tl;dr Think for yourself. Question authority.
Who are the players in the crypto world anyway? We have those who have founded their coins and wish its success on the market. We have the investors of the Coins via ICO. We have the markets or exchanges that sell the coins for either cash or trades of other cryptocurrencies. We have the âwhalesâ or big-time HODLers. We have the evangelists and theÂ shills. Then we have the rest of us. WTF? So many hands in the pot, and who can I trust?
The folks who have founded their cryptos have a clear agenda to achieve; make their coin solve a problem (or make investors at least believe it is). In the case of Bitcoin, the founding entity Satoshi Nakamoto created Bitcoin as a means to decentralize payments away from banks and eliminate the need for them altogether. Ethereum is traded as a digital currency exchange like other cryptocurrencies and is used to run applications and monetize work. Each coin has their whitepaper going over the purpose of the project, highlighting their underlying technology and functionality. Without reading through the whitepapers of a given cryptocurrency project and researching the people running the show, it is difficult to know if the project is valid.
The next groups within the crypto ecosystem are the investors. The Wall Street money, and the small guys getting in on the humble beginnings of what might be âThe Next Bitcoin.â The crypto lottery so to speak; ICO (or Initial Coin Offerings), are the chance for the public to get in on the humble beginnings of a new crypto coin before it gets market listing. These investors have one incentive or another to put money into these new coins. Whether they are corporate entities from Silicon Valley or venture capitalist from Wall Street seeking a risky investment with extremely high payouts for victory, it is important to try and see who is investing in the coin and what the motives might be behind their purchases.
Once that coin has matured past the ICO stage, much like a baby sea turtle fending for dear life as it attempts to penetrate the ocean moments after birth, the coin needs to get placed on an exchange and start trading or it could face certain death. But getting onto an exchange might not always be so easy, and the various (some popular ones being KuCoin, CEX.IO, Binance, Coinbase, and Robinhood) all cryptocurrency exchanges operate differently and have wildly varying coin offerings. Exchanges have their own struggles, philosophies and agendas. Depending on their country of operation, they may face certain restrictions on how they may conduct business. Further, each exchange has to prove to customer that there is security, transparency, scalability, and a customer service. With the growing scrutiny and competition, it is clear that knowing your exchange is vital to navigating the crypto battlefield.
The âWhalesâ are the players with big-time holdings in cryptos; enough to cause significant impact when they do or do not move their coins around. They also have a big voice and often many people watch these people closely on social media to, both, understand their stance and to be able to make decisions on their own investments. Whales also fight the battles for their coins and constantly need to make the case for them in the cryptocurrency battlefield. The biggest whale alive (or maybe dead?) is Satoshi Nakamoto, the founder of Bitcoin. Satoshiâs holdings are estimated at over one million Bitcoin. That is a massive ability to influence the market, considering its fixed 21 million Bitcoin (with as many as three million presumed lost forever). If Satoshi ever came back to the spotlight, the whole world would be watching every move and the influence would be significant.
(top Andreas Antonopoulos, bottom Roger Ver)
The evangelists and the shills are among the faces of the crypto world. They can come from all the groups shown above, or just right out of the woodwork. The evangelists are the folks who preach the technology of their coins and why it is so great. Someone like developer Andreas Antonopoulos is known as the âBitcoin Jesusâ for his dedication to informing the crypto community about the underlying technology of Bitcoin, its viability and its overall purpose. Then there is someone like Roger Ver who was a big part of the BCash (Bitcoin Cash) fork (split) from Bitcoin that was perceived by many within the Bitcoin community as trying to replace Bitcoin via brand hijacking paired with propaganda against Bitcoin. Roger, to many, is seen as a shill; or someone who is trying to sabotage an agenda to server his own; in this case his BCash (BCH) push against Bitcoin (BTC).
Then there are the rest of us; the noobs, the pocket-change investors, the earlyish adopters, the late adopters, and the on-the-fencers. It kind of feels like weâre in a shark tank and it is feeding time. It doesnât have to be that way with the right mindset. First off, a few common sense rules to this game to help out; donât invest more than youâre willing to lose, donât sell for any reason whatsoever (remember, you invested what youâre willing to lose anyway), and do your own research before trusting anybody elseâs information. Develop your own instinct based off of your own experience and education. Keep educating yourself and stay current.
Now that you are familiar with the founders, investors, exchanges, whales, evangelists, shills and then the rest of us; you can now see that the crypto world is confusing AF and getting more so by the minute. There are a whole lot of agendas all over the industry and lots of challenges ahead with all the growing pains. As the community matures and begins taking its new shape, we will see who the winners and losers are in this buzzing and active community. But for the regular person just looking to engage the crypto world, it is important to do your own homework. Research everything about the people, the processes, and the underlying technologies you are putting a stake into. Have fun.
Marcus Henry is an American Journalist with over 10 years working in tech. He has been actively involved in the crypto community for the past two years and currently works out of Austin, Texas. He covers breaking news, writes perspective pieces and reflections and conducts interviews with industry professionals and community members.
Follow Marcus Henry on Twitter- @MarcusHenryHODL