During a meeting with my boss several months ago, he brought up a matter of scheduling - and I did not have my calendar in front of me. “What? No calendar?” he exclaimed. “You need to have your calendar with you; you need to write everything in it, and you need to bring it everywhere you go. That’s what people who have real jobs with real responsibilities do.”
I think my temperament does not interact with calendars in the conventional way, and yet I do not miss appointments… but that’s a matter for another post. I appreciated the reminder. I have a real job and it has real responsibilities. It can be easy to forget that when your job is super flexible, happens to be at your church and your boss happens to also be your pastor and you’re basically among friends on the job.
Since that meeting, I’ve been saying something similar to anyone I happen to talk to who shows any interest in getting involved in the cryptocurrency industry. You read that right. I said cryptocurrency industry.
This is a real industry, and if you want to get involved either as an investor or an employee or contractor, you need to treat it like a real industry.
So, what is a real industry? Think about any other industry, like the automobile industry or the steel industry or the oil and gas industry. What do they all have in common?
They have a product, or even several products. They have technology and infrastructure to support the production and distribution of these products. In the case of automobiles, you have factories and car dealerships, for example.
They have important players. Some companies are well known, such as Ford or Kia. And those in the know will be able to tell you who the CEOs and other important executives of the companies are. Changes in leadership can definitely impact a company’s bottom line as well as its stock price, so investors pay attention to them.
And, real industries have regulatory oversight. It could be environmental regulations, or rules to prevent the development of monopolies, licensing requirements, or a host of other regulatory standards.
If you want to get involved in a real industry, you need to have good working knowledge about it. What are the trends, what are the new technologies, who are the key players, what are the fundamentals (as seen on those financial statements) of the various companies who shape this industry? You will need to know these things whether your goal is to land a job within the industry or to buy holdings in one or more companies within the industry. You wouldn’t walk into an interview or buy a hundred thousand shares without such knowledge.
But that is exactly what often happens within the cryptocurrency industry. Newcomers often treat it like some sort of speculative playground or a get rich quick scheme - or as DNotes founder Alan Yong puts it, a winning lottery ticket. Just a few months ago I was seeing ads all over the place urging people to convert their IRAs and other retirement accounts into cryptocurrency. Quick, buy Ethereum before it goes to $400! How many people bought Ethereum without actually knowing what Ethereum is and how it works? And then there were the ICOs which raised millions in capital in record time and conferred no ownership or other rights to those who bought the tokens. And predictably, those dreams of quick riches did not immediately materialize for most people. They rarely do.
Where I live in Colorado, I see oil rigs and other oil and gas related infrastructure going up everywhere. I have to now share the road with the numerous oil trucks carrying their loads from point A to point B. When I put gas in my car I can see the price is elevated. People seeking and landing jobs in the oil industry are rapidly moving into the area and I can see houses going up like mushrooms. The highways are clogged, and Denver now has real rush hour traffic. Obviously there’s tons of money in oil and gas and there are riches to be had. But am I going to go and quickly buy shares of whatever companies are working here because I believe that the stock prices will go through the roof (to the moon!) next year and I’ll be rich?
No – and with good reason.
There’s one thing that stops me from rushing to do that: other than being annoyed with the extra traffic, I really only think about oil and gas when I’m either driving past yet another new oil rig or I’m putting gas in my car. As long as I can fill up and be on my way, that’s the extent of my concern for oil and gas. I happen to know that some guy named Rex Tillerson who used to be the CEO of a major oil company also served a stint as President Trump’s Secretary of State. In other words, my knowledge of the oil and gas industry is rather limited, and my motivation to increase that knowledge is even more limited.
There’s nothing wrong with being largely ignorant about a particular industry. The fact that I can drive to my heart’s content with no further thought of where the fuel comes from is an indicator of the success of the oil and gas industry in delivering one of its many products to the masses.
But it would be stupid for me to directly invest significant funds in the oil and gas industry while still in my current state of ignorance about it. I could choose to study up on this industry and become knowledgeable so that I can invest. I’m sure it’s true that there is money to be made in oil and gas. But that knowledge is an absolute prerequisite to successful investing. Without it I’m likely to buy or sell for all the wrong reasons and make emotional rather than rational decisions.
It’s the same thing with the cryptocurrency industry. You see the signs indicating that there’s money to be made here? Congratulations! But your work has only begun. It’s now time for you to become a student of our industry. It’s time for you to learn all about the products, the trends, the technology and the key players. Do not invest before you do that, or I can guarantee you will lose. Because so many other people treat our industry like a speculative playground, and regulatory oversight and enforcement have not yet caught up, prices are extremely volatile. Irrationally volatile. You can work with the volatility, but it takes some getting used to and some know how about what’s going on behind the volatility.
Because our industry is very new, it can be a welcoming place for new students. If you get involved now and don’t buy anything for another six months, you’re still an early adopter. You can still ask a question on the DNotes thread of BitcoinTalk and get an answer from either the CEO or other executives of DNotes Global. You can still direct message the developers of NEM (a top 20 cryptocoin) with a technical support issue and expect an answer within a reasonable time frame. You can hang out on the DMD Diamond Slack channel and hobnob with every single member of the Diamond Foundation on a daily basis.
In other words, unlike more established industries, you can actually get to know some of the key players directly. That makes the studying a lot more fun, but it does not mean you shouldn’t take them or the industry any less seriously.
The bottom line: the cryptocurrency industry is a real industry, with real products, technology, trends, infrastructure and key players. If you want to get involved as either an investor or employee, you need to treat this as a real industry. Your success here depends on it.