Original author: Matti, Zee Prime Capital
Original translation: chiny
Receiving a lot of positive responses to my old article “A Simple and Short Guide for Newbies to Crypto” got me thinking about how I could provide more useful tips for newcomers to the crypto community. I think new people are important, especially to survive the chaos.
Cryptocurrencies attract extraordinary minds, yet there are those who use these to play zero-sum games, and then there are those who decide to build and play the positive-sum games that come from innovation.
This is sometimes confused with imitation. In a sense, imitation is where creativity dies. The other side also plays an important role – imitation is how an innovation (idea, asset, etc.) moves its way forward. Throughout the crypto cycle, it has become increasingly difficult to distinguish between the two.
I don't view the following as tips or advice, but as interesting perspectives to adopt as guiding principles. These are the lessons I learned. They are labeled as truth because they are part of a recurring pattern that transcends crypto.
The following is not in order of importance because different truths have different importance to different people.
Truth 1: People fall for individual investors who play the zero-sum game and profit from imitation time and time again
This is nothing new, nor is it unique to cryptocurrencies. One can learn a lot by studying the anatomy of financial bubbles from a Girardian perspective, and even more so by practicing it. This won't help you escape the top, but it will make you more aware throughout the cycle.
"Every bubble starts with something real, which inspires too many fakes. It started with Leonardo da Vinci but was led by Peter Paul Biros because while genius is rare, the needs of the gullible will always be Satisfied by a healthy supply of fraud.”
Sometimes it can be difficult to distinguish between what you want to believe and what you really believe. So it's a good exercise to ask yourself from time to time: "Do I hope this is true, or do I really believe this is true?"
Truth 2: It’s not easy
Zee Prime Capital was conceived in late 2018, during the most pessimistic period of the previous cycle. It’s not easy to have high levels of belief, nor is it easy to believe that a team can create something new.
We have never bought the bottom or escaped the top, nor have we indulged in it. We're looking for people with interesting ideas. At the end of the day, in the spirit of “Britain still owns rail, even though the rails caused the UK financial bubble”, we can conclude that DeFi and NFTs have paved the way for a new cycle of innovation (and imitation).
It's almost impossible to differentiate between crazy and real thoughts because sometimes the barrier is too thin and susceptible to reflexivity. So, it's a numbers game, and that's where VC-type portfolio diversification makes sense.
Truth 3: Some things may not survive
If you think something is inevitable, you won't work hard to achieve it. If too many people get complacent – no one will survive. Don't take it as a given. Criticize, scrutinize, and embrace those who are working to build new and complex things.
Throughout 2022, I hear people say they are less worried about crypto than they were in 2018, and I share the same concerns. Treating the future as certain certainly makes us complacent, and the imagined future may never arrive.
Our industry can only continue to thrive if we continue to reinvent ourselves. Furthermore – we need to provide better solutions, which is definitely not simple. No more low-hanging fruit. Casinos alone won’t do it.
Truth 4: Buying on the dip will make you regret it
Especially when you also hear bums and tiktokers talking about buying the bottom, the bottom can keep falling and falling. But that's not the point. The point is that impulse buying is rarely a good idea if you have a reason why you should buy something other than what the crowd says.
This stands on its own, but stems from another hard truth:
Truth 5: The wisdom of crowds will get you nowhere
True wisdom is found in solitude away from the screaming crowds. The ability to think on your feet is a rare commodity. Beyond that, it's nearly impossible to think clearly during bipolar disorder or depression. You'll find few opportunities to listen to the masses (or decipher the mystics' footsteps).
Own your idea, refine it, test it, polish it. Bet on and test their ideas, see others join the party, and try to determine when a conversation you once had with a handful of people in a small room becomes a hysterical debate on Twitter.
Then it's a counterintuitive skepticism that leads you back to your armchair to rethink these ideas. If you don't have an armchair, a table will certainly work.
Truth 6: Most of what you do, read, or interact with is useless
Much of your time and energy is wasted, but there are certain things you do that can take you to a whole new level and embrace asymmetry.
Human creativity has the nature of non-linear output, and you may not even see that you are on an exponential path. You just need to have a good idea, build a great product or invest in a great thing – that’s all you need.
Truth 7: Trying too hard rarely succeeds
"Wtf Matti? You just told me not to get complacent and now you're telling me not to try?"
What I mean is – don’t force it. Pure intentions are never based on trying too hard or going against who you are. If you are not here to scam, then the only way to make money in crypto is to love the game, because only then will you be able to stick with it when most people think it is a fool's game.