My $100,000 Crypto journey and the lessons it taught me
Lesson: ‘Not taking profits is a sin’
How I got into Crypto?
My first contact with cryptocurrency was when I was asked by my brother to attend a blockchain seminar.
To be honest I was nowhere near understanding what it all meant.
Later my brother talked to me about how he had invested a few dollars in a project called Ethereum that tripled in just a matter of weeks.
At the time this was a big deal. We were spending money on other business ideas but nothing was reaping any revenue.
And here comes cryptocurrency that tripled my brother’s small investment.
You could say this greed got me started which led us to learn more about cryptos, and then came the ICO craze.
Blockchain, ICO’s and smart contracts sounded gibberish
I felt like a new kid at the school. I was not able to understand what blockchain is or what ICO or smart contracts were.
It took me quite a while to understand the concepts of this new technology.
What helped me the most?
I found that the best way to learn about blockchain was to be active in communities such as Reddit, Telegram, Discord.
Slack was quite active back then. And, of course, YouTube helped me gain quite an idea of what cryptocurrency, blockchain and ICOs were all about.
My first ICO
My first experience buying tokens through MyEtherWallet was Aeternity at 30cents per token.
I still remember how MyEtherWallet, Gas, ICO, Ethereum address, Cryptocurrency, Tokens all sounded too alien to me.
Wasn’t pretty sure why the private key was so crucial.
Trust me, it was so easy for anyone to just talk to me into giving my private key, that’s how naive I was back then.
If the current giveaway scams were to happen then I would have handed over my private keys in a jiffy. That’s how naive I was.
Mistakes I made
You could say I have made a lot of mistakes since 2017. There were so many of them that I would have to categorize them.
- FUD Missing out on an ICO
- Lost Keys
- Got lured into scams
- Missed token swaps
- Keeping tokens on exchanges that went down
- My Biggest losses
FUD Missing out on an ICO
2017 saw a sharp rise in ICOs. Projects with half baked whitepapers were selling like hotcakes.
I was part of the investors who had their ETH ready in the wallets to take part in any ICO.
I was ready to invest in projects like Monetha, CargoX and others. They would sell out in a matter of seconds. I felt missing out on these ICOs that 10x’d immediately after getting listed on the exchanges.
Was ICO the best Investment?
In my experience, ICOs yielded great return if you were smart to cash out. Those who held in the hopes of bigger moons lost their money when the project eventually failed.
It is the project development and actual use case that will determine the price to rise or fall.
Projects with a good team that solved a real problem were the only projects that saw some future after the ICO.
Lost Keys – My first Monster mistake
Mistakes are bound to happen, but when it’s a matter of your life savings, it does hurt very hard.
One among many such incidents was Monsterbyte ICO.
I purchased around $500 (In India this is more than 2 months of income) worth of tokens.
I did not pay attention to the mnemonic phrase which was given before creating the wallet for making the purchase.
All I thought was my username and password was all I needed, this grave mistake meant it was impossible to access my tokens.
Looking back, those tokens would be worth nothing over time but when this incident happened it did hit me hard. I lost sleep over this mistake for days.
What happens if I lose the mnemonic phrase?
I know this might sound disheartening, but the fact is there is no way you can retrieve the lost seed or private keys.
Find a way to store them safely as ownership of your tokens depends on your private keys/mnemonic phrase.
Got lured into Scams
2017 was the year of the crypto revolution, or so I was made to believe.
The crypto projects had their community discussions mostly on slack. At this point, the slack was so prone to phishing and was getting hacked easily.
Someone would hack Slack channels and lure the unassuming investors into believing that the team is giving away rewards and free airdrops.
Many fell for this slight of hand. I was one such victim at the time.
Missed Token Swaps
This is something new to any investor in crypto. While I was aware of the mainnet and token swaps, I just missed the boat because I was not paying attention to some random announcement.
As a result, I lost some of my tokens to the mainnet swaps.
In general, the projects give you a certain time frame to swap your tokens with their mainnet tokens and once the time is elapsed then un-swapped tokens will be burnt, in other words are useless.
I missed swapping a couple of projects and lost my tokens.
To avoid this, I suggest you to get on their telegram or social channels from time to time to keep upto date with the project.
My biggest losses
In spite of my due diligence, I did fall for a few elaborate advertising tricks, scams and some projects that never took off. Here are my big bad decisions:
- CoEval (Monkey Capital): This ICO was my second biggest investment in 2017. There was so much promise and hype surrounding the project.
