I Thought I Was So Smart
Damn you, cryptocurrency market! I thought I was so smart buying in a week and a half ago when I thought the market dropped and it just keeps dropping. I am as invested as I want to be. However, I ask myself the same question on everyone's mind: will the market rebound? If so, when?
It Will Bounce Back
I think it will, but when? Some people see this as an amazing buying opportunity, but what if the prices drop again in a week or two weeks? I have a few dollars in savings, but do I want to risk them all during a time when my other investments (Nasdaq, S&P) are also tanking? (No. I do not.)
Every time the crypto market has looked bleak, ugly, and depressing in the past, there has come a time that those "depressing" prices have bounced way up. However, at the same time, some altcoins do not make it. I don't know whether it takes a genius or an idiot savante to know which ones will be okay. I think a set of dice, tarot cards, or a crystal ball are as useful tools as any other DYOR, but that might account for my lack of profound wealth.
What is DYOR, Really?
Seriously, though, I read this DYOR all over the place. But, how does one DYOR? Look at the market cap? The trading volume? The cute little icon? Some people say the team behind the project should not be anonymous (although there are legit projects that have made me money with anonymous teams). Others say you should look at the level of centralization or token distribution (both of which can be advanced to research).
Some people just read articles or watch YouTube videos, but that seems like an invitation to shillers and scammers. There is sometimes a complex network of people pushing a coin and they all have an agenda.
Whitepapers: What are They Good For?
Then there's the whitepaper and/or the litepaper. I don't want to be crass and say what I think whitepapers are good for. I have a degree in computer science and, most of the time, whitepapers make little to no sense to me. So, allow me to be like that child in the story "The Emperor's New Clothes" and say that whitepapers tell us little if anything.
What's wrong with whitepapers? First of all, many times, they are full of hype and promise -- here are the amazing things we will do! However, they don't always say when or how they will do these things.
I could easily make a website and write a whitepaper that says I will use a spinning wheel that I designed specially to spin straw into gold. Invest early! Ha ha.
Seriously, that is how many whitepapers seem to me. Some are slick marketing documents. Others are technical briefs (or not so briefs). And some are more detailed and comprehensible than others, of course. There are people whose whitepapers are not just complex smoke and mirrors.
I am invested in Wonderland Time. It might be a bad example because I keep waiting for the other shoe to drop, wondering if it is a scam. I read their whitepaper. It made no sense to me.
What Does It Mean When Something Seems like Nonsense?
When something makes no sense, people often assume they were not smart enough to understand it and so they don't admit it. I try to ask myself whether I need to learn more, ask someone smarter to explain it to me, or whether it just did not make any sense. It's often hard to know. This is especially true if the author of the whitepaper is skilled in the art of obfuscation, which most of them seem to be.
I read a post in the cryptocurrency subreddit a couple of months ago that compared projects based on their whitepapers. It was an interesting post until I realized that the author had not actually read the whitepapers. He was comparing their surface readability and complexity. This made me wonder if anyone does a serious read of these whitepapers, despite what people say.
I am not a genius, but I am reasonably intelligent. My computing skills are rusty, but I know much more than the average Joe. I think, honestly, if most whitepapers go over my head, I don't know if most people would understand them. Maybe that is an arrogant assumption. I suspect it is more likely that these papers are deliberately obfuscated. Either way, they seem like a poor and biased tool in DYOR.
Conclusion
In an unregulated industry rife with scams and volatility, what is left? How does anyone DYOR? Do people have methods that I simply don't know about?
I think DCA (dollar cost averaging) is a winning strategy, but, sadly, I don't have any further funds for investment. Even if I did, I would need funds to invest on a regular basis, which I don't have at the moment.
However, maybe that can be a goal for 2022: to come up with a way to find a small amount of money to invest on a weekly or other regular basis.
Meanwhile, like everyone else, I wonder how much colder this crypto winter will get. I am grateful that I don't require my funds in the near future and can afford to HODL.
By the way, if you have a brilliant DYOR method and you are sitting there thinking, "Harlow, you are doing it all wrong," please tell me. I am open to correction! I would love to know what I am doing wrong. It's always upsetting short term to realize that you have been totally messing things up, but, long term, it is better to realize your errors and change your strategy. That is how I see it, anyhow.
Image created by the author in Canva.