I recently found out I had made $1300 off of a small investment (I think about $200) in a mining platform a year ago. Needless to say, I was incredibly happy. By sheer luck, I had invested in Dash and Ethereum back when they could be bought for $30 or $40.
Naturally, I immediately began wondering how long it would be until I could retire rich.
Allow me to show your some incredibly chancy math. Let's say I invest $1000 in XRP (Ripple). Let's also suppose I had invested back when it was only $1.10. Further suppose I sold today for about $2.08. That represents an approximate doubling of my investment. It's cases like this that I call a "double", for, well, very obvious reasons.
In the end, I actually only kept 80% due to fees, slippage, and an incredible bout of procrastination. Still, it feels nice to make 80% when you're used to more usual 0.08% rates on a checking account.
Great, so I now have $2000 instead of $1000. How long until I can retire? I am assuming for the purposes of this post that I will need about $1,000,000 to retire. Invested in a good index fund, I will receive an average return of $100,000. If I can manage to live off of $40,000 a year, that leaves a 6% return to continue compounding. Since this beats the average inflation of 2%, I will not have the problem that my capital goes stale.
2000 is a great number because it reminds me of exponential returns. 2000^2 would be $4000, so if I can find another coin that doubles, I will have only $4000. 2000^3 will net $8000, and so on.
2000^10 = 1,024,000.
So I only need to double my money 10 more times to retire. This is ridiculously unlikely. It is far more likely I will have an explosively successful coin followed by a string of bad returns. That's because the law of averages makes it incredibly unlikely that I will have extraordinary results.
But I basically created this money from nothing and I've already withdrawn my investment. This is basically free (hence, gambling) money. I'm letting this be my moonshot.
My next coin is GNT. XRP made me uncomfortable because the market was so close to being the largest. I don't see it overtaking bitcoin for market cap leader. Due to how XRP is distributed, there are more tokens in circulation. An XRP at $20 would be larger than bitcoin and most national economies, something I find out of proportion to reality.
Golem, on the other hand, has some potential for growth. It's a fantastic concept (decentralized internet access) that addresses a real need in the world. It is, in fact, what the internet was originally intended to be before the incursion of advertising and tech giants. At $0.70, it seems to be undervalued compared to the development of coins like Dash or Monero that also provide anonymizing functions. If it reaches $1.40, I'm selling to lock in my doubling.
I could also lose everything. But when you're working with free money, there's no real risk, is there?
