I've seen here quite a lot of articles on "how to invest in cryptocurrencies", "how to choose a cryptocurrency to invest" and the like. And honestly, the vast majority of them are simply pushers of some yet another new shiny altcoin. Actually, I don't mind, but because many words have many meanings, I would only like to clarify the wording.

Well, cryptocurrency seems clear (well, not that clear, actually, but additional clarity here is only of academic interest). However, it's generally worth learning the vogue, subtle and misty difference between investing, speculating and gambling. Because the funny thing is that people quite often go gambling calling it "investing".

Gambling is a pure game of chance (or luck if you wish). You wager, roll and wait to hit the jackpot. Simply because your crystal ball, or "technical analysis", or some Youtube guru, or an internet forum, or a friend of yours, or TV news, or your left foot told you so. Or you just feel today is like a jackpot:

However, the smartest gamblers know about probability, positive math expectation, and similar sh*t and they gamble "scientifically". I could point to some funny books on the topic, like Dan Borge's "The book of risk" or Peter Bernstein's "Against the gods", or even to Kolmogorov's, but I think it will be largely useless from the crypto investments point of view. Anyway, some gamblers are simply lucky. Indeed, from time to time someone does hit the jackpot -- making those who don't know about the law of large numbers, survivorship bias and other shitty math go gambling too, calling it "investing".

Speculating is a "buy low, sell high, rinse, repeat" thing. A speculator buys anything only to sell it shortly afterwards at a better price. But unlike gambling, speculating doesn't rely on pure luck like websites or technical analyses. A speculator knows (or at least has a good firm proven reason to believe) when and why the price is low and when and why it will be high. If you speculate oil, you routinely track its supplies and demands, oil ships in the oceans, political rumors and the like. And when you're the first to hear about a sunk oil carrier, you already know where to buy oil cheap and who to offer it at a good price.

Finally, investing, it's neither a game of chances nor a short-term buy-sell. You know why and how your "investment asset" will bring you more and more money, forever (although with possible downward fluctuations) so that there's hardly ever need to sell it at any price.  Well, let's say that investing is a long-term hodling based on confident knowledge. Needless to say, investing also implies both serious research and quite a bit of luck.

Now how it goes about "investing in cryptocurrencies".

Obviously, gambling with crypto is the easiest approach and no wonder that it's most widely propagated. Buy any crypto you like, nowadays there're quite a lot "analyses", "researches", "price predictions" to choose from -- and maybe you will hit the jackpot. I'm not joking, it happens.

Moreover, gambling with cheap sh*tcoins has some nice features. First, since they're cheap their possible upside movement (i.e. profits) is much higher than possible downside (i.e. losses). In other words, you wager a buck into a coin, you can either lose that buck or win 5x-10x-100x-... bucks. Second, since there're plenty of cheap sh*tcoins now, you can wager many times, on various ones. That's the core thing of trading junk -- you buy a lot of various cheap sh*t, 99% of which will go bust -- but maybe 1% will boom so much, that its profits will cover the losses of that 99%. Better yet that when it's about crypto sometimes there's even no need to buy coins, you can get them for free from faucets, airdrops, giveaways, bounties and the like -- only profit and no loss at all!

Crypto speculating today is mostly pump and dump schemes, similar to junk trades of Mike Milken times. Or insider trading e.g. when you are the first to learn what altcoin will be next listed at Binance. If you routinely go really deep into the crypto community (i.e. beyond dyoring teams on websites, down to ideas, rumors, and trends), you can probably make successful speculations. 

Otherwise, the blockchain technology is still too young and uncertain for any DYOR except to make sure the leaders of your favorite crypto start-up really have at least some coding skills. In other words, it's still by far not clear what, when, where and how all these wonderful blockchain things can be used in the real world at large scale and how the real world can profit from them. That's why it's hard to invest in crypto now. There're already quite a lot of dead crypto start-ups with great (at least, at first glance) ideas behind. On the other hand, look at Ethereum: it's a real working system, with tokens, DeFi, and smart contracts -- but is investing into ETH really so good?

As a side joke, I myself have crypto investments -- in crypto gambling. I stake TXT tokens at Trustdice crypto-casino. Of course, investing into gambling may be a dubious thing from the moral point of view, but it's a nice example of a confident hodling a share in a project with a clear profit-generating model (not to mention that I get my TXT tokens for free).

So what's the moral? Simple -- since many words are just vague, sometimes it's nice to make clear what exactly you're going to do.

And in the end, I would like to underline two things:

First, the difference between gambling, speculating and investing resides in a person and not in what the person buys or sells. In other words, often you can equally invest in oil, speculate oil or gamble with the same oil, it's up to you.

Second, I don't mean that e.g. gambling approach (I mean trading approach, not the addiction to one-armed bandits) is "worse" than investing. Money is always right, they say. If you do more with gambling -- go for it then.

That's all I have to say today, folks.