Comparing Cryptocurrency Investing To … ?

I Have Cryptocurrency, What Now?

So I started with some Numeraire. I had never bought or sold any cryptocurrency in my life. It seemed a hassle I didn't want to deal with. But the ERC-20 tokens seemed to have a price. But there was nowhere that would buy them for cash. That's what I thought when I first got them. It was enough to get out all of the debt except the house and buy a newer used car, actually enough a new car for cash off the lot free and clear, but the way I see it, someone else can pay $40,000 to drive a car for the first 7 years. I'll pay $9,000 or so to drive it the next 7 years.

So all I did was research enough to find out that somehow Numeraire tokens were related to Ether. And Ether and Bitcoin were the most liquid cryptocurrencies. At this time I knew nothing about light wallets. I knew the Bitcoin blockchain was huge and so the Ether blockchain had to be smaller. Yay, Ether won. So I downloaded the Mist wallet. And then tried my first exchange on Shapeshift, not thinking that my blocks will be one of the last downloaded.

So I ran into the blockchain explorer's and realized that I could see the money there even though my wallet couldn't. And then I found MyEtherWallet and it was on. On one transfer I sent it directly to my wallet instead of through the exchange. I thought it was gone forever. But it was there. ERC-20 tokens are held in Ether Wallets.

That's how stupid I was in the beginning and I am only slightly less stupid now. So I got all of it in Ether and then bought a couple of Bitcoins. Then I transferred some money from Gemini for cash. I had to do that to make it real, at least slightly And I put myself in a holding pattern until I could learn. I figured it was as safe as it could be for now.

Hitting the Books

So when I got real money (I have a different opinion on that now) my mentality changed. It hadn't been too hard at all. It was pretty liquid. I could get cash from it in about 24 hours. Now that I have a Shift debit card attached to my Coinbase account, I literally have instant access to exactly the amount I need. And as long as I watched my security, it was there where only I could get to it. If I moved it all to the bank, then I was trusting a lot of possible weak links.

So the plan went from cashing out and starting with no debt to possibly turning what I had into an income stream that meant the side jobs I would pick up every now and then to make ends meet were not necessary. If I did this right, I could not only not be living paycheck to paycheck, but I could have some time to build something again, not because I was smart and could trick the system to make easy money like affiliate marketing had been, but because I wanted to build something and then I would find the market. The whole work could be my vision and use my creativity. Not just the part where I turn other people's ideas into reality.

So I started looking for books on how to trade cryptocurrency, Guess what, there are hardly any except for short, heavily marketed books written to make a quick buck. But I found other books and started reading in every spare minute, listening to podcasts, etc. I've learned that by now, memorization and heavy study may not do much. But if I read fast and read a lot and just do, things start sticking faster. I trust that they stayed in my head attached to other similar things ready to be activated by something I see when they are needed. And eventually, the whole thing will be a picture and I will know the answer to questions I haven't read just because it fits the picture. Once I have the whole mechanism in my head, I won't need words.

So I read some books on value investing in stocks. I thought that was a good start. This was basically found money. By now I had had it a couple of weeks and it had increased. At this time I was thinking of something like taking half of my profit out each month and leaving the other half in. Hoping that would be possible and wouldn't eat into the initial amount. The thing about value investing is that cryptocurrency is not the same. The value is in the idea, what the currency does and whether it does that uniquely or the best. And then there is a little been there first and as Dash has proven, a little marketing can go a long way. So straight clone of Bitcoin, no value. Doing something that Bitcoin hasn't or more then Bitcoin can, value. Or promoting one feature of Cryptocurrency, taking your techno head out of your ass enough to realize that most people aren't going to geek out on the jargon, and then introducing it to people who it can really help a lot, like migrant workers, value. So value is just looking at what they are doing with the technology.

Okay, so maybe a little piece of the puzzle. So I started reading Forex. And fuck Forex, It's like accounting. Those are boring numbers. Statistics and probabilities are fun numbers. They are where you find edges. They are tools of the make the number bigger game. Accounting just tells you how much the number got bigger, how the number is smaller because of the cost of raw materials and how much of that number you have to give the government. And Forex is rigged by Central Banks anyway. It just seems like being a scavenger bird among the lions. You are just annoying. They let you play there because you can't eat much and if you do, you are a bite-sized snack, gone like that. But it did get me thinking cryptocurrency trading was and was not like Forex. But I didn't finish the book. It depressed me. It was like waking up and finding out you were the main character in the Truman Show. Screw debating determinism as a philosophy. What about in a reality where Central Banks determine a countries prosperity. Free trade, my ass. Kinda free trade is more like it.

So I looking into charting and backtesting also. What I learned there was that it was hard to determine the scale. The long-range methods used for stocks seemed compressed in cryptocurrency. On stocks, you look for a trend over a three month period. In crypto, who the fuck knows?

Keep Moving Forward

So I'm still learning and putting together something that seems like a system in my head. A way to think about cryptocurrency investing. So far, I am thinking of cryptocurrency as stocks when I have them and are looking for buy or sell signals.

And consider Forex, arbitrage, and silent auctions when it is time to sell. Because I have 5 exchanges I can sell my crypto on today. The fact that the exchanges can have a slight difference in rates or even a massive one means when I go to sell or exchange, I have to do lots of math to see what avenue nets me the most profit. Today, if I want to buy Ether, I will get the best rates at A exchange, but if I sell, I will get the best rates at B exchange.

And also, there may be multiple ways to get the currency I want, which adds to the complication. If I go to ShapeShift, I can exchange Ether for Bitcoin. But since Coinbase exchange rates run a little bit rich and are instant, would I actually make more profit, buy selling the Ether for cash on Coinbase and turning that Cash into Bitcoin. I know it would be faster. But then again, math. Math that no current dashboard I have found will show you.

But I'm a developer. This is the type of the stuff I build. And since I really need this, it's time for me to get to work.