This is a post for newcomers and “old-timers” alike, and is rooted in the hope that we can make this community more informative by favoring thoughtful context over mindless repetition.I think we can all agree that one of the purposes of this sub is to educate newcomers to cryptocurrency. But were I a crypto newcomer and I started browsing this sub, there are a few things I would see so often that I might begin to accept them as gospel, and I might even start to believe that going against them was nothing short of madness.Further, after being here for a couple of weeks or months, I would soon feel like I knew all of these mantras, and that if I could repeat them at the right time and place, and get upvotes for doing so, that I was getting super smart about crypto, knew the ropes, and was no longer a n00b. Because now I would be helping the true n00bs. I would be contributing!The reality is that for the largely empty phrases I list below, there is important nuance and context which, if left out, can render the advice useless at best, and at worst, potentially harmful to people just getting into crypto. Dogma is never a good thing, and we are fast becoming an insular echo chamber of Dunning-Krugerites who would rather just downvote someone who disagrees with us than actually consider that our own take might not be the only possible truth.Therefore, I suggest we eliminate knee jerk regurgitation of the following phrases/ideas without providing further context. While some of them are generally true, the real picture is substantially complicated. I’ll provide the list, then include details for each one on the list about why I think we should be more careful:“Not your keys, not your crypto.”“Always DCA (dollar cost average) when investing.”“Time in the market beats timing the market.”“DD (due diligence) and DYOR (do your own research).”“Read the white paper.”“Stimulus checks will pump your portfolios.”“Money printer go brrrrr.”“We’re still early, guys!”And now, more detailed comments on each one, and why it’s not that simple:Not your keys, not your cryptoTechnically, this is true. What people are saying is that crypto stored on an exchange with a custodial wallet gives you less control. The exchanges keep the keys, and in theory will use those keys to move the crypto to your wallet when you withdraw it, after which YOU will own the keys, and therefore, the crypto. Unfortunately, this little piece of “advice” is also used to make people feel dumb for leaving stuff on an exchange. But there are several things people forget to consider when they cough up this tired critique:Those dollars you think you have in the bank? Same thing. You are confident you can slip a card in an ATM at any time, or go into a bank, and pull out some money. But the bank can decide for any number of reasons that you can’t. You are trusting the bank to keep your money safe and give it to you whenever you want, and similarly you are trusting the exchanges to do the same thing. Are most banks more trustworthy than crypto exchanges? Probably. Maaaybe. Let’s not forget one of the driving ideas behind crypto is to eliminate banks from the equation. How are we gonna do that if we don’t trust the exchanges?Having your crypto in a custodial wallet saves you from disaster if you lose your seed phrase. You can always simply reset your password if you forget it. Once you move it to a wallet, it’s your responsibility, and no one can save you from your own fuck-ups. DO get wallet, eventually. But not until the potential loss would have a critical impact (different for every investor), and not until you understand all the things (SHA-256, private/public addresses, transaction fees, network protocols, and more).Depending on the exchange and the particular coin, there is a wide variation in what it will cost you to move your crypto off an exchange. There are ways to save money (like conversion, or custom fees, for example), but every scenario is different, and you might one day be surprised and disappointed by how much you will one day need to pay to have your coins safely in your wallet. Once you know more about how everything works, you can usually (but not always) find a way to get your coins without paying a lot.In so many cases I’ve seen, the use of this phrase is tantamount to saying “Oh, you lost some money? You should have known better, and you are dumb.”Here’s my personal advice for new crypto HODLers, which of course doesn’t fit into an easily typed banal phrase: The big, dominant exchanges are generally safe. Not as safe as some banks, but remember these are businesses, and frankly they are gold mines for the people who run them, so they don’t want to blow them up. These are not rug pull operations. They don’t need to fuck us that way, because they can fuck us legally, through fees and coin spreads. IMO, this applies to Binance, Coinbase, Kraken, and maybe Gemini and Kucoin. For the small exchanges you didn’t know about until your cousin told you about them on the WoW discord, you’re on your own. Personally, I might have a thousand dollars or so on Binance and CB at any time, and when it gets to be much more than that, I move it to a wallet. Once I do, I feel better about it, sure...but if I don’t trust them to keep my money safe for a couple weeks or more, I’m not sure I’d trust them to keep it for the ACH settlement period. Most worries about mainstream exchanges are blown out of proportion. Yes, you want to eventually have your crypto fully under your own control, but in the early going, don’t get stressed about custodial exchange wallets.Always DCA (dollar cost average) when investingAgain, this is sound advice in some cases. The idea is that you don’t have any idea where price of a coin is going, and if you buy some once every week, on any given schedule, on average you will do better than if you had bought the whole 4x in one go. If everything is random, and the specific market is volatile, this would be true more often than not.But how much of a difference does it make in final returns? If you’re buying sub-penny coins, it can make a huge difference (yes, in general coin price doesn’t matter and it’s percentage growth we should be thinking about; but lowered psychological resistance usually results in