Crypto is 100% Player vs Player

Crypto is 100% Player vs Player

Crypto is undoubtedly a revolutionary technology that will change the nature of money forever. It is a discovery that allows people to take full control and custody of their wealth, and create a desperately needed separation between money and state.

In these pioneering early days of crypto, it is also a degen playground where the innovative ground-breaking projects are surrounded by multi-billion dollar meme coins and tokens whose only value is that someone else will currently buy them from you. It is 5% revolutionary value, and 95% a sophisticated game of hot potato … for now.

In order to make money in this medley of incredible innovation mixed with sophisticated emotional hot potato, the first step is recognizing the harsh reality. Once you understand that crypto is a gigantic player vs player game, where most lose at the expense of the few who can see and navigate the unemotional reality, you will truly set yourself up to be on the winning side of that high-stakes PvP game.

The statement that "Crypto is 100% Player vs Player" is not entirely accurate. Cryptocurrencies and the broader blockchain technology have various aspects, including both peer-to-peer interactions and elements that involve external factors. Let's break down some key points:

Peer-to-peer Transactions:

• One of the fundamental principles of cryptocurrencies is the ability to conduct peer-to-peer transactions. This means that individuals can directly send and receive digital assets without the need for intermediaries like banks.
• Examples include sending Bitcoin from one person to another using a blockchain network.

Decentralization:

• Cryptocurrencies often operate on decentralized networks, meaning there is no central authority governing the entire system. This decentralized nature is achieved through consensus mechanisms like Proof of Work (PoW) or Proof of Stake (PoS).
• Decentralization is a key feature that distinguishes cryptocurrencies from traditional financial systems.

External Factors:

• While the core transactions are peer-to-peer, external factors can still influence the crypto space. Market dynamics, regulatory changes, technological developments, and macroeconomic trends can impact the value and adoption of cryptocurrencies.
• News, events, and sentiment in the broader financial ecosystem can also influence the prices of cryptocurrencies.

Exchanges and Intermediaries:

• Cryptocurrency exchanges serve as platforms where buyers and sellers can trade digital assets. These platforms may introduce a level of centralization and can be considered as intermediaries in the crypto space.
• The activities on exchanges involve players trading against each other, but the exchange itself can have an impact on the overall dynamics.

In summary, while peer-to-peer transactions are a central component of cryptocurrencies, external factors, market dynamics, and the presence of exchanges introduce elements beyond a pure player-vs-player model. The crypto ecosystem is a dynamic interplay of individual interactions, market forces, and external influences.

The Harsh Reality of Crypto :

The concept that crypto is Player vs Player is not a knock on crypto, and should not be viewed as a criticism. It is a harsh reality that, although not unique to crypto, is particularly pertinent in crypto. The majority of projects do not generate a real yield that expands the base wealth in the system to the benefit of all participants. Instead, they overstate the “reported” value in the system with flawed metrics like market cap (MC) and fully diluted value (FDV) that are in no way reflective of the value stored in the system or the value that could actually be extracted from the system (or project).

As the markets grow and expand in the course of a bull run, those 95 out of 100 projects with inflated values can maintain those illusions as the new capital entering the market far outpaces the capital leaving it. When the capital inflows begin to lag the capital outflows, you have reached the end of the game of sophisticated hot potato. The race for the exits is quick and brutal, as we saw at the start of the bear market in November of 2021.

Always keep in the back of your mind that we are all racing towards that cliff, and although the gains will melt faces, and we may all feel like geniuses, the game has an abrupt end we need to be prepared for.

The cryptocurrency space has both positive and challenging aspects. Here are some of the harsh realities associated with cryptocurrencies:

Volatility:

• Cryptocurrency markets are known for their extreme price volatility. Prices of digital assets can experience rapid and unpredictable fluctuations, leading to both significant gains and losses for investors.

Regulatory Uncertainty:

• The regulatory environment for cryptocurrencies is still evolving in many parts of the world. The lack of clear regulations can create uncertainty for individuals and businesses operating in the crypto space.

Security Concerns:

• Cryptocurrencies are stored in digital wallets, and the security of these wallets is crucial. Hacks, scams, and phishing attacks are prevalent in the crypto space, leading to the loss of funds for individuals and exchanges.

Lack of Consumer Protections:

• Unlike traditional banking systems, cryptocurrencies often lack the same level of consumer protections. Once transactions are made, they are irreversible, and there may be limited recourse for users who fall victim to fraud or errors.

Market Manipulation:

• Due to the relatively low market capitalization of some cryptocurrencies, they can be susceptible to market manipulation. Pump-and-dump schemes and other forms of manipulation can impact prices and harm unsuspecting investors.

Adoption Challenges:

• Despite growing interest, widespread adoption of cryptocurrencies for everyday transactions is still a challenge. Many individuals and businesses are hesitant to embrace digital currencies due to concerns about stability, usability, and regulatory issues.

