I’m a crypto investor. I’m not a trader, so I’m not looking for high volatility coins which I can jump into and back out of for short-term profits. I look for long-term projects which will increase in value at the lowest possible risk, those are what I try to invest in.
This is no easy task, but it’s one which I enjoy. Because I enjoy it and because it’s important to me, I put a lot of time and effort into tracking the crypto markets; not just price movements, but researching the fundamental aspects too. The term “a lot” is relative – let me qualify it in my terms. I spend the majority of my day, every day, researching crypto from right after breakfast until I go to bed at night. I don’t only research crypto, but crypto does get the lion’s share of my attention. I probably spend at least 5 hours (often far more) on crypto related matters.
I’ve invested in a lot of cryptocurrencies. Let me qualify “a lot” once again: I’m currently holding 74 different coins and tokens in my own portfolio. In the past I have bought and sold numerous others. I estimate that I’ve held about 100 different cryptos at some or other stage, that isn’t including all the minuscule airdrops into my Ethereum wallet or exchange accounts.
Because of this I’m rather impartial to what I buy from a “loyalty” aspect. I know a lot (by now you know what “a lot” means in my terms) of information about many different coins, particularly the well known ones.
It is from this perch of objectivity that I perceive a disturbing trend. It may not be news to you, but I think you’ll find that you’re blinder to it than what you believe you are.
Experiences and Perceptions:
I’ve been blogging for over a year now. I started on STEEM via Steemit, migrated to STEEM via TIMM and now I can also be found on EOS via Trybe. Obviously I’ve interacted with the local communities on those platforms. Of course I also continue to interact with other crypto groups that aren’t related to blogging. Worryingly, what I am seeing, especially within the blogging communities, is what I call “Crypto Tribalism” (that name is not related to the Trybe platform).
What is Crypto Tribalism?
On the STEEM platform I have noticed a trend amongst the community members – strong loyalty to STEEM. This is neither unexpected nor “bad”, but I did have to raise my eyebrows when I noticed how strong it was. A disproportionate number of crypto posts revolve around STEEM (and SBD). While I suspect that many of them are in an attempt to cash in on the votes of loyal STEEM users, others are clearly out of loyalty to STEEM. For similar reasons, STEEM users tend to buy disproportionate amounts of STEEM. Honestly, I find this worrying.
I think that crypto investors would do well to consider that they are the ones investing in the crypto, the crypto does not invest in them! You don’t get any points for “loyalty” in the crypto game. Yes, you often get rewarded for holding a certain amount of something or for staking something, but that’s not loyalty, that’s bribery! Any and every half-decent crypto should want to grow. Incentivising users is one way to do this and is totally valid,
Incentives only grow the numbers, they don’t directly make the platform better. What do you want to invest in, a platform that strokes your ego and bribes you, or a platform that is more focussed on self-improvement? STEEM is good example of this, the glaring abuse of the rewards system is well known – bots and whales stand as barriers to entry to newcomers. Yet the platform seems more concerned about placating its relatively few “rich” members than about developing as a product. I know it updates now and then, but has the system changed fundamentally in the year I’ve been using it? Nope.
Having shifted over to Trybe, I have now encountered the EOS community. I see a repeat of the exact same thing that I saw on STEEM. Posts about EOS, everyone discussing EOS and speaking about it in glowing terms, as if it were the be all and end all of the crypto world. Sorry guys, but it isn’t. EOS is just another crypto platform, and an over-hyped one at that. It’s Larimer’s third attempt at a crypto platform, yet still suffers from the same horribly overly complicated economy and token system as what BitShares and STEEM do. Honestly I found BTS easier and more intuitive to use than EOS, despite my crypto inexperience when I bought BTS – how can that be? Yes I realise that the back-ends are vastly different. I’m not trying to say that EOS is bad, it isn’t. I’m trying to say that it’s not the sole future of crypto, that it has its faults and that right now it is evidently one of the most over-hyped coins on the market, no matter how well it may be performing.
Cardano is great example of loyalists who just won’t let go. This peer-reviewed, cryptographically superior coin gained great ground during its hype phase (which looks like it may have just started to repeat itself). The ADA community sunk its teeth deep into the coin and didn’t let go, even when they perhaps should have. Compared to its peers today, Cardano is way behind where it should be and has already suffered a rather scandalous history. Once again, this doesn’t make it “bad” per se, but why “remain loyal” to it when you could have hopped over to a better platform? Do you expect Charles Hoskinson to give you a call and say: “Thanks for holding your ADA, you saved us and shall be rewarded.”? ADA’s reputation took a knock and it got left behind. I used to hold it, now I don’t. I would consider going back to it if it caught up to the rest, but at the moment that possibility is not looking very promising. It’s probably a good long-shot investment, though personally I already have more than my fair share of those.
Possibly the very best example of Crypto Tribalism is the XRPArmy. Need I say more?
I’ve already told you that I dumped ADA. I’ve dumped many coins. If they fall out of favour with me, I don’t cling onto them, write glowing posts about them and tell everyone how great they are – I dump them.
- LTC – ROI wasn’t looking good enough
- WAVES – wasn’t going anywhere relative to the competition
- BTG – became unimpressive
- QSP – started looking doubtful
- BAT – oops, shouldn’t have dropped that one
- MCO – oops, shouldn’t have dropped that one either
- COSS – went through a rough patch
- SALT – lost faith in it
There are many more, and that’s not counting the scams and outright failures I’ve been a part of.
