Who is this crypto market of yours?
Once again, my friends, colleagues and acquaintances ask me to tell them what crypto is and how to make money here. Early Saturday morning, in a good mood, I wrote this text in a personal message to one of these people, re-read it, decided to edit it a little and post it online. If it helps even one person earn money don't lose your money by thoughtlessly entering, I'll be happy.
Disclaimer
The following does not constitute financial advice;
Any risks are personal risks;
Any decisions are personal decisions;
Buying something on someone else’s advice without research means parting with money;
A fall of 20% is not a fall, it is a training of willpower;
I'm wrong, and everything that is said below is wrong. I don’t subscribe to any of my words. You are reading an article on the Internet from a person unknown to you;
I don’t know how to write large texts, much less beautifully. The total length of this text is only 1536 words, and in them I tried to lay down the basic minimum of my knowledge, gradually acquired on the topic since 2014. Naturally, this is impossible. Good luck 🙂
Base
2 sites for searching and initial study of projects:
https://coinmarketcap.com/
https://www.coingecko.com/
“Stable” coins: BTC, ETH
My favorites (04/13/2024): SOL, ADA, JUP, ZIL, TRX
New actively growing chains, where you can make a lot of money: BASE TON
How does it all work?
There are first-level (L1) blockchains with a native coin of the blockchain itself, the possibility or impossibility of owning any other tokens there, and the construction of programs (smart contracts). Example – SOL (L1) and JUP (a decentralized exchange token running on top of SOL).
The native L1 token will be used to pay commissions on all transactions, if you lower its value on the wallet to zero, nothing more can be done, you will have to replenish it from the outside (ask someone to throw off a ruble / buy on a centralized exchange and withdraw there / something else ).
Article about cryptocurrency in general (I haven’t read it, but Tinkoff usually writes well).
Then there are L2, L3 that expand the functionality and reduce commissions, which do not work without the main L1. On them, the native token can be either the L1 coin itself or their own coin. Example – Polygon (formerly MATIC) is L2 over Ether (ETH), where the native token is Polygon, not Ether.
Why is all this necessary besides “number go up yaay”?
Quite a lot of applications. I'll give you three:
1) Much simpler transfers to anywhere in the world without long waits and filling out a bunch of paperwork at the bank. Good luck sending a swift transfer overnight from Saturday to Sunday to another country and hope that it arrives at least by Monday afternoon. Good luck waiting for him to get there and not turn around/get lost, because today you are a “Russian pig” and they don’t want to serve you.
2) Also, tokenization of assets. An NFT picture of a pixel monkey for $3 million is, of course, cool and fun, but the real application will be that in the form of an NFT, without signing anything and without suffering, I will instantly buy the right to own some land/apartment/license key to a program, which I can then resell to someone else, and so on.
3) Decentralized (De-Fi) exchanges, where there is neither a market maker nor a company that can be closed by closing the exchange.
There are a lot of options to make money, a lot of narratives on which you can make money. Likewise, there are a lot of options for losing money. Until now, most of the crypto world is a real scam or pyramid. This does not mean that you cannot even make money from them. It is possible, and a lot. From hundreds to tens of thousands percent (I'm serious)but for this you need to understand what you are doing and why you are doing it, devote time, money, and moral strength to it.
To begin with, buy BTC, ETH, and don’t fool yourself with shiny coins
Next, there are crypto tokens pegged to the dollar. They are tied in various ways. Naturally, centralized companies issue and do this, and decoupling from the dollar is quite possible if the company starts cheating and it is discovered, or a loophole is found in the peg mechanism, if we are talking about algorithmic peg.
In the last cycle, a loophole in the operating mechanism of LUNA and UST became one of the reasons for the fall of the entire crypto market, pulling other players along with it and triggering a domino effect. You can read how it was.
In short, the guys were told and openly described what exactly needed to be done to break the algorithm and bring down the course, but they did not listen to the person who wrote this, saying that the implementation of this idea requires a lot of money and time. In the end, someone really had a lot of money and time, he did it, the end!
It's called stablecointhe most popular today are USDT And USDC. They exist on top of almost all blockchains. On the same CoinMarketCap, you can look at their contract address on various chains to make sure that this is a real token. Yes, nothing prevents me right now from creating a fake token with the same name and picture in 5 minutes and a couple of hundred bucks, welcome 🙂
Where to pay?