Environmental Concerns:

• Proof of Work (PoW) cryptocurrencies, such as Bitcoin, have faced criticism for their energy consumption. The process of mining, which secures and verifies transactions, requires significant computational power, leading to environmental concerns about carbon footprints.

Technological Risks:

• While blockchain technology is considered secure, it is not immune to technological risks. Bugs, vulnerabilities, and unforeseen technical challenges can pose threats to the stability and security of blockchain networks.

Speculative Nature:

• Much of the activity in the cryptocurrency market is driven by speculation. This speculative nature can lead to market bubbles and sudden price corrections, impacting both short-term and long-term investors.

Perception and Reputation:

• Cryptocurrencies have been associated with illicit activities, money laundering, and scams. This negative perception can hinder mainstream adoption and regulatory acceptance.

It's important for individuals considering involvement in the crypto space to be aware of these realities and conduct thorough research before making investment decisions. While there are opportunities, there are also risks that should be carefully considered.

Crypto Truths for Life-Changing Gains :

Let these truths serve as an important reminder of the bull market to come. As your portfolio grows beyond your wildest expectations, and you begin to lose perspective on the value of money. When you begin throwing 10X your weekly paycheck at the latest meme coin and buying the most recent hot JPEG for thousands of dollars. When you are ready to quit your career and go full-time crypto … remember that the game is 100% player vs player, and most players will lose in the end. The ones that recognize the shift and the harsh realities — that most of this is a big game of hot potato — will be the ones who leave the game as winners. Keep in mind these are generalizations, and are not meant to apply universally … exceptions exist.

1. Market cap and Fully diluted value are BS metrics

DogeCoin has a market cap of $11.5B, but that amount of value cannot be extracted. A mere $1.5M dollar sell would push the price down 2%, just imagine if 10% of the supply wanted to sell. MC and FDV are an illusion.

2. Games do not need tokens

There is nothing a game-specific token can do that ETH or USDC could not do better. Even the most successful Web2 game could not sustain a token: World of Warcraft had a huge demand for its gold, but the value of that gold was on a permanent downtrend. Tokens can be useful to bring in-game assets outside to the real world, but in the current iterations are nothing but money grabs.

3. Governance and Staking are not token utilities

Apart from ETH and maybe the top couple L1s, governance is a sham utility that provides next to no value. Staking is even worse, as it is predominantly paid for by inflation (which is just redistributing the protocol’s value from non-stakers to stakers)

4. Nothing is actually decentralized apart from BTC and ETH … and they don’t have to be

Decentralization is a scale, and in the case of startup protocols generally a luxury. BTC and ETH are sufficiently distributed to be considered “decentralized”, but effectively everything else is at best “decentralization in progress”. The reality is, though, that decentralization is not a key metric when evaluating short and mid-term investments as in the case of the majority of altcoins.

5. Crypto partnerships are generally a farce

Crypto partnerships are like suggesting you are partnering with Google when you use the search bar to ask “Am I pregnant?”.

6. Influencoors are informative Nincompoops

Sure, there can be a lot of value in listening to and consuming influencer content. Always keep in mind that they are not your buddies, generally will dump tokens on you, and have front run every opportunity they present you. Granted, there are plenty of good ones that provide valuable alpha, but they should be considered research tools rather than trade indicators.

7. 97% of TA “Traders” lose money over the long run

Technical analysis is anything but technical. Yes, it can provide some small insights into price levels of concern, but using lines on a chart to make investment decisions is a sure way to get wrecked long term. Over 97% of day traders lose money over the long term, buy your conviction plays and be patient.

8. True interoperability does not exist

Blockchains are silos by design, and they cannot natively communicate with one another. What we have are increasingly better means of automated third-party communication between chains, with reducing amounts of friction as the tech improves.

9. There can be no ETH-Killer

If you kill ETH, the L1 doing the killing would be sealing its own fate. Apart from a few exceptions (eg Solana), alternative L1s and L2 are really just bulk buyers of ETH blockspace. More importantly, they are complementary. The success of one is good for the other.

10. Maximalism is Toxic

The laser-eyed BTC maxis decrying everything as “shitcoins”, the ETH maxis with disdain for other L1s, and the SOL maxis with the “ETH is garbage” tagline are all bad for crypto. The reality is we should all be cheering on and helping each other. The success of one is the success of all.

While the cryptocurrency market presents opportunities for substantial gains, it's crucial to approach it with caution and a realistic understanding of the associated risks. Here are some insights that might contribute to potential life-changing gains in the crypto space :

Educate Yourself:

• Knowledge is key. Understand the fundamentals of blockchain technology, different cryptocurrencies, and the underlying factors that drive their value. Continuous learning can help you make informed decisions.

Diversify Your Portfolio:

• Diversification is a risk management strategy. Instead of putting all your funds into one cryptocurrency, consider spreading your investments across different assets. This can help mitigate the impact of poor performance in a single asset.

