Crypto
Forays into blockchain, NFTs and POAPs live here. I write about minting POAP tokens at family events, celebrating Ethereum’s 10‑year anniversary by creating an NFT and even using monitoring services to keep my POAP feeds up and running.
Approaching Crypto
I’ve recently clarified my thinking on Bitcoin and related crypto. To be transparent, I’ve followed this for years and had plenty of opportunities to buy BTC for a few hundred dollars. It’s now over $50,000 a coin. So, based on that, you may want to stop reading now. 😊
Focusing on 3+ year horizon / Investing
First, I’m not looking to become an active trader. That isn’t my game. So I’m going to look at all crypto investments with a 3+ year horizon. I have a long view that crypto is real and will be a component of corporate and personal balance sheets over the next decade. How large of an element? More than it is now!
Only $10B instruments / Limit Risk
I’m only considering crypto that has a total market cap over $10B for at least 30 days. I’m also only considering crypto I can trade on Coinbase. Setting a value threshold limits the noise and distraction. I am sure there is positive activity below $10B, but I’m choosing to ignore that for now. Based on that limit Bitcoin (BTC) at $1.1T, Ethereum (ETH) at $233B, Litecoin (LTC) at $16.2B, Chainlink (LINK) at $15B, Bitcoin Cash (BCH) at $13.8B, and Stellar Lumens (XLM) at $11.8B are the only things I’m watching. (Market caps as of Feb 20 2021 7:00 AM CT.)
Any crypto over $10B in value is worth a nominal investment and puts it on the radar to consider more broadly.
The one exception I am making to that limit is stablecoin. I don’t know what to think of stablecoin, and I am tracking USD Coin (USDC) to learn more.
Develop a Model / Diversify
Crypto are very different, with different objectives. You can treat them as a basket for broad crypto investment and a bet on decentralized financial systems. But that is where it ends. I think you should develop a model for each one and why it is applicable for investment. My current thinking is:
| Crypto | Value |
|---|---|
| BTC | Stored value. I think of it as gold. |
| ETH | A bet on a different compute model. |
| LINK | A bet on smart contracts. |
| LTC | Money in your wallet. You might buy a coffee with LTC. |
| BCH | Bitcoin version of LTC. Same thesis. |
| XLM | Financial backend and potentially an alternative to systems like SWIFT. |
| USDC | Question mark for me right now. |
Overall Allocation / Portfolio
Crypto is super volatile and risky. I like Ray Dalio’s comment.
Bitcoin looks like a long-duration option on a highly unknown future that I could put an amount of money in that I wouldn’t mind losing about 80% of.
So with that in mind, this shouldn’t be your retirement fund!
I’ve watched this for too long from the sidelines and have not participated other than some small dollars for fun. My brother-in-law Hector made a comment that resonated with me. With a handful of public companies now holding BTC on their balance sheet, others will follow suit. I’ve also had many people approach me about using BTC as a hedge on inflation.
The net of all this is that crypto has moved from experimental to maturing and I expect we will see a multi-year increase in demand.
I haven’t talked about the technology behind it all. I’m entirely confident in that component, and I use Coinbase to manage my wallet for me.
The information provided on this website does not constitute investment advice, financial advice, trading advice, or any other sort of advice and you should not treat any of the content as such. This website does not recommend that any cryptocurrency should be bought, sold, or held by you. Conduct your own due diligence and consult your financial advisor before making any investment decisions.
Bitcoin has gone crazy this year. That is more than a 10x price change in the last year, most of it in the last month! Doesn’t seem correlated to anything of measurable value. 🤷♂️💸
Bitcoin went up 21% in the last week! 🤭
I don’t get 1000%+ price increase in Bitcoin. 🤷♂️
Bitcoin price for last month. Bananas. 🍌🤷♂️
Bought a trivial amount of Bitcoin and Ethereum. If previous patterns repeat, the price should drop precipitously now. 😊
Introducing the Shift Card ← Shift Card is example of what we need to make Bitcoin actually usable.
Don’t see anything Square Cash can do that I can’t do already with Bitcoin. What am I missing?
Bummed that I cannot find a single coffee shop or restaurant in Minneapolis that accepts Bitcoin. 🙁
I bought $40 of Bitcoin and now I have less money! I thought this was supposed to go the other way!
I finally joined 2013 and got a Bitcoin address.
1JNbi6bHfQPMgmizA7NVprz4nj3DBJqAuM
Technotarian
I was reading this very interesting article on Bitcoin by Jasan Calacanis and used the term “technotarian” and then defined it in a footnote as:
We made this term up to describe the “good people” of the internet who believe in the fundamental rights of individuals to be free, have free speech, fight hypocrisy and stand behind logic, technology and science over religion, political structure and tradition. These are the people who build and support things like Wikileaks, Anonymous, Linux and Wikipedia. They think that people can, and should, govern themselves. They are against external forms of control such as DRM, laws that are bought and sold by lobbyists, and religions like Scientology. They include splinter groups that enforce these ideals in the form of hacktivism, such as the takedown of the Sony Playstation Network after Sony tried to prosecute a hacker for unlocking its console.
Great term. A quick search also brought this 1995 definition of Technological Libertarianism.