"High reward -- high risk", they say. Or "High risk -- high reward". Or even "The higher is the risk, the higher is the reward". Today I would like to talk a bit about the little devils living in this word combinatorics and how they should be applied to crypto-making (i.e. "money-making", only with crypto).

Let's define the wording first.

The "reward" is rather clear. You wager (ok, invest) a buck and receive 5 bucks back -- here 4 bucks is your reward. That is the "reward" is profit, something you get above your wager.

The word "risk" has many meanings, even in the financial sphere alone. Let's assume that our "risk" is simply the probability of losing our wager (or at least a significant portion of its value).

From this point of view, what this "risk/reward" blah-blah-blah actually means? "The higher is the risk, the higher is the reward"? Nope. "High reward implies high risk"? Nope again. Actually it means that taking high risk must be justified by high reward. In other words, the more risky sh*t you mess into, the more profits you should reasonably expect to get from it. It's interesting, how often this simple thing is overlooked in money deals. Meanwhile, in real life, you probably will not go pushing drugs for the minimum hourly salary and the risk of spending the rest of your life in jail -- the reward simply doesn't justify the risk by far...

"Well, so what all that has about crypto?", you might ask.

Not so long ago I saw here yet another article on "how to invest in crypto" topic (I don't remember the URL to it, and I don't want to show it here anyway). The article was about yet another new shiny altcoin, with research, charts, analyses, price predictions, and everything. A nice article, really.

Among all things, the article said that the altcoin has the staking feature that brings about 2% APR, passive income and other Mr. Kiyosaki's stuff.

Two percent annually! TWO PERCENT, Carl!!1

From the past years we know that about 90% of altcoins died one way or another. Does anyone really would want to gamble his pennies into a 2% APR coin which will die in a year with 90% probability??

I could understand when we talk about reasonable expectations of 2000% annual price appreciation.

But two percent?!

Holy sh*t, Carl...