Author: Puffy
Compiled by: TechFlow
Question: If the past events were to repeat themselves exactly, wouldn't that be too easy? How can everyone become so wealthy so easily?
Answer: Even if the past events were to (re)occur exactly the same, they would not become wealthy so easily. It is much more difficult than it appears.
Independent Thinking
Only less than 5% of people are truly capable of independent thinking, and this ability often requires the following steps:
Establishing a solid epistemological foundation
Collecting raw data
Applying meta-rules to narrow the range of strategies
Clarifying the relationships between things
These steps are extremely difficult for most people. They have never tried, don't know where to start, lack relevant experience, and have no confidence to let their views stand out in the external noise.
Without this quality, you are basically unable to get started in the cryptocurrency field. Even the simplest and most logically related data set (such as the LTC chart - the first Altcoin, and the "canon" followed by all subsequent coins) may be as complex to you as an unsolved mystery.
Intelligence and Relationship Processing Ability
Intelligence is, in a sense, an empathic ability. You need to intuit the intentions of the question setter and understand the relationships they are trying to convey.
In the cryptocurrency market, the question setters are the participants in the entire market. People with high intelligence can quickly discover relationships that others may never be able to perceive.
For example, it is meaningless to try to explain the equation 3x = 6 to a dog, because it cannot understand the abstract concept of "dividing both sides by 3".
Similarly, can you "see" the distribution of emotions, the accounting profits and losses, and the overall trends behind them by observing a chart? If so, you can infer the future market direction from it.
Powerful Strategic Thinking (Meta game)
Many smart people, although capable of independent thinking and discovering relationships, have very weak overall strategic thinking.
Here are some typical failure cases:
Developers: They think their technical capabilities will give them a market advantage.
Thought leaders: Although they are highly respected, their past investment records are dismal.
Successful people: For example, can Paul Graham really find the right investment answers?
The eliminated group: This happens to almost everyone, just like professional athletes eventually lose their peak performance.
Humans are inherently flawed and cannot fully understand and accurately model the complex market system. To avoid these traps, you need powerful strategic thinking to help you filter information and allocate its importance.
Risks in Execution
Successful execution requires the following basic abilities:
Most people who have startup capital are already relatively stable in life and are unlikely to easily invest in high-risk cryptocurrency trading.
If you have a happy family life and a respected profession, the potential rewards of participating in cryptocurrency trading may be far lower than the potential risks.
There are many classic traps in trading, and even people with advantages can fall into them, such as:
Viewing profits as "casino money": Truly calm people will treat buying $300 worth of SHIB and seeing it grow to $30 million the same as using their family's $30 million to buy the same SHIB stack.
Taking action at critical moments: The market is always repeating similar patterns. Many people know they are in a bad trade or position, but they are slow to take action. "Oh, it's down 40%... Oh, it's down 70%... Oh, it's down 65% from the all-time high... Oh, it's down 85%... What should I do?"
How to Avoid Bankruptcy Due to External Factors
Look at the list of major Bitcoin holders, how many of them do you think still have their Bitcoin?
Top 500 Bitcoin holders: Top 50
980,000 BTC*. Satoshi Nakamoto
400,000 BTC*. HD Moore (AHA)
400,000 BTC*. Dustin D. Trammell (AHA)
400,000 BTC*. Tod Beardsley (AHA)
350,000 BTC*. "Dread Pirate Roberts" aka "DPR"
300,000 BTC. Roger Ver
300,000 BTC*. "knightmb"
200,000 BTC. Mark Karpeles
8.5 182,592 BTC. "Loaded"
174,000 BTC*. FBI (Federal Bureau of Investigation)
119,000 BTC. 3 members of the AsicMiner management team (names unknown)
Common causes of bankruptcy include:
Hacking attacks
Exchanges misappropriating user assets (numerous such cases)
Legal disputes
Tax issues
Why do almost all the core figures in the cryptocurrency field eventually either receive legal summons, mysteriously disappear, or fall victim to scams or arrests?
In fact, preserving wealth is not an easy task. If you want to keep your Bitcoin forever, "early death" seems to be the safest option (this is sarcasm).
So how do people become wealthy through cryptocurrencies?
Most people who have become wealthy through cryptocurrencies actually have a significant misunderstanding of the market, but they happened to seize the opportunity at a critical moment.
Many people invested in Bitcoin because of reasons like "you can use it to buy coffee" or "to hedge against inflation", or other popular narratives in each cycle, but these reasons have not actually materialized.
If you believed in 2010 or 2012 that Bitcoin was a novel proof-of-concept technology, it accumulated real demand through the Dark Web market, proved its viability, and gradually triggered a series of speculative bubbles, then your judgment was correct.
However, people holding this view were not common at the time.
Some people invested in ETH very early on, simply because their high school poker friend told them it could be used to support decentralized games or other use cases. Others believed that ETH would become an unstoppable smart contract platform (until the ETC fork event).
However, these ideas have hardly been realized. The vast majority of early "whales" either sold their assets at low prices or experienced asset shrinkage of up to 95%. This shows that they lacked a deep understanding of market operations and had no clear investment strategy.
