You should probably invest in crypto

This post is more than a year old. The information, claims or views in this post may be out of date.

Obvious upfront disclaimer: Don’t take financial advice from the internet, least of all me. And don’t sue me if you make a bad bet and lose – like I’ll point out below, this is still an extremely volatile space.

I have “mixed” opinions on cryptocurrencies. On the one hand, I’m enormously frustrated with the quasi-religious evangelism that tells people how crypto is the future of literally all money, and their pooh-poohing of simple technical concerns like “how do you scale to hundreds of millions of concurrent real-time transactions”.

Crypto as we know it today won’t replace money as we know it today. Some future optimized version of crypto might, but it will be unrecognizable as compared to the algorithms of today.

On other aspects, I’m a lot more positive – the technology behind it (blockchain) is the real revolution, and a completely new way of thinking about storing, processing and ensuring the integrity of data. New applications built on blockchain technology have enormous potential, and it’s all open-source.

The reason I put “mixed” in quotes is that these positions seem inconsistent to fans of crypto (“how can you not believe it’s the future of money if you think it’s so cool?”), which is an argument entirely on its own, and more than I want to get into right now.

So what are cryptocurrencies? As simply as I can explain it: digital gold.

A bit more complex: A shared ledger, secured by a mathematical algorithm, calculated across tens of thousands of computers which will reach consensus on whether or not a single transaction on it is authentic.

In other words – it’s impossible to forge, and it’s impossible to steal (short of actually forcing someone at gunpoint to transfer coins to you). It is possible to lose, however (as the upcoming BIP 148 hiccup might end up demonstrating), and of course it’s always possible that governments might decide to regulate or outlaw it altogether.

It’s also impossible to devalue by manipulating volume – each currency has a set upfront limit of how many coins will ever be issued, and free markets are entirely responsible for determining the value. I’m sure this is one of the more attractive aspects to the folks who deeply distrust any government, bank or other institution.

Which is where the volatility comes into it. It’s very unlikely, but it is possible at any point that one of these currencies (and there are many) could simply stop operating.

Their existence depends entirely on the network of miners (networked computers) that agree to process transactions for that currency, and at some point, regular external market forces could make some of the smaller currencies untenable.

There’s also the regulation aspect hanging over this. Apart from the obvious criminal uses of a nearly-untraceable cryptocurrency, there’s the wildly unregulated speculation going on right now.

As of today, Bitcoin alone has a USD-denominated market cap of over $40 billion. What this means in practical terms: A good couple of investors (in the hundreds-of-thousands range by now, at least) have bought Bitcoins in exchange for real money, likely in the hope that it’ll appreciate in value over time.

That’s a really big roulette wheel, and so far (for the most part) it’s paid off quite handsomely. It has a lot of the hallmarks of historical gold rushes: Someone’s found something of value, and people are tripping over each other to get in on the action.

That value, though, is likely to only ever exist in the realm of financial speculation. Bitcoin is a desirable, limited-edition asset, which in and of itself is enough to drive speculators and gamblers to it. At $40bn, you have to assume there’s a lot of interest in keeping the entire system propped up, almost entirely for its own sake.

Which is not necessarily a bad thing, and it’s why I’m optimistic about crypto. $40bn is technically a tiny market cap, compared to assets like gold ($7 trillion) – but it has proven itself over the last few years to be stable and growing.

And it can only grow. Sure, getting into Bitcoin today is hard. If you’re planning on buying hardware and setting up as a miner, you better hope you can get free electricity – otherwise you’re losing money the moment you turn that machine on.

The market can always expand, though, and this is the main reason for my optimism. Bitcoin is the largest, oldest and most well-known, but it’s by far not the only cryptocurrency that can be traded for fiat. Here’s the top 10 by market cap, as per


Each symbol there represents an entirely different blockchain – a different asset. And while a single currency has a set limit on the amount of coins it can produce, there’s no limit to the amount of currencies that can be set up.

Unlike gold, wine, art or land, cryptocurrencies can be forked and spun up infinitely. As an asset class, it can expand to soak up every bit of market demand. Every person in the world, theoretically, could have holdings in at least one cryptocurrency.

So why the title of this post, and why do I think it’s worth investing in? Simple: It’s still early days, and it’s still got lots of room to grow.

With the amount of interest and investment going into the underlying systems, and the value of owning some cryptocurrency (both inherent and perceived), they’re all likely to continue to grow in value over the long term.

Today, a single Bitcoin costs around $2’500. There’s no reason to believe it won’t hit $10’000 someday. The same is true of most of the currencies in that screenshot above – whatever the cost is today, there’s a good chance it’ll be a great deal higher in a few years.

My quick anecdote on this: In January I moved R800 into a local crypto exchange, then found out they wanted to do KYC processes over unencrypted email, got annoyed, asked for a refund, and was denied. So in frustration I just cut my losses and forgot about it.

Until a few days ago, when I remembered the whole saga and logged in to see if anything had changed. And one thing had: In around 5 months, my R800 investment in Litecoin had turned into R4’720.

That’s a return you’re not going to find anywhere else – which is what makes it simultaneously alluring, and incredibly risky. There could just as easily have been a crash that wiped out my R800 forever.

Which is why I started small, and would advise anyone else interested in this to do the same. I’ve got accounts on three different exchanges, and holdings in two different cryptocurrencies. Every now and then when I get a bit of spare cash left over that I can afford to save, I move some of it into (what I now consider) my cryptocurrency portfolio.

