It's always good to think way ahead of the curve in crypto so you can take the profits and miss the bullshit. That's the way to get money out of degen yield farms, it's the way to come up when everybody is getting rug pulled. My trading strategy is not perfect. But one thing I can do well is play around in the altcoin space without getting rugged or scammed. I've made money on scams. (I wrote about it somewhere; I can't remember where it is to link it now. Search my earlier articles!)
How do I get this part right?
My entire plan is based on a single premise: This entire crypto space is in beta. I am performing a testing service, for which I should be paid handsomely. When the payment runs out, so does my service. I'm not here to lose my life savings because your protocol had a bug or the dev team got greedy.
The biggest bug for any protocol is centralization. I don't care how well your tech works. The more centralized it is, the less I like it. I'm perfectly willing to grab some profit from it. I'm not willing to stick around for the inevitable fall. And teams that structure their protocols like companies, with CEOs who run towards regulators asking to get raped, deserve failure. The majority of crypto fits this description, including big projects like Cardano, Binance, and Solana. You can bet all of the people running these operations will perform the same concessions as we see Binance performing now.
The transition of large projects from proper crypto protocol to government corporation may or may not affect your investment. It will definitely affect your privacy, tax rate, mobility, freedom, etc., and so forth. If you are in crypto for more fiat, you can skip the rest of this article. If not, you may want to pay attention.
So everyone made a big deal about Gary Ginsler becoming the new SEC chair because he gave a lecture on bitcoin 30 years ago that made it to Youtube. The shills were ecstatic. Ginsler will certainly understand us, they shilled. We'll have free rein to hold our bags to the moon and eventually cash 100% of this crypto shit back out to fiat to buy vacations and hookers like we've secretly been wanting to do since we bought in!
But before anything, before he's a technologist or an academic, Ginsler is a government stooge. Check his employment record; he always has been. He was brought into the SEC chairmanship in part to help the US government figure out how to get the most value out of crypto. Not to educate people, not to bring the two sides together. To take value. The broke ass US government needs to leech off crypto to maintain its farce for a few years more — anything to keep the game going. Plus it's a power move. Citizens with autonomy? Oh no, no, no. Can't have that.
Ginsler recently published a short missive on crypto on the SEC website. Go read it if you like, but the jist of it is that 99% of crypto is companies selling unregistered securities. As a company selling an unregistered security, the SEC has jurisdiction. If the SEC has jurisdiction, you owe us bribes to stay in business. If you don't pay those bribes, we'll put you all in jail or something.
Mind you, none of this matters for the truly decentralized projects with anonymous owners and no physical headquarters. The SEC/US can't touch those. You know — using the structure that Satoshi actually pioneered.
I've been to a few crypto events. I can tell you most people are using crypto as an easy money grab from unsophisticated investors. The US government doesn't care about your unsophistication. If it did, it wouldn't have greenlighted the Regulation A status that allows con men to raise money from poor folks in full view of the law. No crypto "company" is doing anything worse than any money raised under Regulation A. The only difference is that the SEC controls Reg A companies closely.
Projects like Chiliz fit into this basket. I have it on good authority that the head of Chiliz himself views the Chiliz token as worthless and laughs at people who buy it. His fiat investors are the ones with equity in the company. The Chiliz token confers none of these rights. The same is true of many centralized projects with CEOs. They use you for bootstrapping, but not for bootstrapping tech. The token raises are to bootstrap an MVP (minimum viable product) that gives traditional investors an excuse to dive in. The centralized projects care only about the fiat. After they get that, they dump the token on you and leave it to live or die, whatever. If the community believes in the token enough, it may survive a bit. If not, it dies. But the founders have what they want, which is coke and hooker fiat money. You have no equity in these projects. You are literally just playing a game.
Watch what Ginsler does closely. If he allows this type of structure to proliferate even after "regulation," you can be sure the government is only in it for their cut and not to protect you. If that is the case, and it probably will be, you'll be on your own to determine if your investment in tokens confers real equity or if the founders are partnered with traditional VCs and government to redistribute your little bit of wealth to them through a legalized scam.
In the meantime, I'll be using these projects as a stepping stone. I'll be out of all that shit at the end of this bull run.
If you're unsure of which projects I'm talking about, that can be debated. Centralization/defi is not a black/white issue. It happens on a scale. Binance with 12 validators can be easily smacked around even without a physical location. Ethereum has more validators, but the economic and intellectual value is centralized enough that the protocol could possibly be influenced by nation-states. Russia and the US will probably have a nice time arguing over who owns Vitalik. Bitcoin is still the king here because it's the only project decentralized enough to survive a state-level attack. It rejects regulation automatically, which is why Ginsler doesn't attempt to talk regulating it in his little talk. He focuses on the low-hanging fruit — the projects with the greedy CEOs who want fame and hookers more than decentralization, censorship resistance, etc. Fat clowns like Charles Hotchinson and liars like Alex Saunders. Crap like BSV and pieces of shit like Roger Ver. And they'll capitulate, with influencers like Anthony Pompliano and Ivan on Tech cheering them on.
It behooves you to know where you stand politically as well as financially before investing heavily in crypto. Do you support projects like Cardano and Solana, which will certainly work with regulators, eventually make you KYC, and track you everywhere? Or do you support projects like Bitcoin and Olympus — projects that provide new protections and freedoms for individuals while they make us rich? Or does your strategy include both? I'm actually interested to know and why.
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