A thread on cryptocurrency:

In early 2018, I decided blockchain technology (what crypto is built on) was for real and here to stay. However, it was hard to pick which cryptocurrency to buy. Some people say to buy the ones with scarcity built in, because prices will go up. But...

That's not how it works. Scarcity only creates value when there's demand. Think beany babies. There was scarcity (dolls were "retired") and prices soared for a while because there was demand. After a while, the fad died out and prices fell. There was still scarcity, but no demand

With crypto, it's trying to think of the systems people actually believe in and will use. There's a lot of good ideas out there, but no one's using the system. And if it doesn't achieve adoption, there's no value. So what to buy in 2018?

I chose Ethereum $ETH because of its real-world utility. You can build on it with smart contracts, and given it's already "name-brand" status, I believed Ethereum was as good a choice as any. Yet in keeping with how I invest, I finally decided to split my crypto investment in two

I reluctantly chose Bitcoin $BTC. To me, it seems unlikely people will actually buy and sell with it. And the "store of value" argument doesn't really create enough demand IMO. But, I conceded that if there was ever a system people would believe in, it would be the original

I split my crypto investment 50/50 and committed to not touch for five years, even if it dropped to zero. Right now, Ethereum is slightly down for me. Bitcoin has soared. Combined I'm up around 80%.

In retrospect, it seems I was right about Bitcoin in the sense it doesn't seem like people are using it as currency. But of late, corporate players have begun to "buy in" to the system, which is creating demand.