Hello again, Anon.
We have set ourselves up for a good foundation at this point. The broad format on this substack is intentionally made to reference any of this in the future, and send to someone who should understand the basics. We know there is a large “knowledge gap” and I want to help get people up to speed, and “Getting off Zero”. Anyone will be able look back on these posts at any time.
This week I am going to help you all get started. Anyone who is serious, and smart, is getting involved. Effectively getting off zero ASAP.
It’s at the point now where people are starting to catch on. Keep the idea that this is like a “sprint to the starting line, and a marathon to the finish.” Have haste in the beginning, and keep your mind open + on the big picture. Long term, forward thinking people who are open minded are going to prosper.
Top 10 Rules
These rules are here to get people thinking about what they need to do, and what they need to know in order to get started. These are all important and need to be in the spotlight.
These are the top 10 rules for anyone. All are designed for long term strategy.
Own a Hardware Wallet
This is simple. If you’re going to buy crypto you are going to use a hardware wallet and hold the keys to your coins. This makes you the *owner*. Do NOT hold and keep your coins on the exchanges. (Under no circumstances will you deviate from this rule).
Hopefully, you listened when I told you to “get off zero” and own BTC & ETH directly. Bonus points for those who purchased hardware wallets like a Trezor/ Ledger, or even purchased a ColdCard (only for BTC). Currently it can take up to 3-4 weeks for your hardware wallet to arrive to your mailing address. Here are some links that you can use to order yours right now.
(Basic home page links for each, I have no affiliation.)
Links for the 3 are listed as follows:
Ledger → I recommend the Ledger Nano X
Trezor → I recommend the Trezor Model T
ColdCard → (Bitcoin only). Highly secure and very technical. This should be used by people who are already familiar with hardware wallets. I recommend KISB Guide Bundle or Uncle Jim’s Bundle from CoinKite.
Note: You should have multiple wallets.
Take Smart Measures to Maintain Privacy
This is not the same as security, although some qualities go hand in hand with each other.
This is about NOT putting a sign above your head that says “I own Crypto”.
A) I don’t want you going around in public, or on the internet, and publicizing that you own crypto assets. If you want to talk to friends or family about it, play it down, and do not disclose how much you’re holding. It is nobody’s business, and you will be much happier in the future.
We are currently in a very tense and stressful economic situation that is only getting worse by the day. It is socially unaware to flaunt your assets/wealth online, but it is especially worse during times like these. You do not want to attract “unwanted visitors” into your life or make yourself a target.
This can be realized as: 1. Friends, family, and people you “know” reaching out to you to ask for money (unnecessary stress) 2. People trying to rob you of your holdings (Hackers, burglers, etc) 3. Co-worker and office drama
All of these are real life examples and are reasons for not making yourself a target. Don’t share a lot of crypto news/posts on social media using your name. If you wish to share online, use an alternative profile & name that doesn’t include any information that would be traced back to you.
Ask yourself: Would I ever want to disclose to people (in person or online) how much Apple or Amazon stock I own? Would I ever share the total valuation of my portfolio with anyone? Would I ever tell anyone how much money I have? Would I ever let people know how much I’m making at my job/how much income I’m generating from my online business? Are any of these good ideas? Answer: *No*
Clearly the governments of the world are swiftly adjusting and adapting to crypto (see → CBDC Watch). They’re piloting and releasing their own Central Bank Digital Currencies. ~80% of the largest Central Banks are taking steps toward developing a CBDC.
This means that you don’t want to put a “kick me” sign on your back by trying to avoid paying your taxes on your capital gains. Pay what you owe, in full, every single time. This is how you stay low-key and NOT get noticed by the government.
This is the smart thing to do and should be done all while you continue building up your income(s) and accumulating more. It’s generally not a smart decision to put yourself in the crosshairs of the government.
For anyone who has been learning how to use Bitcoin → Use and generate new receiving addresses when transferring BTC to your hardware wallet(s). This *helps* maintain privacy by not holding too much in one address. It’s all on a public immutable ledger, so spread everything out.
For Ethereum, regarding your ETH and other ERC 20 tokens (Examples → Sushi, Link) these will always be sent to your Ethereum address connected to your hardware wallet. You can use different addresses across different wallets like Metamask and your various hardware wallets to spread out your assets.
Make sure you’re focused, careful, conscientious, and smart. You’re going to see a big emphasis on being forward thinking throughout this article.
Focus on Security
In addition to the privacy segment, you want to make sure you are responsible and secure long term. This means that you are using good security practices.
This requires a lot of forward thinking and technical awareness. Some of you aren’t tech savvy but that doesn’t mean you aren’t going to learn.
A) Do not under any circumstance share your seed phrase (recovery words) with anyone. Ideally you want use a metal plate/seed plate to record the phrase. Have backups for the phrase and your password recorded and stored in separate locations.
B) Have designated secure locations where you are storing your seed phrases and hardware wallets. (Don’t put all your eggs into one basket). These should be in locations that are accessible to you, and are hidden and secure. Safes and passcode for access is preferred.
C) Have multiple wallets to distribute your holdings across. Store these and the associated seed phrases in separate locations.
D) If you want to take extra precaution, ship *any* crypto related item to an address that is not your home or your work and use a discreet payment method (Ex: visa gift card purchased with cash).
Note: This does not make you a “shadowy super coder”.
Dollar Cost Average
Yes, we’re still in the early stages of crypto and Web 3. No matter what, always remember: 1 BTC = 1 BTC and 1 ETH = 1 ETH.
Keep it simple and buy your crypto assets on a regular dollar cost average basis. Your DCA can be once a week, bi-weekly, or monthly: Whatever it is for you → You’re buying at the same times.
