💋 💸 4 tips on how to buy crypto

Hello ladies and gents,

How is everyone? Already caught up on all the work that you have postponed to January?

Well, my January start was quite busy, but all is well with a cup of matcha in my hand 🍵

• Let’s talk about crypto a bit more - should you buy it?

• Closing the Gap - Mira Murati

• Book of the month - The Almanack Of Naval Ravikant - part II

LET’S COVER THE BASICS

Sooo should I buy bitcoin?

Last week we spoke about the basics of cryptocurrencies. This week we are diving deeper. If you missed last week’s edition, here it is.

How many other cryptocurrencies are there?
What is the difference?
Where can you buy them?

Those are the questions we’ll be covering today.

Like with stocks and any other investment in general, you need to understand what you are investing your money in. We spoke about Bitcoin last week. I also mentioned Ethereum. And I also said, that there are many other currencies, that you might have heard of. Most of the time, when you hear about different cryptocurrencies, you hear the coin's name. However, coin names differ from coin types.

And why is it important to understand coin types?

Knowing whether the coin you're looking at has a purpose, can help you decide whether it is worth investing in. A cryptocurrency with a purpose is likely to be less risky than one that doesn't have a use. But before we dive into different types, let’s clarify another thing that you might have noticed, if you did some reading.

Oftentimes you’ll see that certain currencies will be referred to as tokens instead of coins. Or vice versa. Is there even a difference you might ask? There is.
Coin is any cryptocurrency that has a standalone independent blockchain such as Bitcoin, Ethereum or Ripple. Tokens on the other hand, do not have their own blockchain, but are “running” on an existing one.

Let’s look now at different types of tokens and coins.

• Utility - they serve specific functions on their respective blockchains. XRP and ETH are two examples of utility tokens.

• Transactional - are the tokens designed to be used as a payment method. Bitcoin is the most well-known of these.

• Governance - these tokens represent voting or other rights on a blockchain.

• Platform - these tokens support transactions and interactions within a specific blockchain-based platform or application.

• Security tokens - represent an ownership of an asset, such as a stock that has been tokenized¹ .

As to how many actual coins or tokens are there? Maaaaaaany.

At the moment that number is 8975. And I am sure that there is a kid out that is right now coming up with his own meme coin². If you want to check all of them, I suggest going to CoinMarketCap, which is a price-tracking website where you can find different coins and tokens.

At this point you probably want to know how to actually buy crypto.

Step 1 - plan your investment
What I mean by that is, that you need to check your finances. If you don’t have any stocks, ETFs, you do not have any emergency fund etc. my advice would be - stay away from crypto!
Crypto is a very risky investment and should not be your first investment. It should be a part of a diversified portfolio of various assets and should represent a small part of it, not majority.

So if you don’t have any other investments yet, ignore all the following steps.

Step 2 - do your research
Consider which cryptocurrencies you want to buy, how long are you willing to keep that investment, what fees do certain exchanges charge, their security features, storage and withdrawal options. Read, read, read and educate yourself.

Step 3 - choose a platform where you’ll buy
You have a couple of options. You can either buy it on a crypto exchange such as Bitstamp, Binance or Coinbase, some neobanks³ now also offer crypto purchases - Revolut, N26, CashApp - or if you are already a crypto savvy person you can also use DEX⁴ .

But if you know how to use DEXs, don’t even listen to me. You do you boo.

Step 4 - HODL for LIFE 😁
HODL = means “hold” among the crypto community. This one is partially a joke, but not really.
Like with any other investment, you need to look at it as a long term investment option, not a get rich money scheme. Especially with crypto being a very volatile asset, the price can go up and down a lot in a single day, so be prepared. If you’re not a rollercoaster ride fan, which crypto can be sometimes, this might not be the best investment option for you.

That’s it for today!

We won’t be talking about crypto next week. No worries. Moving on to other topic.

Which one? Stay tuned!

GLOSSARY

• ¹ tokenized - the process of issuing a digital representation of an asset on a blockchain.

• ² meme coin - are either coins or tokens that base their marketing on a specific meme or trend. Usually they have no real utility and are a very risky investments.

• ³ neobanks - a type of a bank that operates exclusively using online banking without traditional physical brick-and-mortar place.

• ⁴ DEX - is a decentralized exchange. It is a type of crypto exchange that operates on a decentralized platform, allowing users to trade directly with each other without the need for a central intermediary.

CLOSING THE GAP

Mira Murati

If you work in tech space, you might be familiar with the women of this week, that has been filling papers in the past year. If not, let me introduce you to one of the women behind artificial intelligence.

Mira Murati is the chief technology officer of OpenAI. They are the company behind ChatGPT, which is a chatbot run by an artificial intelligence (AI). I am sure many of you have used it in the past year. If not, I recommend trying it, so you can have your first experience with AI.

Mira has a very impressive CV, even though she is fairly young, just 35 of age. Born in Albania, educated in the US and Canada, where she studied mechanical engineering. A very not female concentrated field, so it is even more impressive that she now holds such an important position in the industry of AI.

Before being one of the most important people in the development of this new technology, she worked at Tesla and lead the development of their model X. There is where she got her first experience with AI, working on Tesla’s Autopilot, AI-enabled driver-assistance software. Before moving to OpenAI, she also worked with a different, but also very interesting technology called augmented reality (think Pokemon Go game that used to be popular), at a start-up Leap Motion now called Ultra Leap.

Very impressive CV indeed. I am always happy to see women having such an impact, especially in industries that are primarily male dominated. I’m sure we’ll hear of her even more in the future.

BOOK OF THE MONTH

The Almanack of Naval Ravikant

by Eric Jorgenson

This book is shaping to probably be one of the best of 2024 so let’s continue right away.

Naval speaks about finding a leverage and using it in your advantage. He lists three classes of leverage that you can use:

• Labor - not you working, but others working for you.
  He says that this one is the worst, because managing other people is difficult and messy.

• Money - in the way that every time you make a decision, you multiply it with money. This is probably the most expensive one and also the most limiting in the sense, that you first need the money, to be able to leverage it.

• The last one and the most affordable one is a brand new one - products with no marginal cost of replication - books, media, movie and code. Newsletter certainly falls into this category.

He points out that the biggest chunk of the new generation’s fortunes are made using this leverage - content creators, influencers, podcasters, software developers.
It is a permissionless form of leverage. In what sense? Well, if you compare it to labor - someone has to decide to work for you, or money - someone has to give you the money to invest, with such products, you do not need anybody’s permission or input to use this leverage.

Naval says the following about time.

You need to define what your hourly rate is. If you can outsource something for less than your hourly rate, outsource it or don’t do it. Always factor your time into every decision. How much time does it take to do something? How much would it cost to hire someone to do it? Be wise with your time and spend it, where it actually adds value.

Spend more time making the big decisions. He says that there are only three:

• Where you live - because where you live can determine the trajectory of your life

• Who you’re with - who makes you laugh, who can be a great partner to you, a good co-parent?

• What you do - you will spend a lot of years doing a job or developing a business, so make sure you pick the right thing

And the last advice for today - be patient.

It takes time.

If you’re counting, you’ll run out of patience before success actually arrives.

I highly recommend reading this book. It is a very easy read and if you want to read it yourself, you can find a free version of an e-book here.

SOME NEWS

• The Milk Road is one of the few newsletters I religiously read. It also got me into thinking, that newsletter might be a good idea. If you want to learn more about crypto, I highly suggest subscribing.

• If you want to find out more about AI and Mira Murati. Great interview.

• Harvard Business Review’s management tip of the day. The importance of financial health in your company.