Disclaimer: This article is based on personal experience. It is not financial advice. Opinions are my own.

I was one of the people who caught the train of the crypto bull market in mid-2021.  That was the start of my journey in the crypto world.  I have learned a lot about topics such as cryptography, technology, smart contracts, investment, and psychology.  After gaining all of this knowledge, I would say the crypto market is totally brutal, unpredictable, and volatile.  It moves insanely fast in terms of adoption, contribution, speculation, and of course, scams.

It all began with bitcoin in 2014-2016.  At the time, I had just “heard” about it and tried buying it, but failed to do so.  This is because I did not “understand” it.  Even if I had bought bitcoin, I would have still sold or lost it anyway.  Knowledge and understanding are crucial factors in the space of technology and investment.  That being said, I share with you the lessons I have learned as a Gen-Z, the generation that grew up with technology.  Here is what you should know and be aware of before jumping into space.  Here is what is next for crypto.  

Crypto As an Investment

The reason why I started with the aspect of an investment is because Gen Z is the first jobbers and money matters to them.  In our 20s, we are living in a capitalist world.  It is a world of investment.  The world is a money game. 

If we look at it as an investment, the crypto market is super volatile.  It can easily drop 50-90%.  On average it moves at around 5-10%+.  Most Gen Z like me does not notice the volatility because we lack traditional investment knowledge.  If the traditional market was to fluctuate like the crypto market, it would be in a financial crisis. 

This is some basic knowledge you should know before jumping into the crypto market, a market of speculation. 

• Budgeting
• Portfolio Management (diversification)
• Risk Management (Take profit and cut loss)
• Psychology of Investing (Fear and greed)
• Basic Technical Analysis (Graph, Tradingview)
• Basic Fundamental Analysis (Tokenomics)
• Basic Traditional Market Knowledge (Stocks, Funds, ETFs, Bonds, etc.)

You should know about these issues before jumping into the market.  This is especially true for Gen Z or the younger generation who are newcomers to the crypto market.  Both markets have a common area of shared knowledge and skills.  For example, risk management skills enable you to survive longer in the crypto market.   

Diversifying will allow you to spread the risk and profit.  Remember to diversify everything.  You can diversify your portfolio and asset allocation.  You can also diversify your investment across the field. To put it simply, DO NOT GO ALL IN!

One more important point is to set a goal. Whether you came in for speculation or learning you have to define yourself clearly and be aware of what exactly you are doing.  So that you won’t get distracted by the market.

Don’t Trust the Influencer Too Much

I’ve learned that you have to throw off the cult of personality. Humans aren’t reliable. I’ve seen some investors fall for them and turn themselves into “exit liquidity” which simply means that influencers leverage you and make a profit on you. 

Some influencers will also create something called a “model” to try to predict the market. The obvious case studies are the S2F (Stock-To-Flow) model and the Rainbow chart. Both failed, causing most investors to buy at the top and HOLD until it crashes.  All of this shows that you cannot predict the market.  All you can do is minimize the risk. 

Boom and Bust Cycle

When it comes to the crash of the crypto market I can confidently say that it was absolutely scary for a newbie like me.  I saw a 50% drop from the market crash in November 2021 and that was insane. Imagine half of the valuation gone in one single day.  Before a “bust” there is always a “boom”.  I can remember that all the alternative coins and meme coins skyrocketed.  (100x or 1000x was normal for alternative coins during the boom in the Crypto market).

Surf the Cycle (Trend following)

Booms and busts are like a “cycle” of the market.  This means if you know how to surf the wave of the market then you can make money or more importantly you can survive the crash whether it is Luna, 3AC, or FTX.  For me, surviving is more important than making profit.  When you fail there is a high chance of giving up or recovering from loss.

I’ve come to learn that the best way to learn is to practice and jump into it. Real experience is crucial.  It's just like when falling off a bike before you know how to ride it.  In the crypto market, you have to get hurt and take a fall.  You can learn, invest, and understand the psychology of investing from it. 

Always remember that the amount of money you put in crypto can all be lost. 

Source: Crypto Crash Diagram by Bloomberg Crypto

Security and Scams. How to Spot and Avoid Them?

Over 3 billion dollars has stolen in 2022

The scam has been around in human society for so long and I believe there’s no way that it will become extinct because every human has fear and greed. In the Crypto space. I found various kinds of scams. Whether it’s a Ponzi scheme, phishing, fraud, etc

The upside about this is that Gen-Z has grown up with technology. There is a lower chance of us falling for scams.  However, some scams have gotten way more advanced.  Obvious examples appear in NFTs spaces.  I will tell you exactly how these scams are done.  First, scammers will pretend to be interested in your work to make you feel appreciated.  Then, they will ask you to invest or contribute to your work as an artist.  That’s when they will make you “install” some sort of program OR “sign” some kind of transaction.  This is the start of a malicious program or a smart contract. 

Last but not least, join the community of Crypto. You will get quick updates on the news and market condition, tokenomics, and proposal situation.

How Do You Avoid Scams? 

My trick is don’t rush and just read.  If someone or some platform is rushing you to do a transaction then you should be concerned about it.  In the crypto world, you cannot reverse transactions.  It is a bankless financial system.  No banks will help you like in traditional finance, except for some big cases that rely on centralized blockchains. 

