Flipside Crypto: The Oxymorons of Crypto Investing
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Go ahead. One more time.
Tell me about getting into the “hottest ICO” — which presold it’s presale tokens, preceding what was previously expected.
Or pitch me an opportunity to join a Bitcoin mining operation that is so perfectly foolproof, it could only be a Ponzi scheme.
(true story: this one was pitched by a shirtless guru, from his house in Acapulco. That he just bought from his returns. And everyone within his line of sight was <swings around computer to a bunch of twenty and thirty-somethings sitting around a pool, partying, slurping drinks, slouching — oh so cooly> making…$3k…$5k…$10k…per day!
But to do this, I would have to sign in through a VPN because, well <don’t worry about this>, it wasn’t entirely clear if this was legal in the US. But that doesn’t matter, because if I get my friends to join, then I would receive 5% of their returns. And once I did start to see money flow, I would want to reinvest a large portion of those back into the mining operation, so I could get more capacity. <Because that’s what everyone does.> . Sir, please label this exhibit Ponzi 101.)
At the fringes of the largest shift in the economic landscape, it shouldn’t come as a surprise that there are people looking to make quick, easy bucks.
Or.
I guess.
Bitcoins.
I prefer to look at the Blockchain / Bitcoin hype a bit differently. Underneath all of the bluster, there is a very real shift in how the world will operate. And beyond that, yes, there’s a lot of money to be made in this new economy. But it’s not going to be made by the majority of the “get rich quick” folks (a few will get rich, but many will get hurt). Rationally, it will get made by those who figure out how to “value invest” in this space.
Yes, value investing in cryptocurrency may be one of the most outlandish oxymorons you’ve ever encountered — unless…well, unless the future is already here.
With Bitcoin and Ethereum — and their respective forks — leading the way, there are now 1,000 Altcoins and Tokens, many of which will increase in value substantially over the next decade.
Yes, there will be volatility.
Yes, there will be many times naysayers will justify that the market for crypto is officially over.
But eventually — for those who maintain their positions, don’t overtrade, and sit tight — there will be substantive, generational return to be made.
The hard part about value investing in crypto today might not be what you think. Identifying the investable alt coins or tokens requires little innovation. Analysis via algorithms and data science have already been weaponized by equity investors, brokers and hedge fund managers. With those tools in hand, actively listening to the market and understanding blockchain’s fundamentals will give you all that you need to pick effectively.
But after the identification of investable crypto, most potential buyers are pretty much hosed. Here’s why:
- First, you’ll need to figure out a paced acquisition process, or else you risk moving the price in the market (down, unfortunately).
- Second, you’ll need to understand how transfer your holdings between cryptocurrencies — many require Bitcoin over cash as acquisition principal. So you may need to become versed in crypto exchanges like Kraken or Poloniex or Bittrex. And then you have to figure out how to run effective arbitrage across dual exchanges.
- Third, you’ll need to hone your technical chops in order to set up digital wallets. The complexity of wallet activation is multifold. Do you choose a multi-wallet program like Jaxx, or utilize a hardware-based wallet like Bitcoin Trezor, which serves the dual purpose of cold storage? Neither support all coins, so even if you do choose those, you’ll also need to download, setup and activate coin-provided digital wallets.
- Fourth, once you choose your wallets, each has an entirely unique password creation process. And, lord help you if you have even a modicum of dyslexia, because you’ll need to copy 6–30 random words during each setup process.
- Fifth, you cannot leave your passwords or hashcodes vulnerable to cyberattack, or you could lose all of your currency. So, you need a cold storage solution — simply put, you need to disconnect your digital wallets from the internet. Do you write the codes on paper? Do you store them in a safety deposit box? Do you backup in AWS?
As a buyer, it’s infuriatingly complex. It’s like it’s the TCP/IP era of the Internet and your friend is explaining how to get online:
“You just ‘dial up’,” they offer.
“Dial up, like a phone?”
“Sort of. Did you get an AOL CD in the mail? Use that, then connect to a browser.”
“What am I browsing, like in a store?”
“No, a browser, like Netscape, do you know what that is?”
“No.” Now you’re exasperated.
“It doesn’t matter, once you open it up, you’re online.”
“Then what do I do?”
“Well, that’s the special part. You can do anything! It’s the Internet!”
How long did you wait to figure the internet out?
Today we are proud to officially introduce Flipside Crypto, which implements investment clubs for cryptocurrencies.
We are a team of 5 experienced entrepreneurs — with skills ranging from technology to data science to financial planning.
Our launch coincides with the closing of Flipside Crypto Club One. This Club was purpose built to help a handful of people acquire a “basket” of ~15 different cryptocurrencies. But more than that, it was designed as a service for effectively gaining access to the currencies: that means managing the entire process of digital wallets, encryption, safe keeping and cold storage of a client’s cryptocurrency property (the official classification by the SEC).
It’s the latter part that really hits home how early this market is. Actually gaining positions is full of complexities, but understanding what to do with those positions is downright unapproachable.
The paradox of Flipside Crypto Club One is that in a market that is accelerating faster than any before it, our aim is to help our clients slow down and become patient.
We don’t advise.
We don’t trade daily.
We aren’t their bank. (We don’t even hold the cryptocurrency positions — it’s the client’s property, and sits in their possession.
We are clear with our clients: this is a long game. We do the heavy lifting and then you have one job: sit on your cryptocurrency for many years, maybe even a decade.
One other important component: as a club, we meet regularly to discuss the evolution of the cryptocurrency markets. Sure everyone wants to make money, but learning and education may be an even higher priority for our clients thus far.
My Dad always used to say to me, “if it’s too good to be true, it probably is.”
I suppose one could argue that Flipside Crypto’s market approach is the most yawn-inducing, boring, and just-good-enough cryptocurrency organizations around.
Honestly, we’re kinda fond of that.
[PS: Flipside Crypto Club One is already closed with 14 committed investors, but we are hard at work thinking about Club Two. Find us if you want to talk about it].
Also, if you prefer value over get rich quick schemes, please “Clap” below so others will see this post.
