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30-01-2022

05:41

1/ # The retail/normal persons guide to investing in crypto. What is it and how can you make money? This thread is written for people who want some exposure to crypto, but don't have knowledge of it, or the desire or time to involve themself in it. (1/64)

2/ You likely know people into crypto who are always telling you to get into it. Telling you of tokens you should buy, what they are in, money they made. The first thing to do is: Don't BELIEVE to anything they tell you.

3/ Regardless of whether they are your friends or family, they probably don't know what they are doing and have been 'shilled'. Made to believe a story that a particular token is a good investment (which may or may not work out)

4/ If you follow them, theres a 90% chance you'll just end up buying something they were shilled by someone on twitter. If they've made money, its mostly luck or because they were in early on a 'ponzi'. For every 1 of them that makes money, theres 9 more who lose it all.

5/ In this thread I'm going to give you the basic minimum understanding you need to be able to invest in crypto, with the least possible risk, and involving the least amount of time investment.

6/ The biggest thing you must understand is that theres $BTC and then everything else. $BTC is a 'store of value', like gold. All these news stories you see of $BTC getting institutional adoption, its because of this interest in it as a store of value.

7/ If you want to buy some crypto and don't want to do anything, potentially leaving it 5-10years+ without thought, then you can stop reading here. All you need to is buy $BTC . There is a reasonable chance that over the long term (5-10 years) you'll get 5-10x+. Forget the rest.

8/ If you want to try get more and sooner, then continue reading. What about the rest. The rest is mostly what is known as alt-coins. Most of these are utility tokens. This is where most of the bullshit operates.

9/ Wheras $BTC is a store of value or just a kind of currency, these utility tokens are designed to have some kind of function. This could be a means of payment in some application i.e people use a movie streaming app and must pay in the crypto token to watch the movies,

10/ driving demand for the token off the market. Or, it could be a form of 'gas' or fuel like in $ETH @ethereum , used to pay for transactions that people do on the network such as sending funds or smart contract actions.

11/ Of these altcoins theres two distinct types you need to understand. The 1st is dApps: Most crypto projects are dApps. These are 'decentralised applications'. This is a project with a token doing something such as a game, defi protocol, nft trading app anything.

12/ These projects run on the 2nd type: Blockchain platforms. Examples of these are $ETH $AVAX $SOL $NEAR. You'll sometimes see these called L1's (Layer 1's). An example of the relationship between the two is that a project like $LINK 'runs' on ETH. Its token is a Ethereum based

13/ You could think of these platforms/L1's as kind of like different computer operating systems like Windows/MacOS, and the dApps that running on them as programs.

14/ What you need to know is that crypto is not really about tech, its a game of bullshit. People trying to get other people to buy things they've bought to make it go up, and projects trying to pump the price of their token so that they and their investors can sell their tokens.

15/ The underlying technology is known as blockchain. Blockchain is not the same as 'crypto'. Crypto is a form of blockchain but which has a tradable token as part of it.

16/ Microsoft/Google/IBM all build and sell blockchain software solutions ranging from applying blockchain to shipping, logistics, clinical trials for drugs, and none of it involves a tradable token. Most blockchain solutions don't need a token involved.

17/ Starting in around 2017 people discovered they could launch a crypto project promising to make some something in the above fields and get money from people on the internet, people like your friend, just by adding a 'crypto token' into their business idea.

18/ Unlike regular investors sources such as VCs, these people won't ask the right questions, aren't as knowledgeable, won't do their research, are easily 'shilled', have enough understanding of tech to think they are smart and 'understand all this stuff',

19/ but not the expertise to know good if something is actually 'good tech' or not. Not only that but with these investors, the company doesn't have to give up equity in the business and won't have their plans properly scrutinized as to whether its viable or not.

20/ All they have to do is distribute a crypto token they made from thin-air that has some 'promises' that it will one day be useful as part of some software they say they'll build.

21/ That in most cases a token isn't needed at all (and is present/built in/given some 'utility' in the software, as an excuse to get free money) is suppressed.

22/ Wheras in business you need to make a company, build it up, make it successful and THEN you 'make it'. With crypto you can reverse all that. You launch a company, make promises of a 'dream-case scenario of future company success', get all the money and 'make it' beforehand.

23/ Whether your software actually succeeds after that no longer matters, you already have the money. You just have to pretend to be making effort at the business to keep the investors believing so they don't come after you as a 'scammer'. If it all implodes, it doesn't matter.

24/ Its cash for nothing. Crypto is big because its a huge source of money for certain types of people (think wolf of wall street) who are good at making these companies and manipulating greedy fools into handing over their money.

25/ This has caused a huge industry of bullshit to develop preying on the internet generation.

26/ So is it all bullshit? Not quite. At its core there is a growing bubble of tokenized technology being adopted in certain sectors such as DeFi(decentralised finance), NFTs, Gaming. These contain areas where there is some good justified reasons why a token has a purpose in it.

27/ Surrounding this 'real stuff' is a far larger bubble of BS/Scams/schemes by scammers/people looking to cash in on crypto/projects that aren't what they seem/people shilling total junk/projects that won't be here in a month.

28/ The lines between the real stuff and BS is very difficult to distinguish from the POV of the crypto investor due to the level marketing and BS.

29/ This isn't the only problem. The other half of the issue in crypto is that the above 'junk' is bought early by 'influencers' and shillers, and all the 'promises' from the team are then shilled by these people.

30/ Enough people like your crypto friend see this 'shill' and buy in, causing the price to pump. At this point the early people sell making large sums. Maybe your friend sells too and comes out with a few x but the majority over the long term take a loss.

