We launched this blog in early September 2017. It’s crazy to say that because it all feels like it was only a few months ago, yet here we are, knocking on two years with no signs of slowing down.
At the time, we were gung-ho about all things money. We would have crazy deep conversations about our childhood experiences and how they shaped our belief systems about money and the role it played in our lives as adults. But occasionally, we also had forward-thinking conversations about money while imagining what role it would play in our lives in the future.
At the time, crypto-currency was all the rage. The media was covering the incredible rise of bitcoin and how millionaires were being made overnight. Social media was poppin’ with people taking screenshots of their account balances showing how they made hundreds or even thousands of dollars in a few hours.
There’s no need to explore some catchy metaphor to describe it all. Simply put…it was mania.
It was so crazy that even at Thanksgiving dinner, we had a long conversation with Mrs. r&R’s father about out it and he revealed that he was holding some coins too. He’d dropped a few stacks in bitcoin, litecoin, ethereum and a bunch of others and spoke about how much he’d come up on the whole thing. Mrs. r&R was already geeked about it but seeing her Dad’s excitement put her over the top. So we agreed to poke our heads in the door to see what all the rage was about.
A few years ago, you had to dig into the depths of the internet to get well researched information about crypto-currency. But even if you found a good resource, it was all happening so fast that week old news became obsolete almost instantly.
There were the early enthusiasts, many of who were selling books, writing blogs and selling crash e-courses to encourage people to “invest”. On the other side, there were people bashing crypto as a ponzi scheme and shining a spotlight on the long list of shady characters that were behind the craze. Our position was somewhere in between and on any given day, even we weren’t on the same page.
Our passion for building wealth and courage to move forward with things despite not understanding it all pushed us to dip our toe in the pool. Our position came from a standpoint of FOMO (fear of missing out) and frustration that the Black community habitually missed taking advantage of rocketships before takeoff. In most cases, Black people were late to the party and buying at a premium hoping that history repeated itself. Between crypto and the booming marijuana industry we were HOT and refused to not get our slice of the pie early.
On the other hand, our reluctance came from the sheer confusion and risk of it all. Crazy a$$ stories about anonymous founders that only communicate via email, an entirely new vocabulary that seemed a lil Star Trekky and new coins popping up every single day with no clear signs of differentiation added to our hesitation. There was even a cryptocurrency named after a dog. Like…why?
But at the end of the day, we were willing to drop a few Benji’s just to see what happened. We’re fortunate to be able to afford taking that sort of risk so that’s what we did. At some point, we even calculated what percentage our networth was in crypto currency and it was so minuscule, we just said F**k it.
All in, over a handful of transactions, we purchased about $350 worth of cryptocurrency spread across bitcoin, litecoin, bitcoin cash and ethereum. Today, it’s worth a whopping $74.73 which gave us a nice -78% Return on Investment (ROI).
Does that make us poor investors? Does this make us suckers?
Some might say yes, but we would kindly disagree. We NEVER considered our purchase of cryptocurrency as an investment. We NEVER calculated it in our net worth and NEVER relied on a positive rate of return.
For us, this was gambling, not investing.
We actually had some days where we actually did come out above our original investment but of course, it was quickly washed away and is likely sitting in the hands of some shady dude halfway across the world. Awesome.
When we would see stories about people making crazy money and luring others in to invest, our inner hustle-man radar would go off. While some of these “characters” seemed legit, others were just shady. We pride ourselves on our ability to assess a good investment for our needs and detect integrity in people and unfortunately, a lot of these folks were just not meeting our criteria. It didn’t matter that major media and publications were celebrating them because we’ve come to learn how that “hustle” works too.
So after going from enthusiasts, to dabblers to now being almost $300 less rich due to cryptocurrency, here’s where we stand on cryptocurrency.
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The underlying technology [blockchain] that enables cryptocurrency to be exchanged has unlimited potential and can do a lot of good in the world, particularly for the unbanked. Imagine a world where entrepreneurs, social-entrepreneurs, agencies and other smaller organizations that are detached from banks can access capital instantly.
Secondly, if you’ve ever tried to give or receive money and had to wait hours or days (e.g. wire transfer, check deposit, invoice payments, freelancing, real estate closings) for the funds to clear or arrive then you should be bullish on blockchain as a concept.
Recently, we were approved for a credit card and had to wait almost two weeks so someone could print a number on a piece of plastic, put a sticker on an envelope and send it on a truck to get to us before we can use it. This, in a world where I can also load all my cards on my phone and pay using bluetooth technology.
Investing vs. Gambling
Quite simply, if you don’t have all of your short term and long term buckets of savings and investing filled to the brim, you have no business investing in something as unstable as cryptocurrency. You’re welcome to gamble like we did, but know that you’re doing that at your own risk.
Now, you may have friends or family who have positive experiences with crypto-currency and that’s all fine and dandy. But for us, as reasonably intelligent people, if we can’t fully wrap our heads around the long term viability of an investment, we don’t touch it. We invest in real estate, in low cost index funds and in businesses because we can see, touch and easily assess whether something has long term potential to appreciate in value. Today, we can’t say that for crypto.
I’m sure someone will say now is the right time to buy since prices are so low and if that intrigues you…so be it.
This coin vs. that coin vs. dem coinz
The variety, acceptance and creation of coins is the biggest beef we have with cryptocurrency. At any given point in time, a new coin can be created and distributed thus eroding the value of previous coins if its adopted. Since there is no governing or regulatory body managing the currencies, there is no control mechanism to manage the quantity of production or distribution so calculating the actual inherent value of X coin is impossible.
Now, technically cash as we know it, as a piece of printed paper, is also worthless at face value. However, given there are governing bodies and systems in place to regulate pricing, quantity and it’s accepted exchange for goods and services, there is greater inherent value in money as we know it today. That and the hundreds of years of use should give you the confidence you need in our current system.
In closing, yes, we lost a couple hundo but we see it all as a worthwhile experiment because we learned a ton in the process. For us, this is no different than us trying out the hot new restaurant in town only to leave unsatisfied and a few hundred bucks less rich.