Look, I know what it’s like to favour a coin. When I first read about Electroneum I was ecstatic! I believed it had a grand concept and a real future. I spoke highly and excitedly of it all over the internet. A few months down the line I was bitterly disappointed to see how poorly it was being managed. I dumped it.
Envion was one of my very favourite coins. I had huge ROI expectations for it. I loved my Envion and I invested a small fortune in it. But things turned bad. It was sad, I was very upset, but I knew that I couldn’t stay “loyal to the coin” just for the sake of it. I dumped it. Many people still believe in Envion, including the wonderful team of founders.They hope to resurrect it and have visions of it succeeding. They may one day do that, but I won’t be a part of it.
What does this all mean?
I’m not knocking coin loyalty, provided that it is in moderation. Coins need their communities. they promote it, they grow it, they share information and aid development. But a coin should deserve your support. It (or rather the team behind it) should have to really work for it – by trying to be the best in its market segment.
In some markets there is no clear winner – no problem. I hold Walton and I hold VeChain – neither has an outright advantage so I’m hedging my bets. If one of them gets far behind, I’ll dump it – that simple. I won’t be the guy on the VeChain group bashing Walton or proclaiming that VeChain is obviously superior, that isn’t the case.
This bit is important, pay attention:
As the veteran of many an ICO I know that the more you look into a coin, especially a brand new one, the more attractive it looks. You read all the promises, all the projections, all the hype – and you have no reason to disbelieve it. Joining a related community makes it even worse. You reinforce each other’s biases and become an echo chamber for the same ideas circulating round and round. Criticism is ignored and belongs in the domain of “the haters”, “the rival coin X fanboys” or “those who are uninformed and must do their research”.
Every coin suffers from this, both the best of them and the worst of them. It doesn’t matter which tribe you happen to be a part of, perfectly rational people once believed in BitConnect for the very same reasons that you now believe in your coin. They turned out to be very wrong about their coin, hopefully you will be luckier with yours. Your coin is probably a good one, but make sure that you have checked and verified that!
Don’t go to a Bitcoin Cash group and ask them if Bitcoin Cash is any good. You know they’re going to talk it up! Go to a Bitcoin group, go to a Bitcoin SV group, go to Bitcoin Gold – ask those guys about Bitcoin Cash.
To really declare your coin the best it’s not good enough that you know your coin, you have to know the competition! If you don’t know what their coins can do, then you have nothing to compare your coins to. This is where DYOR really becomes all important, because an comparison table of crypto platforms hosted on a Lisk group is going to show that Lisk outshines the competition. I’ve seen this. I’ve seen charts on Cardano groups which prove beyond a shadow of a doubt that Cardano is actually the better coin. Just yesterday I saw an EOS one, guess which coin it showed was best? Everybody is going to cherry pick the data that reinforces their own biases, be it consciously or sub-consciously.
I’m a NEO fan, unapologetically so. Yes, my coin has its faults too. I do have a NEO bias and Ido have some loyalty towards that platform. This is why: before I got into NEO I researched all the other platform coins, and I did my own comparison. I picked NEO because I saw that it had the best looking future. I didn’t do a cursory study, I did it properly. I didn’t have NEO in mind when I started looking at platforms, I looked at all the big ones (of course in those days it wasn’t called NEO yet). I picked NEO because I evaluated all the coins and decided that NEO was the best of them, which is why I now believe in it. I know the vision, I know the technology, I know the competition.
On it’s own that would not be good enough. The crypto environment is a changing one. I would be shooting myself in the foot if I held onto a coin reliant on 2-year old technology. I also have to make sure that NEO (and my other coins) keep up with the development of the competition. Nobody said that being a good crypto investor was easy…
But guess what? If NEO disappoints me – it’s getting dumped. I don’t think it will, but I’m ready for that possibility and that’s why I don’t buy it anymore. I have enough NEO now and I want to continue to diversify elsewhere. The same goes for my beloved CargoX – if I decide that things are no longer looking good, I will have to wave it goodbye.
You may have gone through the same process of coin selection that I did and come to another conclusion. Perhaps you looked at all the platform coins and decided that Cardano IS the best, or Ethereum, or STEEM. That’s fine. Just make sure that you made that decision on your own, not because a group influenced you to. Make sure your decision is still valid with the current competition. If you’re still in BitShares while Dan is two platforms down the line, you must be asking yourself “Why?”. If you have a valid answer like “I believe that bitGold is the future of precious metals trading because of x, y and z” then good for you. If you don’t have a valid answer then not-so-good for you.
If your coin ever drops you, no matter what it is – be ready to dump it!
Yours in crypto
Attribution: Original picture from Pixabay, modfied by Bit Brain. Crypto emblems from https://www.bitcoincash.org, https://www.cardano.org/en/home/, https://steem.com, https://ripple.com/media-kit/ and https://medium.com/@eosio.
Yours in crypto
“The secret to success: find out where people are going and get there first”
~ Mark Twain
“By this means (fractional reserve banking) government may secretly and unobserved, confiscate the wealth of the people, and not one man in a million will detect the theft.”
~ John Maynard Keynes