Recently the cryptocurrency world can be said to be too crazy, basically all Q groups or WeChat groups are discussing virtual coins. I believe most people’s attitude towards virtual coins still think it is a replica of the 17th century tulip bubble. At the 2021 Warren Buffett shareholders meeting two days ago, Warren Buffett didn’t want to comment on it, and this Munger of Warren Buffett called Bitcoin “a financial product invented out of thin air. “Of course, I hate the success of Bitcoin,” he said, “and I don’t welcome a currency that is so useful to kidnappers and extortionists.” “I think the whole development [of Bitcoin] is disgusting and contrary to the interests of civilization,” Munger said. Obviously, for 100-year-olds, and who are known for their value investments, it’s clearly impossible to agree with virtual currencies. I actually learned about virtual currencies as an undergraduate, and went on a deep dive into cryptocurrency trading two days ago, and now my view of virtual currencies is this.
Spot is a religion, contract is a lottery! Before I explain my opinion in detail, let’s take a look at the two hottest virtual coins in the latest cryptocurrency circle, dogecoin and shitcoin (SHIB). In fact, shitcoin is just the name of the Chinese language circle, the original name is Shiba Inu, or Shiba Inu, so it and dogecoin have an origin, both are dogs, and both are Shiba Inu! In addition to Shiba Inu coin, dog coin also has a little brother called Akita Inu coin, AKITAINU, which looks quite similar to Shiba Inu, see here do you think it is very funny. In fact, the birth of dog coin is even funnier!
The icon of doge coin DOGE is the birth of the network culture, Doge originated from an online animation series called Homestar Runner, in this animation, the dog is called “doge”. In April 2013, doge became popular after appearing on 4chan (a comic book community). By the end of 2013, the photo of Shiba Inu was widely circulated, and doge unexpectedly resurfaced on Reddit (the largest online community in the United States) and Tumblr (a light blog), eventually appearing on “Shiba Inu’s White “(Shiba Confessions), a Shiba Inu with an inner monologue.
In 2013, Jackson Palmer, an Australian marketer who had been very interested in taking on electronic currencies, had a whim one day and made a big joke, tweeting: Invest in Dogecoin,This is the next big thing. The original was a joke made by Palmer about the cryptocurrency market, especially the light and weirdness of a bunch of digital currencies such as Bitcoin. The intention was to satirize the craziness of digital currency derivatives such as Bitcoin at the time. For a serious joke, Palmer also bought http://Dogecoin.com的域名. and uploaded a photo of a Shiba Inu placed on the coin.
However he got a very large response to this joke. After all, the mythical story of wealth and freedom created by one bitcoin after another is deeply rooted. Investors are desperate to find a new currency in the hope that they too will become the protagonist of the myth of overnight riches. As its influence grew, Dogcoin caught the attention of BillyMarkus, an internet geek, and the two of them later got in touch to collaborate on the development of Dogcoin. The entire development process took only three hours, and most of those three hours were spent tweaking graphics and fonts. But both men sold all their dogcoin holdings in 2015 and shut down their social media accounts, leaving the “dogcoin world” behind. At the time, the price of a dogcoin was only about $0.0001, and even at $6,000 for a used Honda, Marcus would have held more than 60 million dogcoins. Look at the current dogcoin as well as SHIB, counting the decimal places are feeling scary.
I believe that after reading this paragraph, you will know how magical dogcoin is, the novel does not dare to write so.
Now in various self media platforms, there are countless big and small V to everyone “science” the value and beautiful vision of virtual coins, suddenly, I think of a profession, called missionary! To spread the religion of one’s faith to others and make them believe in it. This process is similar to pyramid schemes, but not quite the same. A pyramid scheme is an illegal act in which the organizer develops people and gains wealth by developing them or requiring them to pay a certain amount of money in order to qualify for membership. The essence of a pyramid scheme is a “Ponzi scheme”, where the money of the later is used to pay for the earnings of the earlier. And missionaries are really religious. Religion is an important social ideology, a reflection of the fantasy in people’s minds of the external forces that govern their daily lives. Virtual coins are more like a mysterious religion. The godfather of Bitcoin is Satoshi Nakamoto, and the godfather of Ether is God V. The basis on which virtual coins can be stable is consensus, and it is valuable as long as there is a part of people who are devout in their faith. As in China, even if it is socialism, it does not prevent the freedom of religion of most people.