IMHO the simplest (centralized) exchange is Binancethen I highlight equally HTX (formerly Huobi) and OKX (former Okex)
You can deposit money directly from the card, or do it through P2P. There will be a lot of their own guides about everything in the world, gradually immersing them in the database as they are used.
Separate disclaimer – there is an ancient saying – “not your keys, not your crypto”, which also applies to exchanges. All the beauty of decentralization is completely lost when faced with centralized trade and a centralized traditional company as a business.
The exchange could go bankrupt tomorrow, it could be hacked, its owner could end up on trial and go to prison, the withdrawal of money could be permanently or temporarily closed at any time for any period. The war in Ukraine perfectly showed that when the state comes to a company creating a crypto product and says “either you comply with the sanctions, or we will close you down and put everyone on the bottle,” the company promptly obeys. Personally, I store on centralized exchanges only what is currently staked there occasionally at a good percentage, or what I plan to sell there in the near future.
Next – cycles
Since I mentioned them above. Cryptocurrency has been moving in cycles throughout its existence. The cycle lasts about 4 years, previously it was well tied to the Bitcoin halving algorithm (you can read about halving yourself). In this cycle, the bulk of the time is spent falling and stagnating at low levels. At this time, almost no one talks about cryptocurrency, and it is at this time that it should be actively studied and purchased. After 1-2 years at most, there is explosive growth and then collapse. In the current cycle, we are in a phase of rapid growth for about six months, there is still time, BUT!
But the fact is that this is the first cycle in history in which very large players stopped spitting about all this and telling everyone that the whole crypto is a pyramid, and banks are already investing in it. In this cycle, Bitcoin FIRST in its history has grown stronger than the peak of the previous cycle BEFORE of your halving.
The total capitalization of the crypto market today is only $2.4 trillion. The maximum for all time is approximately 3 trillion. This is an insignificant amount by the standards of those who began to enter here during this cycle. The capitalization of Apple and Microsoft (each of them, not together) is higher than that of the entire crypto market combined.
Everything will definitely be different, we will definitely all be shaved, hehe 🙂 🙂
Decentralization
Everything else is stored in decentralized wallets, and I try to trade everything on decentralized exchanges. Buy for simplicity on a centralized exchange, and withdraw it to a decentralized wallet. You'll lose $5-10 in commission, but you'll be protected.
ETH wallet– supports many chains
BTC
SOL– supports SOL, ETH, Polygon, BTC (in beta)
TRX
When you create a wallet, it gives you a seed phrase and asks you to come up with a password. Your wallet is the seed phrase. Not the application, but these 12-24 words. They can be imported into different applications (I threw off those that I consider convenient).
Write down the phrase only on a piece of paper, write down the password only on a piece of paper, don’t click on any stupid links, and don’t confirm transactions where you don’t understand what’s going on. Money is stolen in millions left and right, I myself lost thousands of bucks with one click, this is no joke. You most likely already have viruses on your computer and phone, and most likely they are already scanning everything that looks like a seed phrase.
I forgot the password – it is impossible to recover the money. You can search on the Internet for dozens of different stories about how people rummage through landfills and even hire a crowd of workers to rummage for them, because 10 years ago they threw away a laptop with a supposed thousand bitcoins and don’t remember their seed phrase. Don't repeat their mistakes.
DYOR (Do Your Own Research)
1 day in cryptocurrency in terms of news – 1 month in real life!
Wanting to earn a lot and consistently without reading something every day is a rotten idea. Doesn't apply to “buy the most boring coins and keep it” – this is a great path for the lazy.
What I personally read. The three most common places to skim through the top and go independently to look for information about things that interest you.
Daily email newsletter on weekdays with analytics, news and jokes for 5-10 minutes.
The same email newsletter very rarefrom a former professional poker player, now a professional trader of NFTs, coins and everything in between.
Both newsletters above also have sites on which old articles are posted, which I still haven’t read, but according to point 2, I’m trying to gradually read absolutely everything. A person has only 48 articles, and many of them are not so much about “where to make money”, but about the attitude to all this and the right approach.
Both links above have a paid subscription version with even more information (the other one is completely different), I subscribed to item 1 for a fee (only $15 per month), access to item 2 costs 0.08 eth ($261 at the time of writing these words)
2 bloggersthey talk a lot and are very irrelevant, their information should be treated with great skepticism, while sometimes they have great interviews with the right people in the crypto world, and these people need to be listened to and heeded.
Conclusion
I wrote a lot of information, a lot of it I didn't explain, and I did it purposefully. If you are not ready to study the topic on your own, you are not ready for cryptocurrency.
