> As someone who lost 8 figures in crypto in 2017 ...
You could afford to lose 10+ million without your life being detrimentally impacted (at least I would assume, based on how calm you are about it). Most people can't. Most people can't imagine that amount of money.
I'm not a crypto fan. While the technology is interesting and has some intriguing use cases, it feels like all the big coins far away from actually becoming a legitimate currency, and most of the optimistic posts I read miss that.
Crypto is not stable. I think that's why so much money is flying into it. If the price of bread or milk goes up 10%, people get scared. In crypto, going up or down 10% is called "Wednesday". I'm aware of stablecoins, but the biggest ones (Tether, etc) all seem to A: be centralized, and B: be run by shady groups with whispers they could disappear at any moment. A breaks the promise that crypto is supposed to provide, and B only provides stability at a glance, until the whole house of cards tumbles apart (as it has).
The bigger problem is that crypto is unforgiving. OP's story is all about this. Sure, that's fine for techies who can afford mistakes, and banks or other who might have extreme security procedures, but Mom and Pop on a farm in Iowa are neither of those. When they get a phone call from the "IRS", they are happy to go buy Walmart gift cards and read off the codes, or set up a money transfer. Sometimes that money can be reclaimed, sometimes it can't. With crypto, there is no chance. The financial institutions that exist now are certainly rigged towards the bigger players, but Mom and Pop have a (slim) shot of seeing the money again.
Crypto is a fine gamble for those who can afford it, but I honestly doubt it will ever be an every day currency, because I can't see any concerted effort focused on solving those two problems. People can't afford to not know what everything costs at the grocery store, or that they could lose their entire savings by making a mistake when buying a Christmas gift. I don't think it's a great store of value either long term, because at least traditional stores of value (land, precious metals, commodities, etc) have uses to the entire population - blockchains provide no value to 73 year old grandma.
I appreciate your thoughts and, perhaps to your surprise, entirely agree.
I'm calm about it now because I've had years to reflect and learn. I began in 2013 buying small sums of bitcoin around ~$50. I amassed ~$500k by 2017, the most I had ever seen in my life, and throughout the year I made some profitable trades on btc-e.com. I had a competitive advantage on that platform because my orders would be filled prior to the blocks those transactions would be in. btc-e was seized by US authorities in July, but much of their funds were already gone.
This was entirely my failure. What did I learn?
* diversify crypto holdings (such as OP's hot and cold wallets)
* diversify outside of crypto
* use regulated platforms (traditionally these are banks)
* understand fundamentals (I was so painfully naive)
* help others avoid these pitfalls (if I had a single friend I trusted to disclose my holdings, I'd almost certainly have made better choices)
I just responded to another comment below, which you might find helpful https://qht.co/item?id=28910361. The foundational elements a blockchain provides - namely transparency and ownership of digital assets - are absolutely critical to our future as a society.
Crypto in its current forms is mostly noise, but there are also really pivotal things being build by people I choose to trust far more than the World Economic Forum.
> The foundational elements a blockchain provides - namely transparency and ownership of digital assets - are absolutely critical to our future as a society.
I'm not 100% sold, but I'm leaning that way, hence my phrasing of "While the technology is interesting and has some intriguing use cases".
I feel like the "good" use cases aren't particularly sexy however, and thus are in danger of getting lost. Additionally, there's a ton of people that want to throw "the blockchain" at a problem, and end up overcomplicating spaces that have no need for it.
We feel similar. Real progress isn't glamorous, and for years there's been unnecessary hype around the buzzwords. SEO and attention economies have cultivated these behavioral trends because it's profitable.
My first question for any blockchain-related project is, why do you need a blockchain? Most struggle to answer.
What's clear, from my perspective, is that humanity has an abundance of passion that's being funneled into profits. I firmly believe there will be operators in the coming years that will offer a strikingly unique set of value propositions that cannot be contested by the current majority controllers.
You could afford to lose 10+ million without your life being detrimentally impacted (at least I would assume, based on how calm you are about it). Most people can't. Most people can't imagine that amount of money.
I'm not a crypto fan. While the technology is interesting and has some intriguing use cases, it feels like all the big coins far away from actually becoming a legitimate currency, and most of the optimistic posts I read miss that.
Crypto is not stable. I think that's why so much money is flying into it. If the price of bread or milk goes up 10%, people get scared. In crypto, going up or down 10% is called "Wednesday". I'm aware of stablecoins, but the biggest ones (Tether, etc) all seem to A: be centralized, and B: be run by shady groups with whispers they could disappear at any moment. A breaks the promise that crypto is supposed to provide, and B only provides stability at a glance, until the whole house of cards tumbles apart (as it has).
The bigger problem is that crypto is unforgiving. OP's story is all about this. Sure, that's fine for techies who can afford mistakes, and banks or other who might have extreme security procedures, but Mom and Pop on a farm in Iowa are neither of those. When they get a phone call from the "IRS", they are happy to go buy Walmart gift cards and read off the codes, or set up a money transfer. Sometimes that money can be reclaimed, sometimes it can't. With crypto, there is no chance. The financial institutions that exist now are certainly rigged towards the bigger players, but Mom and Pop have a (slim) shot of seeing the money again.
Crypto is a fine gamble for those who can afford it, but I honestly doubt it will ever be an every day currency, because I can't see any concerted effort focused on solving those two problems. People can't afford to not know what everything costs at the grocery store, or that they could lose their entire savings by making a mistake when buying a Christmas gift. I don't think it's a great store of value either long term, because at least traditional stores of value (land, precious metals, commodities, etc) have uses to the entire population - blockchains provide no value to 73 year old grandma.