The rocky journey of buying coins as a newcomer to the crypto world
Hello everyone, I am Brother Yan, once an ordinary office worker. Five years ago, I was a novice in the crypto world. At that time, everyone was talking about Bitcoin, Ethereum, and various coins I had never heard of, like Dogecoin and Shiba Inu Coin. Every day, I saw people in my social circle flaunting their profits, turning hundreds into thousands, and thousands into millions. I thought to myself, 'Wow, isn't this the password to financial freedom!' With a bit of a gambler's mentality, I impulsively stepped into the legendary 'crypto world.'
But reality didn’t give me any sweet rewards. After buying Bitcoin, its price dropped; after switching to a new emerging coin, it didn’t rise. As a result, within three months, the money I invested had shrunk by half. It was only then that I realized the world of cryptocurrency was far more complicated than I had imagined. I needed to figure out what was driving these coin prices, what blockchain, Web3, ecological chains, and primary markets were, and how they related to each other, and why so many people believed they could change the future.
Thus, I embarked on a new journey - a journey to explore the underlying logic of the blockchain world. Today, I will share with you my learning and exploration experience, using the simplest words to explain how these seemingly distant concepts actually work.
1. What are the Crypto World, Blockchain, and Web3?
1. The Matters of the Crypto World
First of all, the crypto world is actually a world of various cryptocurrencies. Just like we have the stock market for trading stocks, the crypto world is an independent financial system with various coins, such as Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE), and so on. The prices of these coins fluctuate daily, sometimes rising to exciting heights, and sometimes falling to heartbreaking lows.
But what exactly is behind these coins? In fact, they do not just appear out of thin air; they are based on a technology called blockchain.
2. Blockchain - The Cornerstone of the Crypto World
When I started learning about blockchain, my mind was also boggled. Someone told me, 'Blockchain is a decentralized distributed ledger.' What? It sounded dizzying.
Later, I finally understood a relatively simple analogy: blockchain is like a ledger that everyone can see. Each block is like a page in the ledger, with each page recording some transaction information. After a certain period, a new page (i.e., a new block) is added to the ledger, tightly linked to the previous pages - this is the origin of the name 'blockchain.' Moreover, everyone has a copy of the ledger, and no one can casually alter it. This mechanism ensures the transparency and security of information.
On this ledger, everyone can record various transactions and data, and coins like Bitcoin and Ethereum are the earliest 'entries' on the blockchain ledger. Thus, the technology that the crypto world relies on is actually blockchain.
3. Web3 - The Future of the Internet?
So what is Web3? You may have heard terms like Web1 and Web2. Simply put, Web1 is a read-only internet where everyone could only view content on web pages; Web2 allowed us to interact, enabling likes, comments, and selfies on social media.
When it comes to Web3, it is an internet that belongs to the users. Each of us can own our data and participate in platform governance, rather than having all data controlled by a few giant companies as it is now. It gives you more control over the internet and even allows you to earn by participating.
The foundation of Web3 is blockchain, as its decentralized nature ensures that user data cannot be monopolized by any centralized platform.
2. The Relationship Between Ecological Chains, Primary Markets, and Blockchain
1. Ecological Chain - A Thriving System
After understanding the basic concepts of blockchain, I began to notice an interesting phenomenon: many projects started to build their own ecological chains. What is an ecological chain? Simply put, it is a blockchain system on which many projects and applications exist, sharing the same underlying blockchain resources and technologies.
For example, there are thousands of applications on the Ethereum ecological chain, including various DeFi (decentralized finance) and NFT (non-fungible token) platforms. They are all 'parasitic' on the large Ethereum network, utilizing Ethereum's smart contract capabilities to operate. It is like a forest, where Ethereum is the land, and the various applications on the ecological chain are like the trees, animals, and plants in the forest.
Different blockchains will also have their own ecological chains, such as Polkadot, Solana, Avalanche, etc., each with its own projects and developer communities. The existence of ecological chains transforms blockchain from just a bookkeeping system into a platform capable of supporting various applications.