Long-Term Perspective:

• Cryptocurrency markets can be highly volatile in the short term. Having a long-term perspective and holding onto your investments through market fluctuations may increase the potential for significant gains.

Risk Management:

• Only invest what you can afford to lose. Cryptocurrency investments should be treated with caution, and it's important not to risk more than you can afford to lose, especially given the market's volatility.

Research and Due Diligence:

• Before investing in any cryptocurrency, conduct thorough research. Understand the project's purpose, technology, team, and community support. A well-researched investment is more likely to yield positive results.

Stay Informed:

• Cryptocurrency markets can be influenced by news and events. Stay informed about market trends, regulatory developments, and technological advancements. This knowledge can help you make timely decisions.

Timing Matters:

• Timing can be crucial in the crypto market. Consider market cycles, historical price movements, and potential catalysts. While timing the market perfectly is challenging, being aware of market trends can be beneficial.

Secure Your Investments:

• Use secure wallets and exchanges to protect your assets from theft or hacking. Implementing security measures, such as two-factor authentication, is essential to safeguard your crypto holdings.

Understand Market Psychology:

• Cryptocurrency markets are influenced by human psychology. Fear, uncertainty, and greed can drive market movements. Understanding market sentiment and emotional cycles can provide insights into potential entry and exit points.

Adaptability:

• The crypto landscape is dynamic. Be adaptable and open to adjusting your strategy based on changing market conditions, technological advancements, and regulatory developments.

Participate in Promising Projects:

• Look for projects with strong fundamentals, innovative solutions, and real-world applications. Participating in promising projects with solid use cases may increase the likelihood of significant gains.

Conclusion :

To be clear, despite all of these difficult truths, I could not be more bullish on the future of cryptocurrency.

Crypto will cure much of the disfunction in the world; the malinvestment and rot that comes from over-regulation and state-controlled Fiat money. For crypto to reach its full potential, and for us pioneers to benefit from our early participation, we must acknowledge those difficult truths while simultaneously being unafraid to jump into this misunderstood nascent technology head first.

This bull run will be a rollercoaster of ups and downs but will be the largest one to date by capital inflows by far. We are nearing the late stages of the parabolic adoption of crypto, and the next cycle or two are your last best chance to become independently wealthy.

Your optimism and bullish sentiment on the future of cryptocurrency are not uncommon. Many individuals and investors share a positive outlook on the potential of blockchain technology and digital assets despite the challenges and uncertainties in the space. Here are a few reasons why people remain optimistic about the future of cryptocurrency:

Innovation and Technology:

• Blockchain technology, the underlying technology of cryptocurrencies, has demonstrated its potential to revolutionize various industries beyond finance. Innovations in decentralized finance (DeFi), non-fungible tokens (NFTs), and other blockchain applications continue to emerge.

Global Financial Inclusion:

• Cryptocurrencies have the potential to provide financial services to individuals who are unbanked or underbanked, offering a means of financial inclusion on a global scale.

Decentralization and Security:

• The decentralized nature of cryptocurrencies makes them resistant to censorship and interference from central authorities. This aspect is appealing to those who value financial sovereignty and security.

Evolving Regulatory Clarity:

• As regulatory frameworks around the world develop, there is potential for increased institutional participation and mainstream acceptance of cryptocurrencies. Regulatory clarity may also enhance investor confidence.

Blockchain Use Cases:

• Beyond cryptocurrencies, blockchain technology has practical use cases in supply chain management, healthcare, voting systems, and more. The potential for blockchain to optimize and streamline various processes is a driving factor for optimism.

Community and Developer Support:

• Many cryptocurrency projects have strong communities and dedicated development teams. The collaborative nature of these communities contributes to ongoing improvements and advancements in the technology.

Macro-Economic Trends:

• Economic uncertainties, inflation concerns, and global macro-economic trends can drive interest in alternative assets like cryptocurrencies, which are often seen as a store of value and a hedge against traditional financial risks.

Increasing Institutional Involvement:

• Notable institutions and corporations are showing growing interest and involvement in the cryptocurrency space, whether through investments, partnerships, or the development of blockchain-based solutions. This may contribute to greater market maturity.

Public Awareness and Adoption:

• Increased public awareness and acceptance of cryptocurrencies contribute to their adoption. As more people become familiar with and use digital assets, the overall ecosystem may continue to grow.

Technological Improvements:

• Ongoing technological advancements, such as the development of more scalable and energy-efficient consensus mechanisms, aim to address some of the current challenges and limitations in the crypto space.

It's important for individuals to make informed decisions based on their own research, risk tolerance, and investment goals. While there are certainly challenges, the optimism surrounding the potential of cryptocurrency to reshape various aspects of the global economy and technology landscape remains a driving force for many in the community.

“We do not err because truth is difficult to see. It is visible at a glance. We err because this (fantasy) is more comfortable.” ~ Aleksandr Solzhenitsyn

Good luck out there, and see you on the next one!