How are we to invest in the crypto age?
This is something that we have to take a look at. Like everything, we have to be prepared for cryptocurrency to disrupt any of our models or financial belief systems.
How we invest is certainly something to consider. Some of the old models might be made obsolete.
What we are dealing with is diversification. That brings up the age old question "how diversified should I be"?
This is something that was debated for decades so we cannot answer it in one article. The one thing I do point to is the richest people in the world are usually tied to one company. That is where they made their fortunes.
Therefore, it always way my premise to find a few choices I was optimistic about long-term and go heavy into them. This meant, of course, watching things closely for any changes and liquidating entirely if things turn from the basic premise of what made things attractive.
This is a concept that seems to hold true in crypto. We all see the Bitcoin and Ethereum millionaires. Heck, we even have Splinterlands millionaires too.
But is there another concept that can upend this?
What if, instead of going all-in on a handful of projects, we dabbled in thousands? This makes no sense in the existing financial system yet in crypto it could work. Consider this idea combined with the Decentralized Autonomous Organization (DAO).
Let us call this concept micro-investing.
Here we take a bit of money and throw it at hundreds, if not thousands, of different projects. Naturally there will be some that get a bit more than others. However, we can spread a few dollars around to each.
For example, the idea of "robo-taxis" always interested me. What if that technology comes into being and people buy these vehicles and turn them into DAOs? One could buy a piece of 100 different taxis, each in a different city.
Already on Hive we see dozens of projects that are of interest. The challenge is most of us run out of resources. Can we alleviate this by putting a bit into each? Is that worthwhile?
Obviously, from a diversification standpoint, it would really spread things out. We would be resilient to most anything. Of course, we might be capping our return because no everything will "moon" either.
The idea is to get a little bit of cashflow coming from many different directions. A few cents doesnt mean much until it comes in from 1,000 different places. Then it all starts to add up.
Naturally, some projects will die off. Here again, not too much worry since our exposure is low. We can find that we sleep better knowing everything cannot blow up on us.
Is this a practical approach? At this point it is hard to tell.
However, we each know all the tokens that come in our accounts on a daily basis. Consider all that is dropped each day across crypto. My focus tends to be Hive but there are airdrops going on along with other tokens being issued through a variety of applications.
The digital world makes being a part of many different projects feasible. Are we going to be able to keep tabs on hundreds of projects? Of course not. However, if we are looking at this from the "numbers game" standpoint, we can see how it might be to our advantage.
Whatever the approach, the key is that we have options. Cryptocurrency is providing for innovation. We can take different avenues of testing within our own financial frameworks. Some of it might work, some might not. Either way, we can expand our views to see what we can improve upon.
It is one of the benefits of the digital realm. Our reach is much greater than it was before. Plus, with a blockchain like Hive, where there are no direct transaction fees, we are able to test some of these ideas out.
Just try to do it on Ethereum.
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