31/ This is most of crypto. Its a zero sum game where the majority hand over there money due to shilling, and the minority take it, all pushed and shilled by shady people and those with marketing/sales skills looking for junk to pump under the guise of a 'tech revolution'.

32/ On many projects that have survived a while this process takes the form of cycles of pumping and falling back.

33/ You will have surely seen the types of people who do this shilling stuff effectively. A guy who until 2018 probably worked at a callcentre, who is now a wealthy 'influencer' wearing a vest doing a youtube video walking along beach, talking about how $XYZ has great technology

34/ as if he has any idea what he's talking about despite 1. Never 'seeing' their tech 2. Has never worked a day in software or tech and is just repeating things he's read online from their whitepaper 'brochure' as facts.

35/ He convinces people like your friend to buy, causing a price increase and your friend probably then repeats the same 'facts' and shill to you when trying to get you to buy whatever he's in.

36/ Due to most of the investors of crypto being clueless about the tech, what goes up in most cases is not 'the best tech'. What goes up is what people in crypto (who are clueless) will believe is the best tech or what they believe will go up in price.

37/ Whole 'fanclubs' form around projects of investors who've been made to believe that a particular project is going to be huge. Brainwashed into believing it by the project and its shillers/community.

38/ It's a wild west of tech bullshit. There is some true value in it, but its very difficult to see it among the BS and delusion.

39/ So how do we in crypto make money? Most of the people who make money in crypto don't do so by understanding the tech, but do so by understanding the types of tokens that are likely to go up soon due to how well they can be shilled, buying in, riding it for as far as we think

40/ it will keep going up, then we sell and find something else. This is very time consuming. You have to spend a lot of time online following the latest developments and being ready to get into some new opportunity quickly, or get out quickly if things begin to go the wrong way

41/ So how can you get involved in crypto? If you don't have the time to put into crypto (and by this I mean many hours per week or even per day) you need to take a low risk approach.

42/ As I mentioned at the start, don't ever listen to your crypto friends. Even if they seem like they know what they are talking about, or even if they have a background in tech or a software developer (None of that matters in regard to price).

43/ You need to treat your crypto friends as if they are deluded. That they've been taken in by con-artists, fueled by their own greed.

44/ Of the two types of projects i mentioned earlier in this thread: Platform and dApps (The operating system, and the program that runs on it), you need to in most cases stay clear of dApps (especially defi protocols). Why? Because these come and go too fast.

45/ What is shilled this month, will possibly next month be dead with everyone having moved on. You may have experienced this yourself previously having gotten a 'tip' from your friend that he got you to buy and then 6 months later its dead and he's talking about something else

46/ To take a low risk approach you need to invest in the first type - platforms. These contain a lot of BS also, but are far less risky than the dApps but allow you to make good gains over time.

47/ Why is investing in platforms safer? Continuing the operating system analogy, it would be like investing in Microsoft instead of a particular piece of software such as a game, or office software.

48/ They are all running on the operating system so regardless of which piece of software is a successful, you win. Another analogy I often use is that of the automobile industry

49/ and instead of investing in a particular car manufacturer, investing in platforms is like investing in the road infrastructure. It doesn't matter which car 'wins', they are all driving on your road.

50/ Another reason is that just as how its far harder to make a successful operating system than it is just making a program that runs on one, it also takes magnitudes more effort/resources/time/difficult to build a blockchain platform than a dApp.

51/ A dApp which builds on a particular platform cannot easily change. This means as a platform gets more adoption, the more its likely going to be around a while.

52/ What you need to watch for is 'adoption'. This is dApps building on these platforms and using them. Theres many platforms that are shilled and try to claim or give the image they will get adoption in the future or are getting adoption.

53/ What you need to do is stick to the ones that actually are. You can research this info using the internet to see which ones are being built on using sources like Messari and electric capital:

54/ The safest platform to invest in is: $ETH . It is by far the most dominant and despite what you'll read about its flaws, as its upgraded this year and in the following years, its dominance will continue for a long time.

55/ I believe $ETH will flip $BTC in the coming 24 months to become the largest crypto currency by marketcap.

56/ Even though $ETH will likely be dominant, given the size of the market, theres other opportunities. Platforms far lower in MC but which can over time get you more gains (But with an increase in risk).

57/ Of these you will see $DOT $AVAX $SOL and lower mc ones such as those I invest in and shill like $NEAR and $ROSE . By investing in these types of projects you can have exposure to crypto with much lower risk then dApps while still gaining from the 'degeneracy' taking place.

58/ If I was in the position of someone who wanted to buy some crypto and just be able to leave it. I would buy 30% $BTC, 30% $ETH and then 40% of these other lower marketcap platforms.

59/ When you invest in crypto you need to do it with a sum you are prepared to lose. When you invest it, assume its gone. Crypto is very high risk.

61/ Do not use the project or twitter shillers as a source of info on whether the platform is being adopted. Treat investing in crypto like buying a car. The project and the shillers are salesman trying to get you to buy. They will always try to 'sell you' a dream-case scenario.

62/ Use independent data on adoption found via google such as that I mentioned. If the stats look good keep holding and be patient.

63/ Thats it. That may seem like a lot of text for something so straightforward but most of it is about understanding crypto in order to know what NOT to buy and to not get taken in by the bullshit.

64/ If you have any questions you can ask below and if you are interested in more involvement in crypto, i'd recommend reading my megathread:

65/ and if youre someone into crypto saying "but this contradicts youre other threads on strategy?!". Read the first tweet. This isnt for degenerates like you, its for regular people who just want some exposure to crypto and long term hodl


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