And I think that the godfather of the dog religion in this wave of dog coin hype is Musk, yes, the boss of Tesla and SpaceX, the world’s richest man, Elon Musk. Unlike Trump who tweets to rule the country, this man tweets to recommend coins and shouts orders like crazy! There was no SEC to regulate the cryptocurrency world either, so, with his strong appeal, a consensus on dogcoin was quickly formed: congregants were convinced that dogcoin would hit $1. This is the reason for the rise of dogcoin, the dream of getting rich made countless people become the world’s richest Musk’s congregation, and everyone gradually became fanatical in this religious dream, and truly believed in the “value” of it.
The SHIB Shiba Inu coin, too, was shouted by the master of bringing goods, Musk.
SHIB the project itself is a community experiment, issued at a very low unit price, is trying to eliminate the single price of a few zeroes after the decimal point. Now it has managed to come to 4 zeroes after the decimal point.
Understanding this, you will know why I say spot is a religion. Because this thing really does not need to be proven or disproven. Everyone has different beliefs due to different perceptions. Just as you can’t persuade a Christian to give up his faith, you can’t persuade people in the cryptocurrency world to believe that digital currency is air. And vice versa, you can’t persuade Warren Buffett to buy dog coins. There is no right or wrong value of virtual currency, different people have different perceptions, no need to seek consensus, religion is enough to get the part of people who believe to reach consensus. So, treating virtual coins spot, my attitude is that everyone has their own right to pay for their beliefs.
In order to experience virtual coins in depth, I also joined the cryptocurrency world in real life, two days to invest in dogcoin and SHIB spot, stepping on a wave of wind, my 200 yuan has become 1100 yuan. Then I put the money I made into the dogcoin contract and lost $200 and $500 in two bursts of positions in minutes. I admit that I am a cryptocurrency leek, but in fact I am more representative of ordinary people. My real-world experience vividly illustrates that this place full of wealth creation myths is happening every moment to create negative stories. Perhaps some quantitative institutions can use trading strategies to ride the frontier in the cryptocurrency circle and reap the rewards repeatedly. There are also short term experts who are comfortable with their trading skills, but most ordinary people will always be young leeks being harvested one by one in the cryptocurrency world, especially in leveraged contracts, where making money is the process (by luck) and blowing up is always the result (to zero).
The so-called contract is to reflect the price change of the unified underlying and provide the profit or loss caused by the price change without actually owning the unified underlying. Contracts are traded on margin, and profit or loss is determined by your buy and sell prices. The basic logic of a contract is to predict a rise in the price of a currency → buy up → earn the gains from the rise; predict a fall in the price of a currency → buy down → earn the gains from the fall.
What we know as futures is a standardized contract developed by a futures exchange. Futures emerged to standardize goods, and later evolved into a standardized contract over time. The primary function of futures at the beginning was price discovery and later risk aversion. Nowadays, the most important function of domestic futures is a tool for hedging risk. For example, if you are a commodity trader, or the owner of a refinery, steel plant, power plant, or mine, you know how futures help companies and traders to hedge the risk of raw material prices. The introduction of individual investors is what adds liquidity to the futures market and serves the real economy.
And the contract of the cryptocurrency circle, the corresponding delivery is virtual coins, obviously deviated from the entity after the meaning of gambling is more adequate. And the threshold for participation in high leverage trading on major exchanges is particularly low. The fact that you can casually leverage a hundred times leads to an influx of retail investors who lack expertise and awareness of risk control, and add an incredible leverage multiple that results in being blown to zero. One might think it’s not just guessing the size, how can you have a 50% win rate? But in reality, if you leverage too much, you will blow your position due to the short term volatility of virtual coins, no matter which direction you choose. For example, in the chart below, even if you open a long order, you may not survive the downward fluctuations.
So, for the average investor, the contract is a lottery, and the odds are that the money you throw in is for charity, and you’ll get rich through the contract unless a stroke of luck strikes. The last point to say, speculation coins whether it is making money or losing money, you will be particularly difficult, losing money needless to say, making money you will be too little to buy. The last mindset will explode, also on the head to affect your normal investment ideas, and even cause serious consequences.
Finally, some explanations of the terminology used in the cryptocurrency world are attached.
Finally, to reiterate my views on virtual coins.
Spot is a religion, contract is a lottery!
You can choose to pay for your faith, or you can buy a lottery ticket once in a while!
But I don’t want to see you on the news, good luck!