Some websites even regarded it as Platinum ICO. Who knew, you could buy that ‘status’ to screw the investors.
- Bridge Protocol: One of my biggest single investments in any project to date, Bridge Protocol is not a scam but it never took off. It did manage to turn my $18000 into $380.
It is easy to lecture my past self to NEVER go all in. Hindsight is always perfect. However, 3 years later I am still paying the loan that I took to get invested.
- HODLING: While Bridge Protocol is a single biggest investment failure story of mine, it doesn’t come anywhere close to the losses I incurred because of FOMO.
I lost a fortune for not having an exit plan. I kept hodling even when some of the projects I picked 130X. Yes, that’s right. I was so naive in the space that I did not know that I should cash out.
Which is why I say ‘not taking profits is a sin.’ If there is any bigger sin than not taking profits then it is ‘trying to time the market’.
Now, I just have a target price to enter and exit. I am usually on the money with these targets and I simply get out. Never to look back.
This may not be a great strategy but it is a strategy that works for me.
Never trust exchanges
I was too lazy and let my tokens sit on exchange and paid the price.
When Cryptopia shut down it took my tokens with it.
This is not an exchange problem though.
It is a problem of not having discipline when I knew the crypto commandment: “not your keys, not your tokens.”
Even the biggest exchanges are not safe to hold your crypto.
Exchanges are just meant to trade your crypto and once done you have to safely move your tokens to a wallet that has your private key.
Jackpots I hit and the Coins that went Boom
My story is not all doom and gloom.
In 2017, I got into ICOs like ICON and Bitquence.
The ICON was sold around $0.11 per token in ICO and it went up to $12.64 during the bull run. However, I did not cash out.
Bitquence which is now called Voyager was sold at $0.04 per token during ICO and it went up to $10, which is a staggering 250X. And I did not cash.
I was fortunate enough to subscribe to Ontology airdrop and got free 1000 tokens. At one point, these free tokens were worth $10,000.
As you may have guessed, I did not cash out.
You could say I used to suffer from a serious case of FOMOtitis.
The Golden rules of Crypto
When all is said and done. While I am sad that I did not cash out when I should have or avoided the investments in scammy ICOs, I do not regret my journey so far.
In the past 3 years, I have grown as an individual and never had a boring day, thanks to the Cryptos.
Even those who are making millions may not say that they never had a boring day with the same gusto, sincerity and confidence that I can.
Crypto continues to educate me and I am wiser because of it.
I am passing on my hundreds of thousands of dollars worth lessons that I learned so far below.
Not to preach you. No. Just for your consideration or amusement or both.
FOMO – Don’t fall for the hype
If it is too good to be true, especially in the crypto space, it may not be true. Tread carefully.
Lack of research is the number one reason why people fall for FUD.
If the fundamentals are strong and nothing indicates otherwise, there is simply no reason to fall for FUD.
Another thing is to always have target entry and exit prices. If you are in something for the long-haul then always use the ‘dollar cost average’ to keep stacking.
It is a better strategy to accumulate over time instead of buying all at once. If you get lucky, you could buy all in at a low price but what if the prices go even lower?
Dollar cost averaging seems to address that issue.
Once you have set the target for entry and exit, always execute on it. Never let your emotions come in between your trades.
You can pour your heart into a project but always trade with your mind.
Here is an article on FUD and FOMO you could benefit from.
Other lessons I have learned include:
- Invest only what you afford to lose
- DYOR before investing
- Have an entry and exit targets and execute on them (yeah, I know, it bears repeating)
- There are no free lunches – never fall for free giveaways
- Until the crypto space figures out a way to avoid this misfortune for investors, stay up-to-date on projects so you don’t miss on the swaps
- Never trust exchanges
- Always have two factor authentication
- Keep track of your trades and get your taxes done.
Taxes, do not forget them
Keep track of your trades for taxes
- If you think you can track your trades manually, think again
- Use crypto tracking and tax calculator software like Cointracking.info
- Do not try to evade taxes, millions are not worth your peace of mind
- Although death and taxes are not inevitable – only one of them you can anticipate
It is easy for someone reading this to pity me. Please do not. I was sad for sometime but I never regret my crypto journey so far. In fact, I am more excited now than I was in 2017.
Why shouldn’t I be? I have the life lessons to carry me through now.
Thank you for reading and sharing this article. Stay safe and healthy!
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