Education as one of the fundamental pillars of the crypto ecosystem.
The last few days have been chaotic! You could probably extend this statement even to the last few months or years, but let's focus on the last 20 days. Inflation is at maximum levels in a significant number of countries. As a reference, year-on-year inflation in Chile and the United States is at 10.5% and 8.3%, respectively. In addition, we have continuous rate hikes by the Central Banks, the endless problem with the supply chain and the war in Ukraine and we could surely continue expanding the list, but with this we are already scared enough.
Now, the relevant thing about this is that no one leaves the consequences unscathed. Just look at the increase in the cost of living, the rise in credit rates or the financial market in general, including cryptocurrencies, to return to the well-known quote on Wall Street, Cash is King! Which seems pretty ironic considering inflation.
Let's develop this idea a little. With cash losing purchasing power and intentions to take advantage of the current “discount” in the world of cryptocurrencies, how can we identify where to invest? With so many analysts, influencers and other actors around, who do we believe? If cash is king, then education is queen.
One of the most common pieces of advice when investing - and less practiced than we would expect - is to never do so in something we do not understand. If before investing we do not understand how it works, what its risks and potential returns are, probably the best option is to stay away.
Taking this advice to the crypto ecosystem, we will realize that it is broad and complex, Blockchain, Non Fungible Tokens, Decentralized Finance, Cryptocurrencies, Wallets, Mining, etc., are some terms that we commonly hear, therefore, we must take the time needed to know what we will face.
The first thing is to focus our effort on studying the basic concepts and, from there, identify what response we are looking for in the ecosystem. The access to information we have today is incredible and with an appropriate filter, such as searching for content developed by specialized organizations or leading people on the subject, we can begin to design our roadmap.
If after having carried out this initial review we continue to be interested in participating, we will advance to the analysis of the projects that we want to incorporate into our portfolio or simply follow up.
Among the main issues to consider during the analysis, I recommend the description of the project, its market capitalization, current investors and its community. With this evaluation, we will be able to get an idea of the market's interest in this asset, as well as its value proposition, operation, associated projects and potential evolution.
There are an infinite number of projects, but I recommend doing your first analysis with the best known: Bitcoin (BTC) and Ether (ETH). It is important to mention that this is not investment advice, I just want to leave some references.
Finally, if we reach this stage, it is likely that a project has caught our attention and we should do an introspective exercise: What is my risk aversion? What type of investor am I? What is the estimated term of my investment? What is the objective of my investment? These questions will help us identify if we are prepared and, furthermore, if it is the right time, to invest in assets with high volatility and an uncertain outlook in the short term.
From my point of view, it is important to understand that the crypto ecosystem is still in an early stage, which in many cases makes it seem complex, creating a natural entry barrier for users, however, if we are interested in studying it and sharing our knowledge we are probably participating in the construction of the future.
In difficult times, any decision that affects our king must be consulted with our queen. Education is queen!
The last few days have been chaotic! You could probably extend this statement even to the last few months or years, but let's focus on the last 20 days. Inflation is at maximum levels in a significant number of countries. As a reference, year-on-year inflation in Chile and the United States is at 10.5% and 8.3%, respectively. In addition, we have continuous rate hikes by the Central Banks, the endless problem with the supply chain and the war in Ukraine and we could surely continue expanding the list, but with this we are already scared enough.
Now, the relevant thing about this is that no one leaves the consequences unscathed. Just look at the increase in the cost of living, the rise in credit rates or the financial market in general, including cryptocurrencies, to return to the well-known quote on Wall Street, Cash is King! Which seems pretty ironic considering inflation.
Let's develop this idea a little. With cash losing purchasing power and intentions to take advantage of the current “discount” in the world of cryptocurrencies, how can we identify where to invest? With so many analysts, influencers and other actors around, who do we believe? If cash is king, then education is queen.
One of the most common pieces of advice when investing - and less practiced than we would expect - is to never do so in something we do not understand. If before investing we do not understand how it works, what its risks and potential returns are, probably the best option is to stay away.
Taking this advice to the crypto ecosystem, we will realize that it is broad and complex, Blockchain, Non Fungible Tokens, Decentralized Finance, Cryptocurrencies, Wallets, Mining, etc., are some terms that we commonly hear, therefore, we must take the time needed to know what we will face.
The first thing is to focus our effort on studying the basic concepts and, from there, identify what response we are looking for in the ecosystem. The access to information we have today is incredible and with an appropriate filter, such as searching for content developed by specialized organizations or leading people on the subject, we can begin to design our roadmap.
If after having carried out this initial review we continue to be interested in participating, we will advance to the analysis of the projects that we want to incorporate into our portfolio or simply follow up.
Among the main issues to consider during the analysis, I recommend the description of the project, its market capitalization, current investors and its community. With this evaluation, we will be able to get an idea of the market's interest in this asset, as well as its value proposition, operation, associated projects and potential evolution.
There are an infinite number of projects, but I recommend doing your first analysis with the best known: Bitcoin (BTC) and Ether (ETH). It is important to mention that this is not investment advice, I just want to leave some references.
Finally, if we reach this stage, it is likely that a project has caught our attention and we should do an introspective exercise: What is my risk aversion? What type of investor am I? What is the estimated term of my investment? What is the objective of my investment? These questions will help us identify if we are prepared and, furthermore, if it is the right time, to invest in assets with high volatility and an uncertain outlook in the short term.
From my point of view, it is important to understand that the crypto ecosystem is still in an early stage, which in many cases makes it seem complex, creating a natural entry barrier for users, however, if we are interested in studying it and sharing our knowledge we are probably participating in the construction of the future.
In difficult times, any decision that affects our king must be consulted with our queen. Education is queen!