The cryptocurrency world is dangerous, and you and I are just leeks.
----Inscription
Today I sold all the bitcoins in my account. I invested 16,000 yuan, and sold them in less than a month, making a profit of 3,595 yuan, a return of 22.4%, and an annualized rate of 268%, which is a pretty good result (don’t criticize me, bigwigs in the cryptocurrency circle). The biggest feeling I got from this month’s investment experience is that ordinary people are not suitable for investing in virtual currencies.
The reason why ordinary people are not suitable for investing in virtual currencies is mainly based on the following three reasons:
1. The threshold for virtual currency investment is beyond the scope of ordinary people's cognition, far higher than any other investment category. First of all, I set a flag. I think virtual currency is not suitable for ordinary people to invest. It is not that I think virtual currency is bad, but that only qualified investors are suitable for investing in virtual currency. Virtual currency is rooted in blockchain technology, and few investors understand the operating mechanism of blockchain technology and virtual currency. Even the most core feature of blockchain: decentralization, is understood by very few people. I wrote a very simple article "Using blockchain to build a real P2P company" before, and sent it to the P2P practitioner exchange group. Many practitioners were puzzled. The most frequently mentioned questions they asked were: What is decentralization? How to achieve decentralization? At first, I was very surprised: P2P practitioners are the people closest to the blockchain era. If they don't understand decentralization, let alone ordinary investors? Decentralization is difficult to understand for people who are new to blockchain, because there is no case to learn from in our real world. It's like someone said ten years ago (2008) that he bought a watermelon online. It would certainly be difficult for ordinary people to understand. Aren’t watermelons grown in the fields or sold in supermarkets? Why can they be found on the Internet?
To understand virtual currency, you need to understand blockchain technology to some extent. Blockchain technology itself is a technology with a certain threshold. In addition, there are few reference materials available, and the media in the market are mixed and it is difficult to distinguish the true from the false. Ordinary investors have limited time, and they can really understand very few blockchain technologies. Although stock market investment has a certain threshold, after so many years of stock market education, when it comes to dividends, fixed increases, and net value, the grandpas and aunts who trade stocks can talk about it. But the consensus mechanism of blockchain, asymmetric encryption, UTXO... just a few concepts make ordinary investors dizzy.
Of course, you may say that ordinary investors don’t need to understand these terms at all. They can just buy and buy with their eyes closed. They can still make dozens of times a year and beat your annualized return of 268% in a few minutes. Well, this situation does exist. When P2P started, projects with an annualized return of 30% were invested in at will, and there was no need to study the background, strength, team and project situation. Later, there was a wave of running away, which educated investors. Now the currency circle is hot, and blind investment has also gained a lot. But the good times will not last long. I expect that the currency circle will enter a long period of lows after the two sessions. I really don’t want to see blockchain repeat the mistakes of P2P and ruin good technology. At present, 99% of ordinary investors in the currency circle have not studied the white paper of the investment project. They just follow the currency circle KOLs to invest after seeing a few tall foreign faces. Blockchain has become synonymous with issuing coins. If it continues like this, there will be a wave of "blockchain" running away sooner or later. The beneficiaries are the currency circle KOLs, and the losers are still the leeks investors.
2. The investment risk of virtual currency is too high, which is beyond the tolerance of ordinary people, so it is not suitable for ordinary investors. Virtual currency is traded 24 hours a day, 7 days a week, all year round. Old investors in the currency circle are not surprised by the daily fluctuation of 50%, but ordinary investors do not have such a big heart. At present (3MAR18), there are not many scammers in the currency circle, or the scammers have not yet exposed themselves as scammers. When the scammers can no longer play, then the investment project is not a problem of fluctuation, but a direct return to zero. Even if it is not a scam project, 90% of the real blockchain projects will fail. There are not so many ecological blockchain projects to be established, and there are not so many virtual currencies to be issued. Now there are hundreds of schools of thought. Investors can invest in blockchain Didi, blockchain Kuaidi, blockchain Easy Car, and blockchain Hornet, but there is only one company that laughs last. Professional institutions will make mistakes. For ordinary investors, can you guarantee that you will invest in blockchain Didi? If you intend to play the game of passing the parcel, rest assured that the last baton will definitely be taken by ordinary investors, either me or you.
3. From the perspective of the difficulty of investment operation, ordinary investors are not suitable for investing in virtual currency. It is too difficult. Not to mention the investment philosophy and investment risk, even if you are completely in the dark and go all in... Wait, how to go all in is a difficult problem. I bought the most conservative currency on Huobi.com--BTC Bitcoin, but how to buy coins is a tossing thing. After various registrations, certifications, card bindings, and various anti-human interfaces for 3 hours, I finally succeeded in buying coins. After a while, I felt something was wrong. Huobi.com is still a centralized exchange. The BTC Bitcoin I bought is not written to my Bitcoin address, and I don’t have the secret key. Huobi.com is like the early Alibaba, compared to third-party fund custody. But if Huobi is not the early Alibaba, but the early eBay, what about Paipai.com? In addition to the recent regulatory actions, the changes in Huobi WeChat account and a series of clues, I decided to withdraw the BTC from Huobi.com to my own Bitcoin address. Establish your own address in the Bitcoin blockchain? Oh my god, downloading the Bitcoin blockchain requires 65G, and it was decisively suspended after 1 hour of downloading. Later, I heard that online wallets can only download records related to their own transactions, greatly reducing the amount of downloads. So I downloaded and registered the Blockchain wallet. After all the trouble, I found a sad reality. The handling fee for writing Bitcoin addresses is not cheap. This little money is not worth it. I went back to Huobi.com and consulted customer service. I found that there is a selling function, so I sold BTC with a try-it attitude. Note that it was just a try, so I didn’t think much about it. I clicked to sell at the market price, and as a result, it was really sold! There was no second confirmation! Anti-human Huobi.com product manager, I promise not to beat you to death if you stand up. So, during the period, a series of thrilling processes occurred, such as selling to USDT, USDT to ETH, and ETH to coin issuance. Huobi.com, as the leading exchange in the industry, has such a difficult experience. For other new projects established in English, I don’t know how many bloody stories ordinary investors have tossed when they first purchased them. Therefore, even from the operational level, ordinary investors cannot hold it, so there are various proxy investments. With the emergence of proxy investments, greater risks also follow.
In summary, due to the high threshold of virtual currency cognition, high risk, and difficulty in operation, ordinary people are not suitable for cryptocurrency speculation. However, cryptocurrency speculation can really make money. Nowadays, beef sellers all speculate in cryptocurrencies, square dance aunties, and barbershop Tony teachers are all discussing cryptocurrency speculation. If you don’t participate, you will miss this wave of opportunities, which is really anxious! This is a typical leek mentality. I know that it is futile to warn everyone not to speculate in cryptocurrencies here. Few people can resist the temptation of huge profits. So what everyone needs to do is to keep paying attention to virtual currencies, and learn deeply, and strive to become a qualified investor who cuts other people’s leeks as soon as possible. Good luck!
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