My name is Erik. I took Gary’s class a few years ago and learned a ton from him.
I invested 150 dollars in Ethereum back in 2016. It is now worth, depending on the day, somewhere around 9000 dollars.
People ask me if I wish I had invested more. I say. “No,” and they are like, “WHY?” and I say, “Because my risk limit for high yield, high reward was exactly 150 bucks at the time. It was all I was willing to throw away.”
I went to buy a stock in a investment pool called The DAO. To do so, I had to take US dollars, convert them into bitcoin, and then from there, I could exchange the bitcoin into another crypto currency called Ethereum. The DAO would only take Ethereum currency in payment. The DAO was a investment pool, with cryptology backing its corporate structure.
The first exchange I tried to turn dollars into bitcoins had just been robbed and was shut down for trading. I tried four other banks. Finally on the fifth bank, I was able to buy bitcoin and wait for transfer. Total time–72 hours. I then turned my bitcoin into Ethereum. It took 38 seconds. That’s when I knew the future was crypto. 72 hours the old way to trade money. 38 seconds the new way. Crypto is inevitable.
I put my $150 dollars of Ethereum into their crypto company start up called The DAO. The DAO was an investment pool, and It raised 150 million dollars. I was excited to see this company function.
The DAO and Ethereum were then promptly robbed by a hacker for 79 million dollars, stolen from our 150 million dollars in pooled money. This is what my friend, Gary Johnston, would call the “high risk” portion of the investment. My money just got robbed. The Ethereum people reversed the stolen hack money by rolling back the block chain to an earlier save point. This means they loaded the back up from 3 days before the attack and rebooted. It refunded us all our money into Ethereum and deleted the hack.
This right here, is also why it is high risk. Why? Because if I sold a laptop for Ethereum that day, I would now no longer have the laptop, and I would not have the Ethereum, because the roll back put the Ethereum back in the buyer’s pocket.
At that point, I figured I still had my original $150 and had gotten a heck of an educational ride through the world of crypto currencies. I let the Ethereum sit there gathering dust, totally forgotten. Now a year and a half later, that $150 is worth $9000. That, my friends, is the “high reward” part of the tale.
Should you buy crypto? Look, if you have money, invest it in something solid. Buy what you don’t mind losing, and with a little skin in the game, you’ll be motivated to learn about something that will be the future. You may as well understand it now.
The only other reason I might buy crypto currency? I would buy it as an emergency pool of money, hidden up in the cloud. You could upload money into the cloud, and let it sit there. If you ever found yourself in real trouble, you could access real money from a computer, anywhere in the world, with only a password and a login, and someone would give you real local dollars for your bitcoins. Here in LA, there are ATM’s in book shops that take bitcoin and dispense American dollars. It is also the wild west, and places are getting robbed constantly, so only invest what you don’t mind losing.
On the flip side, if you’re in a really bad part of the world, crypto coins can be a godsend. You can put your cash up in the cloud but still access it. If you’re a fleeing refugee, you’ll get robbed of normal cash. But you can upload most of your cash to a crypto coin, and access it later. If you’re making an escape from a dictatorship, you can sneak your cash into the cloud, and retrieve it when you escape to a new country. Its the coin of the realm for the world’s black markets.
It is an interesting time in currency.