with them confirming when the crypto was sent and when it was recieved.

It doesn’t matter if I’m sending $10 or $10,000 I am nervously staring at my screen until I confirm the transfer went through.

There are a few projects (probably more I don’t know about) trying to help fix this problem. Many are making wallet addresses more user friendly and readable. Many apps have somekind of contacts feature built in to help with wallets you reguarly intereact with.

Until moving crypto becomes as common place as using my debit card, I’ll still be anxious when moving it around.

Bankless

The concept of being bankless or not relying on a bank seemed impossible over the past 20 years. Bankless in 1999 meant you kept all you money in a safe (under your mattress?) and paid cash for everything. Possible, but not very practical in 1999. Impossible in 2022.

Crypto looks to be the first plausible option to be bankless or be your own bank. You can store large sums of money in code that sits on a thumb drive, hardware wallet, or laptop. This is similar to 1999 and keeping everything in a safe. The big difference comes in moving/spending the money. Crypto can be moved and used without a bank.

At this point, I can’t imagine ever being completely bankless, but it is a concept I’m looking at more and more. And something I would have never thought about without Crypto.

Putting Crypto to Work

Crypto is opening up a new world of finance. Although much of the newness is a fresh coat of paint on old ideas.

If you are holding crypto as an investment (HODL), you should be putting this crypto to work. The old saying, “don’t work for your money, have your money work for you.”

You can make anywhere from 0.15% to 120% returns on some crypto. Obviously the higher the return, often the higher the risk associated. So I am not saying throw all your crypto in a high risk high reward situation, but have some crypto earning more.

There are man ways to earn more with crypto. There is staking, lending services, DeFi, and just about any other fincial mechanism you can think up.

I personally have some crpto in staking pools, some crypto with a lending services, and some in plain USDC collecting interest. All options creating more value and crypto then I would have on my own.

For the right crypto, it’s like having a growth stock that pays a dividend.

Crypto Does Not Equal Cryptography

This was a pretty popular topic of conversation when I first followed crypto. This might have more to do with where I was coming from. I was doing a lot of work in cybersecurity and this was driving people crazy in that industry.

The word crypto meant different things to different industries. Cryptocurrencies won out though. I can confindently say that if your are saying crypto, you are talking about cryptocurrencies now.

This post has turned into a bit more than some quick thoughts. If this was helpful or you have any questions, please let me know. To comment on or ask, join the discussion page or message me on twitter.

One last thing… I have launched a new Discord community around investing called Credo. Credo Membership is free. Click here to learn more and join.