Question: If past events replay out exactly the same, wouldn't it be too easy? How could everyone get rich so easily?
Answer: Even if past events (re)play out exactly the same, they would not get rich that easily. It's much harder than it looks.
Independent thinking
Only less than 5% of people can truly think independently, and this ability often requires the following steps:
Build a solid epistemological foundation
Collect raw data
Apply meta-rules to narrow down the strategic scope
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 opinions stand out amidst external noise.
Without this characteristic, you basically have no way to start in the cryptocurrency industry. Even the simplest, most logically related datasets (e.g., LTC charts—the first altcoin, and the 'code' followed by all subsequent coins) may seem as complex as an unsolved mystery to you.
IQ and relationship handling ability
Intelligence, in a sense, is a form of empathy. You need to discern the questioner's intentions and understand the relationships they are trying to convey.
In the cryptocurrency market, the questioner is the entire market's participants. Those with high IQs can quickly discover relationships that others may never perceive.
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 'see' the distribution of emotions, paper profits and losses, and the overall trend behind a chart just by observing it? If so, you can infer future market directions from it.
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: Thinking that their technical abilities can give them a market advantage.
Thought leaders: Despite their high status, their past investment records are abysmal.
Successful people: Like Paul Graham, can he really find the right investment answers?
The eliminated crowd: This happens to almost everyone, just like professional athletes eventually lose their peak state.
Humans inherently have flaws and cannot fully understand and accurately model complex market systems. To avoid these traps, you need strong strategic thinking to help you filter information and allocate its importance.
Risks in execution
Successful execution requires the following basic abilities:
Most people with startup capital are relatively stable in life and cannot easily invest their funds into high-risk cryptocurrency trading.
If you have a fulfilling family life and a respected profession, the potential gains from participating in cryptocurrency trading may be far outweighed by the potential risks.
There are many classic traps in trading that even those with advantages can fall into, such as:
* Treat profits as 'casino money': Truly calm individuals view buying Shiba Inu coins with $300 and seeing it rise to $30 million as completely the same as stacking the same Shiba Inu coins with family wealth of $30 million.
* Take action at critical moments: Similar patterns always repeat in the market. Many people know they are in bad trades or positions but hesitate to act. 'Oh, it dropped 40%... Oh, it dropped 70%... Oh, it has fallen 65% from its historical high... Oh, it dropped 85%... What should I do?'
How to avoid bankruptcy caused by external factors
Looking at the list of large Bitcoin holders, how many do you think still hold their Bitcoin?
Top 500 Bitcoin holders: Top 50
980,000 BTC*. Satoshi Nakamoto
400,000 BTC*. HD Moore (AHA)
400,000 BTC*. Dustin D. Trammell (AHA)
400,000 BTC*. Tod Beardsley (AHA)
350,000 BTC*. "Dread Pirate Roberts" also known as "DPR"
300,000 BTC. Roger Ver
300,000 BTC*. "knightmb"
200,000 BTC. Mark Karpeles
8.5 182,592 BTC. "Loaded"174,000 BTC*. FBI (Federal Bureau of Investigation)
119,000 BTC. 3 members of the AsicMiner management team (specific names unknown)
Common reasons for bankruptcy include:
Hacked
Exchanges misappropriating user assets (similar cases are numerous)
Legal disputes
Tax issues
Why do almost all core figures in the cryptocurrency industry end up either receiving legal subpoenas, disappearing under suspicious circumstances, or encountering scams or arrests?
In fact, preserving wealth is not an easy task. If you want to keep your Bitcoin forever, it seems that 'dying early' 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 opportunities at critical moments.
Many people invest in Bitcoin for reasons like "you can use it to buy coffee" or "to combat inflation," or other trendy sayings that come and go each cycle, but these reasons have not materialized in reality.
If you thought in 2010 or 2012 that Bitcoin was a novel proof-of-concept technology that accumulated real demand through dark web markets, proved its viability, and gradually triggered a series of speculative bubbles, then your judgment was correct.
However, there were not many people holding this viewpoint at that time.
Some people invested in Ether very early simply because their high school poker friends told them it could be used to support decentralized games or other applications. Others believed that Ether would become an unstoppable smart contract platform (until the ETC fork event occurred).
However, these assumptions have hardly ever materialized. The vast majority of early 'whales' either sold their assets at low prices or experienced up to 95% shrinkage in their assets. This indicates a lack of deep understanding of market operations and no clear investment strategy.
This article is authorized for reprint by: (Deep Tide TechFlow)
Original author: Puffy
'Knowing the market rules doesn't mean you can make money? To succeed in crypto investing, you need to have these core abilities first.' This article was first published in 'Crypto City'.