“Just read” means that you should read carefully what you are about to sign.  You should pay attention to what is expected by the contract because this space is the “code is law”, meaning the contract executes exactly what it says.  The problem is that most people don’t know how to check or read a smart contract.  The solution for this might be using an extension that simplifies and tells you what the smart contract will be doing when you sign it.  One of the most popular extensions is Fire.

Source: Fire Extension

Additionally, bookmarking will benefit you in this risky space. You should head to the official Twitter account of the project that you want to use.  After you have tried it and found it reliable you should always bookmark them immediately.

Therefore, the basic knowledge of blockchain technology and smart contracts matters.  This includes knowing how cryptography works (private key, public key, passphrase) and also custodial and hardware wallets.  Basically, all basic beginner cybersecurity knowledge will be advantageous to you.  For non-tech people, just stay curious, think twice before you decide, and most importantly don’t be too greedy.

Crypto as a Technology

I come for the money and stay for the technology.  That is what most Gen Z or tech-savvy people like me do.  There is a huge amount of knowledge to be learned in the crypto space.  It would take several months to understand just the fundamentals of bitcoin alone.  Bitcoin is different not just because it is the first cryptocurrency, but because it contains a lot of innovation and technology.  There are various aspects of it such as cryptography, technology, proof-of-works, economics, history of money, politics, and sovereignty (Maybe there is even more!).  Most people have fallen in love with it and are obsessed with it.  They are what we call “Bitcoiner” or “Bitcoin maximalists”. The same goes for alternative coins like Ethereum.

The aspect of crypto technology that I want to focus on is web3.  Why?

This is because it is easily accessible with Solidity programming language and EVM (Ethereum Virtual Machine) that can get you started with the smart contract and dApp (Decentralized Application) stuff.  However, there is a controversy between bitcoin and alternative coins in terms of decentralization. I will only focus on the technology here which is “Coding”.

If you learn to code, it will ultimately lead you to be able to read smart contracts, which will benefit you in the future. Additionally, you can contribute to some of the projects to earn and learn. However, if you do not have expertise in coding, it will not be easy.  Plus, the crypto tech always builds in a bear market so this is a great time to learn, invest, and contribute.

Could It Be the Future?

It could be the future even if it is still in the adoption process. That is because big players are starting to join this field of technology, using buzzwords.  Some technology and innovation are real and can be implemented in real-world use cases.  Some are just commercializing and taking your money. This depends very much on how the future will turn out.  Will it be a future of innovation?  Will it be a future of speculation?  Will the future be of startups and tech companies?  In my opinion, crypto will be the future. However, it will only be the authentic ones that will survive like bitcoin and Ethereum.

Adoption and mass engagement are rising (See the graph below).  People say it will likely be like the start of the Internet era.  Various kinds of technology will adapt and come into play in this space.  The technology includes zero-knowledge proof, artificial intelligence, and more innovation that will occur in the future. 

Source: World Bank, Crypto.com

Developers and development are silently doing great.  As I mentioned before, developers love to build in a bear market.  There is no distraction from VC or institutional investors, only genuine contribution.  Bitcoin is having a huge impact via Taro and Lighting Network.  On the other hand, Ethereum has migrated to use proof-of-stake (The Merge) and also has a long road map of development incoming.  The Improvement Proposals of other projects are also quietly building up despite the fact that big tech companies are laying them off.

Source: Alchemy

Startup and Business Growth

The business side of crypto is also not doing great in the bear market.  On the contrary, when the bull run hit in 2021 dozens of projects and start-ups had huge development.  The picture below shows only a handful of start-ups and projects being built.  There are actually hundreds of these crypto projects.  However, from a realistic perspective, most of them are dead and dying.  Why? Because some of them are using buzzwords to make a quick cash grab like Helium.  Some are frauds like FTX. Therefore, it is really interesting when a project survives.  It means they can generate income and their projects are sort of working by providing and solving some problems in traditional finance.

Source: Taxbit

Big-Player

Venture capital and institutional investors have a huge impact on the market and crypto adoption.  All projects are driven by money (Bitcoin excluded).  What can we gain from them?  The answer is the lesson.  We can learn from their mistakes and leverage them.  A quick example is some investors following these VCs and copy-trading them. We called it “smart money” because they know something we didn’t know about. They have a whole team dedicated to gathering and analyzing more information.  As you can see in the graph below, these big players are surfing the cycle and following the trend by decreasing their investments during the crash market (some just went bankrupt). This huge drop includes macroeconomic factors like the possibility of a recession and the bubble of technology sectors.

Source: spglobal

Summing Up the Lesson

• Define your goal before jumping in. Each goal represents a different purpose and strategy.  I don’t recommend you to all in.
• Knowledge is power.  Gen Z should practice some basic skills in the traditional stock market and learn a lot of money literature. (Money management, Risk management)
• Do not rely on people's perspectives. Especially the influencer. Follow the trend and don’t marry a coin.
• Be aware of scams and learn to arm yourself with basic security knowledge or you may lose all your money. (Don’t rush, bookmark, use HW)
• Due to the huge amount of money invested and the adoption that is increasing in this space, this thing will eventually be the future even with the presence of a lot of scams.  At the very least bitcoin may revolutionize traditional finance and payment systems.

Infographic References

Bloomberg

Taxbit

Alchemy

Spglobal

Triple-A