This keeps you disciplined and consistent. We all know the smart play here is for the long term. Take the opportunity to learn more as you go.
If you are someone who hasn’t purchased any yet, and you have some liquid funds to start with, by all means take a decent position in the beginning if you can.
Don’t end up being one of those people who waste their time watching the day day to day price movement, or wasting their time listening to the fear uncertainty and doubt (FUD) coming from the billionaires and talking heads on CNBC/FOX.
We all know that crypto is the future.
Remember to think ahead and not put yourself in a position to sell *any* BTC or ETH.
It is usually a good idea to also keep a little cash available on the side just incase a big buying opportunity presents itself. Usually on those days you will see ~15% drops, those will come so don’t miss them.
(Chart of BTC [blue] and ETH [orange]: Total return percentages side by side since 2015)
Notice the USD price volatility. By taking the method of a DCA + and utilizing sudden buying opportunities, the long term pays off.
Reminder: You are looking for more ways to *earn* more USD so you can *own* more BTC and ETH.
Never Use Leverage
Going to keep this short and sweet. Using leverage is taking borrowed capital to generate a return. You are using debt to trade. That is unnecessarily risky and never a good idea. I do not support this idea but to each their own. People do this so they can multiply their *potential* return. If it works out I am happy for you, but I am not one to part take in this.
This is in the rules because MANY people fall for the gamble, and end up losing a lot, sometimes owing on the trade and going further into debt. Don’t let yourself fall victim to this. Those who do are choosing to learn this lesson the hard way.
Diversify
Don’t fall in love with any single crypto asset. You may hear the term “maximalist” or a “ _____ maxi” thrown around. This term is referring to the people who only believe in one project and disregard all others. It is an emotional mental mechanism that keeps people from seeing the direction of where the entire space is going. They miss out on the big picture and the constant developments to only hurt themselves. Don’t hinder yourself like that. There is more development occurring in crypto than one single person can possibly keep up with. Keep yourself honest and have your eyes open for new projects to learn about. It is best to keep an open mind.
I am neither an ETH or a BTC maxi, and for good reasons as both are my primary positions in my portfolio. Currently I have it structured as:
40% BTC/ 40% ETH/ 10% LINK/ 10% mix spread across various crypto assets.
My open-mindedness and willingness to learn is why I was open to STX and other projects over time. There are TONS of crypto projects out there to learn about and understand. Many of which I haven’t covered yet for you.
Allocation + Risk
Overly exposing yourself and putting too much emphasis on one position can result in costs. It can be measured in multiple ways like losses and opportunity cost.
Usually this happens when someone is putting too much of their portfolio in a small cap coin, a risky NFT project, or even a levered play. These gambles can cause you to lose capital and will require you to recoup your funds. It’s okay to try this out from time to time as they provide great learning experiences. It’s important to give yourself chances like this. Make sure you’re keeping yourself focused on the big picture too.
The pie chart I used to display my method shows you I am currently using the 80/20 rule. This shows you I am putting 80% of my portfolio in BTC and ETH, and where I am allocating the remaining 20% . Over time, I will shift these around as needed, one thing you can count on is an increase to my LINK position.
The solid and long term play deserves the largest allocation. That is where you should put your returns from the small bets you have. If at any point your experience a small position that has a quick run-up in a short period of time, sell most of it and distribute that into one of your larger positions.
HODL
This is code. Above is the original message from 2018. Most of you should already know what this means. This rule is simply expected at this point. HODL and play the long game. Never sell your ₿TC or ETH!
Remove Emotion
This will get emotional for anyone knew. Your first year or so will involve a lot of learning and experience. It is easier if you apply the rules and the information here. Don’t stare at the prices and hope for quick returns.
In the early days you feel a lot of FOMO, rushes, excitement, fear, uncertainty, etc. just like anything else new. You’ll probably end up talking to your close friends and family a lot about this. You’ll feel regret missing out on it up to this point. Maybe you’ll find a cool project, look at it for a while, and one day suddenly it’s up 70% and you don’t know whether it’s going to keep on going, or suddenly crash. You don’t know what to do and feel loss at what you want to do. All of this is okay, don’t be too hard on yourself.
Don’t let your emotions take over. It’s all about what you’re doing today to set yourself up for the long run.
Remember, your biggest project is building your own business and getting yourself in large positions in the big 3 (BTC, ETH, LINK)
Don’t expect to make a return of a lifetime over night. That’s not how this works.
Be Active
This is the way. Learn by doing. Don’t sit around and wait for someone to hold your hand and tell you what to do. Get involved, get dirty, research some projects that are interesting to you.
Play around on the protocols, read up on the recent developments, look at different exchanges, research some pairings, learn the terminology, etc. This is what is going to make you feel like you’re getting somewhere.
You have to get involved and learn what it is that is happening so you can see the direction in where we’re going.
Don’t sit around and watch this lifetime opportunity pass you by.
Conclusion
I hope you all enjoyed this installment of Crypto for Boomers! I’ve had a lot going on the last few weeks involving a big career change. Thanks for the patience.
If you have any questions regarding this, or any prior newsletters, please feel free to comment below.
Share this with any family or friends who are interested in getting started in crypto!
If you haven’t already, subscribe to my other Substack covering Central Bank Digital Currencies→ CBDC Watch
Don’t miss the new release coming this weekend.
Disclosure: Not legal or financial advice.
Getting Started & Top 10 Rules
Nicely done. 💯
Just purchased ledger S. Want to get off zero so I’ll buy from CEX. Will you do a post on DEX’s you use or recommend?