2. Primary Market - Opportunities for Early Participation
Next is the primary market. This term may sound complex at first, but it is similar to IPOs in the stock market. The primary market is where blockchain projects are just starting out and haven’t yet launched on exchanges, allowing investors to invest through private placements, seed rounds, and other methods.
I found that many promising blockchain projects often have very low prices in the primary market. This is the secret behind those so-called 'early angel investors' making big money. For instance, some DeFi projects or emerging blockchain ecosystems raise funds in the primary market to develop their projects, allowing investors to enter early. If the project succeeds and goes live on exchanges (like a company going public), the token price might increase significantly.
But this also means high risk, as primary market projects are not fully established, and the failure rate is high. For ordinary people like me, investing in the primary market feels more like a gamble, requiring sufficient knowledge and risk awareness.
3. Interactions and Future of Blockchain - How They Change Society?
1. How do blockchain, Web3, and ecological chains interact?
You may ask how these concepts fit together and how they are related to each other. Let me explain in the simplest terms.
Blockchain is the foundation of the entire Web3 world, providing a decentralized trust mechanism that ensures the security and transparency of all data through consensus algorithms.
Ecological chains consist of various projects and applications developed on blockchain, such as DeFi, NFT markets, games, etc.
Web3 is a broader concept that describes a vision of a decentralized internet, where all applications are based on blockchain, returning data control to users.
The crypto world encompasses a series of markets and activities centered around cryptocurrencies, with its value also based on blockchain technology.
The primary market refers to the early fundraising stage of these blockchain projects, where investors can position themselves before the project goes live.
These concepts are like different parts of a machine: blockchain is the engine, Web3 is the internet vision it drives, the ecological chain is the complex system within the machine, the primary market is the initial investment needed to build the machine, and the crypto world is the energy fluctuations generated after the machine starts running.
2. Benefits and Drawbacks
Benefits: The greatest benefit of blockchain and Web3 is decentralization and the reconstruction of trust. It gives users control over their data, making transactions transparent and without intermediaries. Additionally, it brings financial inclusion; for example, DeFi allows many who cannot access traditional financial systems to lend and invest.
Drawbacks: However, it also has downsides, such as excessive volatility. Prices in the crypto world are easily influenced by market sentiment, leading many to become rich overnight and lose everything just as quickly. Furthermore, the decentralized management approach may lead to governance difficulties, with some projects lacking effective oversight and efficiency during execution.
4. Future Development Trends and Opportunities for Ordinary People
1. Future Trends
Through this period of learning, I believe that blockchain and Web3 will become an important part of the future internet. We can see that more industries are beginning to incorporate blockchain technology, such as finance, art, gaming, supply chains, and even many countries are starting to consider launching their own digital currencies.
In the future, as technology continues to mature, the use of blockchain will become more widespread, and a decentralized internet will gradually become the norm. The world of Web3 will no longer be monopolized by a few large companies, and everyone will be able to control their identity and data on the internet.
2. Opportunities and Impacts for Ordinary People
So, what value can we, as ordinary people, gain from this?
First and foremost, education and learning are crucial. Blockchain and Web3 are emerging fields, and if you can understand their underlying logic, you can find many new opportunities. For example, you can participate in the governance of decentralized projects, earn governance tokens, or become a miner to provide computational power to the blockchain network.
Secondly, rational participation in the crypto world and primary market is essential. For ordinary investors, the most important thing is to control risks and not blindly chase after high prices. You can start by learning about some basic projects, like Ethereum, Polkadot, and other projects within their ecosystems, and choose a few that you understand and believe in for small-scale investments.
Brother Yan's Learning Journey and Future Expectations
My learning experience with blockchain and Web3 has indeed given me a different understanding of this world. I am no longer that naive person dreaming of getting rich overnight; instead, I realize that blockchain is a long-term revolution that will reshape our financial system, internet structure, and even our way of life.
If you are also interested in blockchain and Web3, my advice is: learn first, then participate. This is not just an investment adventure; it is also a journey to understand the future. May we all find our place in this decentralized new world and seize our opportunities.
