Cryptocurrency And Blockchain Investing Similar To Venture Capitalism

If you have invested even $1 into cryptocurrency, or am thinking about it, or have dived deep into it, you are considered a crypto/blockchain venture capitalist.

What is a 'Venture Capitalist'

A venture capitalist is an investor who either provides capital to startup ventures or supports small companies that wish to start and/or grow banks and financing, or for some reason, don't want to.

Venture capitalists are willing to invest in such companies because they can earn a massive return on their investments if these companies are a success.

Venture capitalists also experience major losses when their picks fail, but these investors are typically wealthy enough that they can afford to take the risks associated with funding young, unproven companies that appear to have a great idea and a great management team.

Venture Capitalism, is the act and activities of private equity, meaning that it's from individual, or multiple individuals forming a group, to finance small, early stage, emerging enterprises that are deemed to have high growth potential, or have shown high growth in terms of revenue, hires, reach, etc.

Venture Capitalists invests in such early stage companies in exchange for stake, ownership, equity and profits/dividends from the companies they invest in...but of course, eyes wide open - there is a risk that you can take on financing risky start ups in hopes that some of the cryptocurrencies and blockchain enterprises you invest in become successful.

If the cryptocurrency or blockchain enterprise you had invested in becomes successful, you can either exit (sell it) as price rises, or receive profits/dividends in cryptocurrency.

Of course, if it tanks/fails, the value may decrease, and disappear completely. And in today's market, more than 95% of Initial Token / Coin Offerings (ICO, which is equivalent to Initial Public Offering in the physical world) are outright shitcoins, deadcoins and scams.

So never, never rush to invest in bitcoin, cryptocurrency or anything in general. Research, read the reddits and connect with other people. Understand the whitepaper, and look for solid and experienced teams.

Remember, always invest for:

  • the long term
  • functional - does the cryptocurrency/blockchain enterprise solve a real problem in the real world or in crypto?
  • limited amount of coins/tokens

You should only always invest amounts that you are willing and able to lose.

blockchain enterprises versus blockchain cryptocurrencies

Basically, there are few things to clarify here:

  1. the underlying technology is called blockchain
  2. the blockchain technology can be applied to create cryptocurrencies (digital currencies such as Bitcoin and Alternative (ALT) coins such as Zencash, Electroneum etc) or
  3. enterprises that creates utility tokens using blockchain technology, that is used to power and run their enterprise, such as Funfair tokens
  4. enterprises to create businesses that/whose processes run on blockchain to decrease costs, risks, processes - using the smart technology of blockchains such as platforms like COSS, Kucoin, Dentcoin etc.

So basically when you invest, you invest generally into blockchain technology as a whole, and #2, #3 and #4 happens when blockchain technology is applied to currency and utility.

is it safe?

The technology itself, though it's fairly "new" (written and thought about in early 2000; Bitcoin was created in 2009), and there is so much to discover how to apply and grow and build it - it is a technology.

Used well, it's amazing.

It can save millions or billions of dollars with its cost savings (think of it as AI technology that helps to automate anything online), it can save lives if applied well, and can make investors very rich.

However, when used by less-than-honest/good people (especially those who are outright wanting to scam you), that will make it less safe. This is the reason why I say again and again to research first, and do not rush to buy stuff, because of what people say or market momentum etc.

It can also make people paranoid when they have too much money (if they're not ready for it), or suffer emotionally (especially with market ups and downs, or if the stuff they bought crashed/lost value...or if they get scammed).

REAL PROBLEM: Most of us aren't trained as venture capitalists

This is a real problem, because most of us aren't trained or sophisticated venture capitalists, or savvy investors (of course, blockchain is relatively new at this point in writing), that may cause us to

  • be distracted by wrong news (we see this all the time)
  • lied to by less-than-honest blockchain groups and more
  • we may not know how to research and understand what the application is for
  • we may not know if the application is even good or beneficial
  • we may "follow the crowd" (to the slaughterhouse)...

...but I'm still here to read, research, interact with the blockchain investing world.

I've lost a lot, but in my "losing" I've earned back what I've lost multiple times over, as well as understanding what is good and what is not good (potentially).

In my experience so far, it seems that the ability to:

  • understand fundamentals of the enterprise (what it solves, and is its solution good; as well as is its team good)
  • understand a little about "buying during dips" or just hold (hodl for those in this area)

it is here to stay

Regardless of what we think or feel about it, blockchain technology and its resultant application to creating cryptocurrencies, blockchain enterprises and utility tokens will continue to grow.

As governments research and understand it better, it will increasingly become mainstream, and become part of our lives, especially by 2020.

Might as well research it ourselves and become pioneers and early adopters now.

Where to next?

Head to Home Page

Start with these:

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  3. FIRE 101 and
  4. The Passive Income Lifestyle Framework.

They are my recommended to start with articles that ties in the entire framework, philosophy and working model of FIRE Lifestyle

Save-Earn-Invest More Articles

  1. Ruthlessly Cull Unnecessary Expenses
  2. Respect The $10s
  3. Small Tweaks To More $10s
  4. $150K+ By 35 - Reality Or Delusion?
  5. Start An Online Side Hustle With Solo Build It
  6. Start Investing For Passive Dividend Income In Just 3 Days
  7. How To Retire With $3 Million
  8. Invest To Spend On Luxury & Liabilities (Whatever You Want*)
  9. Shocking Maths Of Early Retirement (It's Less Than You Think)

See more Save, Earn & Invest More articles here.


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