expanded growth rates at very low coin prices). It can also make a difference if you’re investing thousands of dollars, to avoid a really bad entry point.Let’s not forget that DCA isn’t free. It takes time to set up, and track, and depending in the exchange and whether you are moving the purchased crypto to a wallet, the fees you’ll pay will more than wipe out the potential gains you might have gotten from DCA.IMO, if you want to buy something like ADA or HBAR, and you can only afford small amounts at a time, since it’s cheap to move these coins around, DCA makes perfect sense. On the other hand, DCA with bitcoin rarely makes senseIf you have a chunk of money to invest in crypto, just make your choices and jump in. Don’t bother setting up a deliberate schedule to invest money you already have. If you have the cash and know what you want to invest in, get it in there ASAP to start returning. Anyway, if you put money in as you can afford it, that’s pretty much a passive DCA anyway. DCA will rarely hurt you (but see comments on market timing, below); it’s just that it’s often unnecessary, so shouldn’t be thrown around as some sort of essential protocol.Time in the market beats timing the marketDid Warren Buffet say this, or is that apocryphal? Doesn’t matter, I suppose. It’s a dumb old-person-sounding way of trying to sound clever while not really conveying useful information.Worse yet, most usage seems to strongly imply that we can’t predict movements in coin prices AT ALL, which is in fact false. By staying generally informed (see DD and DYOR below), and keeping an eye on news catalysts, we are often able to make strong predictions about price movements which will be accurate more than 50% of the time, and sometimes a LOT better than 50%. This is really important, and just as important as understanding that nothing is a sure thing. It’s a fact that intelligent, thoughtful, informed predictions are better than wild-ass guesses, and this can be used to advantage, especially when one is making buy/sell decisions on large positions.Sure, any strategy that depends on consistently timing the market is likely to fail. But don’t mindlessly spread the idea that we have no clue when coin markets might go up or down.DD (due diligence) and DYOR (do your own research)Of everything on my list, this one is the most true, and I would never argue against the essence of its meaning. But there are reasons not to repeat it thoughtlessly.Of course you should educate yourself about the projects you put your money into. But the fact is we are not all developers, economists, or mathematicians. Most of us don’t have the background or the time to read an in-depth treatise on asynchronous Byzantine Fault Tolerance, understand how Haskell fits in, or deeply grasp the inflationary potential of a particular schedule of coin release or burn.We rarely do our own research. Rather, we depend on reliable sources to distill the information for us. We should always consider sources. What’s their motivation, who funds them, are there conflicts of interest, etc. Most YouTubers are terrible, but by no means are all of them bad. There are a few gems there. One of the key places people will turn when vetting sources, obviously, will be this sub, and it’s for this very reason I think we need to be more careful, more nuanced in our advice, and less prone to regurgitated dogma.Read the white paperThis is obviously related to DYOR above. A handful of people here literally read these in depth, and also understand them, but in general my reaction to this phrase is, shut up, YOU didn’t read the fucking white paper. Odds are good you don’t understand what “white paper” means, and even if you did read it, it went mostly over your head.My problem isn’t with the very good (and obvious, let’s face it) advice that newcomers should educate themselves. It’s more that people just puke up these phrases and move on. If you post these trite aphorisms without further context, you are either being uselessly dismissive of someone’s concern, or you’re just trying to sound smart.Stimulus checks will pump your portfoliosNo. It simply doesn’t make sense. I’ll spare you the details here, since this post is long af already. I’ve been over them all before, and I have bags of downvotes to prove it. Suffice it to say that the numbers just don’t make sense, the vague correlation between stimulus checks and a modest pump of this or that coin notwithstanding. Just do the math, consider the actual data on where Americans have spent their stimulus checks, and also be aware that it’s a very US-centric view in a truly global market. Stop buying or advising others to buy based on things you think will happen due to US government relief checks. Those checks are not predictive, and it’s irresponsible to imply that they are.Money printer go brrrrrMoney printers do not go brrrr. That’s not what they sound like. It’s not even a decent facsimile of what a cartoon money printer might sound like. Who even comes up with this shit??More to the point, it’s a hackneyed and flippant way to say “OmG, iFLaTiOn!” while simultaneously implying that you have an underlying grasp on macroeconomics, which, judging by the preponderance of related comments on here, you probably don’t. The fact is, the few people on this sub who DO understand this and make quality analytical posts on the topic are never the ones saying “money printer go brrrrr.” It’s very r/WSB, and I know most of us would like to fight that image. We’re currently losing that fight.We’re still early, guys!We’re really not. Crypto is over a decade old. The rate at which it will bring people fuck-you levels of wealth is getting lower every day. Yes, it can still happen. There are still moonshots to be had, but we’re not tripping all over them.The good news is, we’re not LATE. We are going to witness the fruition of some projects with incredible potential to improve the world, bring agency to oppressed groups of humans, and make huge moves toward equality. This is a wonderful thing, and for some of us, will also bring very welcome financial stability, if not life-changing wealth.No, we’re not early. We’re just on time.
Submitted April 01, 2021 at 06:43PM
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