When I was a little kid I learned about the story of ‘Hansel & Gretel’. As the story goes, along their journey, the children laid down breadcrumbs to find their way home and not be lost.
I’m about to lay out the reversal of this Breadcrumb Method and how you can make it work for you not only in crypto but in all areas of life.
We all have two sides of our brain that constantly seem to be at war:
The Logical Brain: It’s responsible for all of the smart decisions you make and research you do behind the digital assets you want to own. The drawback is that it defaults to your limited supply of willpower.
The Monkey Brain: This part of your brain wants all of the easy pleasures in life like sleeping in, eating unhealthy foods, having sex, drinking alcohol, and doing drugs, etc. One of the only things that put a hard limit on this is your ability to stay awake. The drawback is that the Monkey Brain wants things quickly and is indifferent to whether or not what it does is beneficial to your life or not.
This all means that the default programming in our brains is not hardwired for your success in life or crypto for that matter. In Part 2, I’ll be diving into how we can not only re-wire our brains to actually love doing things that make us successful but how to keep it that way!
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Credit Where Credit Is Due: This concept of valuation is the brainchild of Nick Black from Crypto & Coffee. I try to learn from people smarter and more experienced than me. I’ve been following Nick’s content on macroeconomics, game theory, critical thinking, and value investing for quite some time and am eternally grateful for the lessons learned.
Check out Nick’s work here. His Twitter handle is @NicholasBlack60 where you can follow his insights on the crypto space.
The 4 T's of Crypto
Team (Is this a good team?)
Technology (What does the underlying technology do? Is there a Proof of Stake? Is there a Proof of Work?)
Tokenomics (Who owns what? What is the circulating supply? Is the total supply fixed or not?)
Timing (Was this a good idea in the past year or two? Is it a good idea now? Will it be a good idea in the next two to three years?)
You have to ask yourself, “What is the real value proposition?”
This is how you can get your finger on the pulse of the project and peel away the nonsense. This is the short way to evaluate a project. Next up, we’ll touch on the long way to go about it.
Cash (How is this project/company being funded? Are they running out of money to sustain this project? )
Value (Why does this project exist? What does it do?)
Direction (What is the management team doing? Who are they?)
Price (Is it ‘Overvalued’ or ‘Undervalued’? Or is the valuation fair, all things considered?)
Liquidity (How easily can I enter or exit this position? Do I need to jump through hoops to enter/exit this project?)
Is there meat left on the bone? (Is there room for the market cap to go up? Has this project already run its course?
The 3 Ironclad Rules of Crypto to Live By
Rule #1: Don’t Invest In Things You Don’t Understand!
Rule #2: Don’t Invest More Than You’re Willing To Lose!
Rule #3: We Are Investing In Illiquid Assets On Illiquid Exchanges Dominated By Illogical People!
This information alone puts you ahead of the average bear gambling grandma’s retirement savings away on dumb stuff! Do your research and you’ll earn while everyone else gets their faces melted on the latest animal coin.