Cryptonomics - Five Lessons Learned for Noobs in the Cryptocurrency World

My first trades came when I began listening to podcasts describing the Ethereum platform back in November of 2015.

I had purchased some Bitcoin prior to this in June when it was around $200(!) and began to expand my research into the rest of the cryptosphere.

That was when I stumbled on Ethereum and began to recognize the writing on the wall of what could be.

Given that my imagination runs faster than my abilities to actually build, code, or simply remember the idea I had before the one I just had, you can imagine the rate at which my mind was swirling around the realm of the possible.

Naturally, the next step was to get in on this game. Poloniex was my first stop, since it was the first altcoin-centric crypto exchanges I had heard of. After a simple account creation process, I transferred (very carefully mind you, since this transaction process was rather terrifying at first) a few of my bitcoins into my Poloniex wallet and began watching the Ethereum charts to find a good entry point.

If I recall, I initially purchased 3,000(!!!!!) or so ETH tokens when it was sitting around $1. A few weeks later, I began to watch it start to climb until it hit a ceiling of 0.003 ETH/BTC. After agonizing for DAYS over whether it would break out and listening to the (now-defunct) TrollBox full of FUD(Fear Uncertainty Doubt) and hype, I wasn't sure what to do. I sold a few of the ETH at a loss and waited some more.

Then one day... it happened.

It broke the 30k satoshi barrier and began climbing like a rocket. It was like a giant whale was just biting up huge orders of the sell book and making the lives of all of those who had been driving the price down through shorts absolutely miserable.

One particularly snarky bear whale (I won't mention his name since he hadn't been back to Poloniex since) spent his entire days mocking the value proposition of the Ethereum project, how it would fail, and how he had millions of dollars worth of bitcoin in reserve to keep the price crushed under his weight.

The bull whales had different ideas in mind. Within a week or two, his stops were bypassed, his shorts were liquidated, and his portfolio was essentially wiped out.

This scared the hell out of me.

This was my first glimpse into the world of crypto trading, and I’ve learned some simple lessons from that point that I think could be of service to some of the many n00bs coming in due to the rise in interest on the topic…. So here we go!

• Do your damn homework!

Never invest in an asset without doing your due diligence. If someone tells you that a token is going to be the next big thing, ask them to back that claim up with research and learn what the token does and how its underlying technology works. If it doesn’t have a legitimate value proposition for a broader market need that solves problems faced by industries with access to capital, be wary. Focus on the bigger players first, then learn what new market entrants may look like.

• Margin Trading WILL Chew You Up

I’ve had good days on margin and I’ve had very bad days on margin. After two years in this game, I’ve finally come to the conclusion it’s simply not worth it with the algorithms out there designed by people far more brilliant than myself.

• Understand the technology and fundamentals of the coins you invest in

If you believe in the technology fundamentals, don’t sell for a loss unless absolutely necessary (or if a catastrophic failure happens with the tech -- see the DAO). Everyone in the market wants to shake you out of your position so that you sell lower than you bought, and buy high than you sold. Don’t be one of those folk.

• Have Limits

It’s better to sell at a small loss than to hold until your portfolio is drained completely due to false hope. The goal should be to fight another day.

• Separate Yourself from the Rat Race

Spending too much time staring at the charts will either degrade your faculties, make you emotional, make your overconfident in your abilities to read the market (or more likely, a combination of all of the above).

Now please, please bear in mind -- I am NOT an expert at this. I’m a novice with some abilities of strategic and tactical analysis offering my observations of one of the most complex ecosystems I’ve ever encountered, short of actual warfare with live rounds being fired.

If you’re reading this anywhere near the time of this publication, you are quite literally on the leading edge of a technological revolution. The cryptocurrency field requires a solid understanding of technology, economics, market forces, politics, and human emotion.

Call it -- Cryptonomics. If no one else has, I'm coining this first on the Steem Blockchain for all of history to see!

As a collective community of global crypto-geeks, we are carving out a new frontier of market dynamics and very few people understand what’s happening out in these hinterlands. Even fewer could begin to coherently explain it. Learn your skills now before everyone else, and be a very valuable asset in the near future.

Welcome to the party.

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