I finally jumped into crypto: here’s what happened

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It’s 2021, so I’m late for the crypto night.

My first crypto that I didn’t even buy, I got it for free. A few months ago, this awesome game I play on the blockchain, Splinterlands (CRYPTO: SPS), started rewarding its crypto players. This is in addition to the non-fungible token (NFT) assets that I have been earning since 2019. It’s a free game, but if you want to start owning the monster cards and earning crypto, you have to pay $ 10.

I have a lot of sweat equity in this game, maybe 1000 hours, so I won a lot of cards. My assets are now worth around $ 20,000. About six months ago my cards were worth $ 2,000. If you want to learn more about crypto and NFTs, this is my # 1 suggestion: start playing this unique game on the blockchain.

My biggest crypto investment is still my bank stock, Silvergate Capital (NYSE: SI). Silvergate is the bank for all crypto exchanges like Coinbase (NASDAQ: COIN), as well as all institutions interested in owning this new asset class. Silvergate is a small bank with a market capitalization of around $ 5 billion. I bought my first shares in 2020 at around $ 16. It is now trading at $ 197 a share.

Image source: Getty Images.

After both of my crypto investments skyrocketed in 18 months, it occurred to me that maybe I should buy coins. So last week I opened an account with Coinbase and made my first purchases.

I bought a basket of altcoins

I could have just bought Bitcoin (CRYPTO: BTC). It is the first crypto, the most famous crypto, and it is still the most valuable crypto. Its market capitalization exceeds $ 1,000 billion. It’s the safest coin (I think), but I still don’t own it. I am looking for next generation crypto and coins that could make big moves.

Because I learn as I go, I opted for the shopping cart approach. What I hope is that one of my investments will increase. So by spreading my bets, I hope to increase the odds that one of my coins will skyrocket over the next couple of years.

The first coin I bought was Solana (CRYPTO: SOL). It’s a tiny position, under 1% of my assets. In fact, if you add up all my crypto purchases, it’s still less than 1% of my assets. I made small purchases because I still don’t understand this asset class very well, and I’m learning as I go. A Solana coin costs around $ 194 right now. I tried to buy exactly one part and found it was impossible. These are all fractions of shares. So now I own 2.6 Solana coins.

On Coinbase I had around 120 coin options that I could purchase. And the vast majority of these pieces, I had no idea what they were doing. So I visited hundreds of websites. Lots of those pieces that I knocked out right away. I didn’t buy Uniswap because I hate pink unicorns. I didn’t buy Pirate Chain because I don’t trust hackers, and it’s not on Coinbase. (I guess they don’t trust hackers either).

I bought Crypto.com (CRYPTO: CRO) because I thought their Matt Damon ad was pretty cool. Which is a horrible reason to buy a part. So I sold this one. And then the darnthing increased by 40% in a matter of days. I bought Ankr (CRYPTO: ANKR), Internet Computer, (CRYPTO: ICP), Filecoin (CRYPTO: FIL) and Numeraire (CRYPTO: NMR).

I had to pay a commission for every purchase. At the end of this process I said, “Dude, Coinbase made me a lot of money.” And the next day I bought shares of Coinbase.

Why I make small investments in crypto

A lot of people buy crypto because they want to make a quick buck. And I love quick money, don’t get me wrong. But that’s not the main reason I buy crypto. Almost all of these parts represent a new wave of computer engineering. These companies are working on blockchain technology. And I am convinced that the blockchain will revolutionize the internet.

Blockchain promises to be faster, cheaper, and more secure than existing internet protocols. For example, Bitcoin has never been hacked. And it’s completely transparent. Every transaction that happens is right there on the blockchain. And Solana’s technology is super-fast. Visa processes approximately 1,200 transactions per second. Solana’s network now processes 50,000 transactions per second.

It is of course very risky to invest in crypto. The vast majority of these coins are issued by private companies. We do not have access to their finances. We don’t know how much (or how little) money these companies have. For a lot of them, I guess the crypto is funding the business. I expect a big wave of businesses (and parts) to disappear over the next few years.

On the other hand, I’m pretty sure blockchain is going to seriously disrupt some of my favorite stocks one day. So I make small purchases now, to invest in the future. But also (hopefully) protect my existing finances if and when blockchain technology is dramatically changing the internet and the world. I don’t know when this will happen. But it could be sooner than you think.

This article represents the opinion of the writer, who may disagree with the official recommendation position of a premium Motley Fool consulting service. Were motley! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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