Updated: Apr 28, 2022
(Click above to listen to this article. Video editing by Dinorah Delfin)
“Paper money is going away” – Elon Musk
The following are 4 important cryptocurrency and blockchain insights, for beginners, and not so beginners!
Observe Patterns & Trends Before Jumping In
You May Not Know How or Where to Research
Be aware of ‘Sophisticated’ Users
Redefining Brand Loyalty (and Scandals) in the Crypto Space
1. Observe Patterns & Trends Before Jumping In
We all know that history repeats itself.
That said, if you go into the cryptocurrency & blockchain space, don't think you're the exception for anything negative that could happen. This false thinking could stem from naiivety, willful arrogance, or stubbornness. You’ll be better off if you’re the naïve one. The last two habits, won’t serve you well with cryptocurrencies of any kind. Especially the highly volatile and experimental ones.
There’s usually a disconnect between what people say and do. This really comes down to: keen self-awareness and critical thinking.
Don’t take information without vetting it!
In R&D, researchers use study groups where sometimes they ask participants questions before they start a task, such as allowing them to verbally project how they think they'll perform. After having taken action, participants don’t realize their choice was influenced by the seemingly unrelated questions from the researchers. The cryptocurrency & blockchain space is no different.
Then, there’s outright lying and deceit regarding full disclosure of the truth.
Give the benefit of the doubt, but do your own research. If you are unsure of a situation and your money is being proposed to be put on the line, anyone who is genuine and trustworthy will give you the time to research. Tell people you'll take your time to get back to them. Don’t do business if you aren’t given the time to research. Making a fast return on investments is possible, but most financial speculations usually sound better than what they are.
The examples in the following financial sources illustrate how money is lost with Cryptocurrencies:
Example 1: Quadriga Loses $140 Million
Example 2: Cryptocurrency Scams
2. You May Not Know How or Where to Research
Most participants in the cryptocurrency and blockchain space, come from highly segmented markets, such as the FinTech (financial technologies) or computer programming fields. If you are not familiar with these areas you may not be able to understand cryptocurrencies and blockchains easily. Even those in this space, don't always know as much as they claim, or you may assume.
This is a complex and highly niched field.
At events, there's a high chance of you going over to a sponsored booth and finding a misinformed community manager when it comes to technical questions. This isn't about someone's level of intelligence, it's about how much research the person has done.
I recall a conversation with a founder in the crypto space who comes from the financial sector as a professional of five-plus years. He arrived at the hackathon to learn more about the technology side of this business. I told him that I personally believe that until one becomes a program developer, one can truly understand blockchain. It's like being a plumber who only knows what he's read without putting his hands on a pipe. The difference is a red-belt versus black-belt level knowledge. Even at this level, there are degrees of black belts.
If it is not in one's personality, left vs right brain for example, those in finance will probably not enjoy programming. The same goes for programmers, if the deep financial aspects of cryptocurrency and blockchain aren’t easy to grasp, you probably will not thrive in this space.
There is highly technical language and many people in the crypto space, including myself, are constantly learning a few know it all. Though, I'd argue it's more about - what side interests you more?
The financial, or the computer programming?
Decide on that and it may help your search. This will take time.
The examples in the following financial sources illustrate what cryptocurrencies are:
Example 2: What is Bitcoin – A guide for the confused
Example 3: Cryptocurrency Trading Simulator
3. Be aware of ‘Sophisticated’ Users
What is a sophisticated user?
Here is a definition from Legal Match: “A sophisticated user has the experience, training, professional skills, or legal duties such that he or she is expected to know about a product's potential adverse or hazardous effects.”
The best example of a sophisticated user is your personal physician whose, opinion you would trust, even if you got a second opinion.
In this category, it’s hard to peg crypto traders as naïve when they are part of certain scandals. When taking advice from someone with a few scandals on record, it may be good to give yourself an intuition check.
The following stories illustrate how “pleading innocence” is a common defense in the crypto world:
Example 1: Mt Gox CEO Mark Karpeles Claims Innocence
Example 3: Bitcoin Trader on U.S. Sanctions Blacklist
4. Redefining Brand Loyalty in the Crypto Space
Brand loyalty is highly correlative to market capitalizations, how bullish or bearish the market is, and also, to the latest scandal.
Remember Howard Stern before America's Got Talent? That’s what Bitcoin is. If we want to conjure up a stereotype most mainstream folks have, it’s the seedy old man who isn’t afraid to shock jock and hang around similar folks. Except now, our boy Howard gets to judge others, and hug them. I’m using this analogy for cryptocurrency as a whole.
The technology has no say in how it’s used. Just like Google was first known as the best search engine for pornography when it came out, this technology also appeals to certain folks in a high-risk illegal industry.
In the cryptocurrency space, we have people trying to undergo a rebranding similar to Howard Stern's. If they are genuine about cleaning their name, they’ll do it. The true test, however, at least in the crypto space, always goes back to our opening recommendation: Observe Patterns & Trends Before Jumping In.
The examples in the following financial sources illustrate how scandals in the blockchain space affect cryptocurrencies:
Example 2: World Crypto-Cons
A Question For IM Readers:
What do you think about blockchain technologies?
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ABOUT THE AUTHOR
Nicole Villa is a blockchain and cryptocurrency enthusiast with software developer expertise. Her specialties include front-end engineering and web design. Nicole believes in making tech education more accessible. Combining this passion with an entrepreneurial spirit, she’s founded Arrow Theory, the only engineer-owned and themed coffee shop in Texas.
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