I had a couple thoughts on this article.
1. I think a big concern in our industry is that people all too often find themselves gambling unintentionally. For example, you do some amount of due diligence on the next ICO. It checks out as far as you can tell and you like the idea so you buy in. Then it turns out the people running the ICO were unscrupulous and in some way made off with the funds and did not develop the concept as promised. In that situation what looked like an "investment" instead was a losing gamble. I don't have a problem with those who day trade or whatever and know they're essentially betting on the market losing. That's part of the game. But it's really sad when people intend to make a real investment but they lose out on what was actually a gamble.
2. When a project (with or without an ICO) has solid fundamentals, then people can be a winner at just about any stage in the market. For example, recently the price of NEM went up to over two dollars. Many say it can go much higher though it has cooled off substantially in the most recent correction. For someone who bought into NEM very early, like when it was worth less than one cent, it would be totally rational for them to have sold around $2 and enjoy their profits. Even if the price were to go to $10 shortly after they've still made a profit. At the same time, the new investor who bought NEM at $2 from that guy chooses to hold it now and he doesn't sell until it reaches $10, then he also enjoys a great return. If the coin wasn't such a good one, that would be a risky pyramid type scheme, but since the coin is actually growing in a recognizable way (infrastructure, exposure, etc.) the gains of both investors are solid and real and the new investors buying in at a later point still have potential for good solid gains. In other words, as long as the coin has good fundamentals, buying at one price and selling at a higher price is not about hoping you can find a bigger sucker than you. There's room on the table for lots of people to be winners.
3. I've said this before but I hardly ever pay attention to what the MSM is saying about cryptocurrency for the simple reason that those reporters (along with probably 99% of the world at large that knows anything about cryptocurrency) hardly ever get past the buy low-sell high mentality. In my mind there is so much more to the industry than buy low/sell high that to report on the industry as if that were all there is to it is akin to describing a mountain range as a series of two-dimensional shapes. Sure, maybe technically accurate, but you miss so much in the translation. I'm honestly a lousy trader in the sense that very often I sell something for much lower than I bought it for. Analyzing my trades is actually quite depressing because I've sold way more than I've bought. However, I've been very successful in this industry because I've been able to leverage the fact that the industry is so much more than buying low and selling high. I've networked, earned, bought into stuff based on relationships I've established, and it's worked out for me. I wish more people understood that buy low/sell high is only the tip of the iceberg for a very interesting and fun as well as profitable industry. I think it would be especially helpful if regulators understood that part too.
4. Alan, I think part of the issue with ICOs is that they kind of take advantage of the buy low/sell high is all there is to quick riches mentality. As long as people think that's all there is to it, then they tend to make decisions based on very shallow parameters rather than something more solid. But I'm not finding the right words to describe this part.
It goes without saying but I'm very happy to have encountered DNotes and be along for the ride as it charts its own more solid course that in the future many will follow.
Thank you Wiser for sharing your thought on the article. You are one of a few in our industry who can objectively analyze each situation and make many good calls. No one is right 100% of the time, but the fact that you would spend time to research and decide whether the investment is worthy of your hard-earned dollars improves your odds of being correct. I have a lot of respect for that. I know that you often earn some coins as “sweat equity” by contributing your talents. Using “sweat equity” to earn and learn is a great idea, especially for those with good skill-sets and like to develop a relationship – learn and earn at the same time. We encourage that at DNotes.
The article is intended to send multiple messages to various groups with the good intention of getting some of them to pause and think – somewhat more aggressive and thought provoking than my normal style. Unfortunately, I fear that our industry is trending in the direction of anything but normal. I would characterize the situation as one of extreme risk, for investors who just jump in to make a bet with very little knowledge of the industry or its technology, and no strategy. The truth of the matter is that we are swimming among many sharks every day. It is easy to get hurt, though it may be just “gambling unintentionally”.
We encourage long-term investment but totally understand that a balanced strategy of cashing in to lock in some of the profit after significant appreciation is not a bad idea. It is a widespread practice among professionals in the world of stock and bond investment. So is day trading. It helps to provide liquidity.
I remember that at the time when DNotes was launched in early 2014 many were very critical of any pre-mined even though they were mostly given away or used as reward for promotion or development. They were never sold for money. Because of the sensitive issue, I bought every single DNotes that I own today through the exchange. In fact, I purchased a few millions more and gave them away.
I agree with you that “part of the issue with ICOs is that they kind of take advantage of the buy low/sell high that is all there to quick riches mentality”. By pre-mining a large block and keep most of them for themselves and their advisers and at the same sell the rest for money for their own keep, without much out-rage the ICO common practice today is quite a change of mentality. Perhaps, it is easy to turn a blind eye when there is a chance to participate in some ways with the hope of getting rich. This certainly cultivate unintentional gambling, creating an environment more like a global casino. Many will go home with empty pockets but soon come back once again with more hard-earned money to make another bet.
Wiser, thanks for you continued support and confidence in DNotes. It is the support and encouragement of our community that inspired us to give it all we got to ensure great success for DNotes.