Author: Puffy
Compiler: Deep Tide TechFlow
Independent Thinking
Only less than 5% of people can truly think independently, and this ability often requires the following steps:
Establish a solid epistemological foundation
Collect raw data
Apply meta-rules to narrow the scope of strategies
Clarify the relationships between things
These steps are very difficult for most people. They have never tried, do not know where to start, have no relevant experience, and lack the confidence to make their views stand out amidst the noise from the outside.
Without this trait, you basically can't get started in the cryptocurrency field. Even the simplest and most logically related datasets (like the LTC chart—the first altcoin, and the 'codex' that all subsequent coins follow) may seem as complex as an unsolved mystery to you.
IQ and Relationship Management Skills
Intelligence, in a sense, is an empathic ability. You need to infer the intentions of the questioner and understand the relationships they are trying to convey.
In the cryptocurrency market, the questioner is the entire market participant. Those with high IQs can quickly discover relationships that others may never notice.
For example, trying to explain the equation 3x = 6 to a dog is meaningless, as it cannot understand abstract concepts like 'dividing both sides by 3'
Similarly, can you, by observing a chart, 'see' the distribution of emotions, the paper profits and losses, and the overall trends behind it? If so, you can infer the future direction of the market.
Strong Strategic Thinking (Meta Game)
Many smart people can think independently and discover relationships, but their overall strategic thinking is very weak.
Here are some typical failure cases:
Developers: They think their technical skills will bring them a market advantage.
Thought Leaders: Despite their high status, their past investment records are dismal.
Successful Individuals: Can people like Paul Graham genuinely find the right investment answers?
Eliminated Groups: This happens to almost everyone, just like professional athletes eventually lose their peak state.
Human beings are inherently flawed and cannot fully understand and accurately model complex market systems. To avoid these traps, you need strong strategic thinking that helps you filter information and allocate its importance.
Risks in Execution
Successful execution requires the following basic abilities:
Most people with seed capital are relatively stable in life and cannot easily invest their funds into high-risk cryptocurrency trading.
If you have a happy family life and a respected career, the potential gains from participating in cryptocurrency trading may be far lower than the potential risks.
There are many classic traps in trading that even those with advantages can fall into, such as:
Viewing profits as 'casino money', trying to find a person with rock-solid willpower who can hold the same attitude when spending $300 to buy SHIB (Shiba Inu coin) and hyping it to $30 million as they would when transferring $30 million of family assets to purchase the same amount of SHIB.
Taking action when needed; every market repeats the same patterns. People 'know' they are in a bad trade, a bad position, a bad situation, but they do nothing. 'Oh, it fell 40%, oh, it fell 70%, oh, it fell 65% from the all-time high (ATH), oh, it fell 85%, what should I do??'.
How to avoid bankruptcy caused by external factors
Looking at the list of major Bitcoin holders, how many do you think still hold their Bitcoin?
980,000 coins, Satoshi Nakamoto.
400,000 coins, HD Moore (AHA).
400,000 coins, Dustin D. Trammell (AHA).
400,000 coins, Tod Beardsley (AHA).
350,000 coins, 'Dread Pirate Roberts' aka 'DPR'.
300,000 coins, Roger Ver.
300,000 coins, 'knightmb'.
200,000 coins, Mark Karpeles.
182,592 coins, 'Loaded'.
174,000 coins, FBI (Federal Bureau of Investigation).
119,000 coins, 3 members of the AsicMiner management team (specific names unknown).
Common causes of bankruptcy include:
Hacked
Exchange misappropriating user assets (similar cases are numerous)
Legal Disputes
Tax Issues
Why do almost every core figure in the cryptocurrency field either receive legal subpoenas, go missing under suspicious circumstances, encounter scams, or get arrested? In fact, preserving wealth is not easy. If you want to keep your Bitcoin forever, it seems that 'dying young' is the safest method (this is ironic).
So how do people get rich through cryptocurrency?
Most people who became rich through cryptocurrency actually have a significant misunderstanding of the market, but they happened to seize the opportunity at a critical moment.
Many people's reason for investing in Bitcoin is 'you can use it to buy coffee' or 'to combat inflation', or other sayings that become popular in every cycle, but these reasons have not actually materialized.
If you thought that Bitcoin was a novel proof-of-concept technology in 2010 or 2012, accumulating actual demand through dark web markets, proving its feasibility, and gradually triggering a series of speculative bubbles, then your judgment was correct. However, not many people held this view at the time.
Some people invested in ETH very early simply because their high school poker friends told them it could support decentralized games or other applications. Others believed ETH would become an unstoppable smart contract platform (until the ETC fork event occurred).
However, these ideas hardly ever came to fruition. The vast majority of early 'whales' either sold their assets at low prices or experienced asset shrinkage of up to 95%. This shows they lacked a deep understanding of how the market operates, let alone a clear investment strategy.
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