Between all that spare cash, accumulating over time, it’s added up to very decent growth. As of today, that rate is sitting around 35%, and I’ve been doing this less than a year. That’s an absolutely insane growth rate as compared to other investment options.

And it could all disappear tomorrow, leaving me with absolutely no recourse. Which is why, as tempting as it is sometimes, I’m not gonna bet the farm on this just yet.

What it is, though, is the single riskiest position across all my investments, and the one that’s most likely to yield big returns in a short space of time. I’m expecting (and somewhat hoping) that this growth trend will continue for the next few years, too.

But I’m also expecting that at some point, all the valuations might just evaporate overnight, and I would have done no better than slowly setting that cash on fire. Tempered expectations are pretty much a requirement if you’re gonna ride this roller-coaster – at least, in my experience!

If you’re a South African and you want to get started, is your best bet. Otherwise, and are good options.

Nothing in this post should be construed as financial advice. Please consult a professional before making incredibly risky investment decisions. 

Casting off for new shores

This post is more than a year old. The information, claims or views in this post may be out of date.

One thing I’ve learned this week – even if you know about the sunk cost fallacy, it can still somehow creep up on you unexpectedly.

Writing has been a lifelong dream for me. For about as long as I can remember, I’ve always been fascinated with stories, and would constantly dissect and re-imagine them in new ways.

But it never felt like the right time to actually write. The reasons are varied, complex, mostly depressing, some aggravating, and all in the past – the sum of it is that I’ve never really been able to settle on something that I actually wanted to do, and as a result of that paralysis, have done largely nothing.

Last year, May 2016, I redid this blog – archived all the old content, changed the domain name (supremely happy to have landed, let me tell you), and wrote this introductory post.

Fast forward a year, and while I’ve done some measure of that privately, I haven’t done nearly enough of it publicly. What I have done, instead, is retreat back to the same comfort zones I’ve always had.


Towards the end of 2016 I started getting agitated that I wasn’t making progress with my writing, and decided to tackle it as a pure productivity problem. People are writing and publishing books every day – there has to be a system that will work, right?

That’s where the idea for Write500 came from – my own desire to set specific goals that I could hit, every day, and make progress as a result.

But then my comfort zones kicked in.

When I talk about the “sunk cost fallacy”, the first assumption you might make is that I’m referring to the time I spent on this specific project – which is a factor. Over the last few weeks I’ve been working on Write500 more or less because it exists, and because I know there are people that are interested in how it evolves. Not so much because I think it can actually solve the problems I need it to solve.

So that’s one level of fallacy right there – working on something because I’ve been working on it before, and the cost of killing it is somehow (inexplicably and irrationally) unacceptably high.

But there’s another level to this, and it’s only in this last week that it’s really been driven home for me: My career so far is, itself, a sunk cost.

My approach to solving problems is almost always rooted in software, which shouldn’t be a surprise – I learned to program at a very young age, and because of my knack for it, I was able to get a job, which I was then able to turn into something resembling a career.

As a result, when I’m deciding the best way to add value to the world (which I believe is something we should all try and do, in our own way), my main inclination is almost always software. I keep coming back to it, thanks to how far its gotten me in life so far.

Over the last year though, that inclination’s been challenged somewhat. Last year around this time, I was in the process of handing over my biggest freelance client to another agency, thanks almost entirely to burnout.

The idea of working late nights developing software for paying customers had lost its appeal entirely, despite how absolutely brilliant it was to be able to monetize my nights and weekends, and build up some savings as a result.

I’ve had a similar inclination at work, too – whenever a new problem presented itself, and if it could be solved with some custom development, that would always be the first suggestion I’d make.

Which had not been a problem, really, up until the end of 2015 – I had latitude to develop things that I thought needed to be developed. The change of my job role had also forced me to change the way I solve problems – including occasionally not solving them at all.

I imagine it’s at this point that a lot of developers would quit out of frustration – feeling like they’re adding no value, or taking umbrage at not being able to use or grow their skills.

I didn’t quit, though, and I ended up learning something new: That it was possible for me to be productive (and add value) without writing a single line of code.

I’m sure that seems obvious to a lot of people, but it’s only recently become clear to me how big of a mental shift this actually is. And it brings me back to the thing about writing.

I’ve wanted to be a writer for as long as I can remember – the idea of spending time in my own world, creating characters and stories within it to share with other people – is incredibly appealing.

But with my very narrow view of problem-solving, I’d always look at my lack of writing as something that could be solved with software. And so instead of actually writing, I’d set out to shave as many yaks as possible.

It’s the old “if all you have is a hammer” adage – the problem of me not writing started to look like a nail. A problem that could be solved if I just found the perfect combination of tools, frameworks, and the right approach.

Which as it turns out, is horribly wrong – at least for me.

Most of my work on Write500 was underpinned by that. The first, most basic thing it was meant to do was deliver daily writing prompts (a tool I always wanted to build anyway). But beyond that, I wanted Write500 to solve two other problems: Be a daily go-to tool to produce new content, and be a revenue-generating SaaS product.

Except that neither of those things (and it’s obvious now) actually move me any closer to me being a writer. It’s actually the exact opposite: I’m creating new tasks for myself that specifically prevent me from writing, but justify it by telling myself that once I build this, I’ll be equipped to write.

Which is bullshit, and I think I always knew it was bullshit, but I let myself believe that anyway.

Another big dimension to all of this is that I’m doing all of this work in my spare time. What little of it I have, anyway. Time to work on these sorts of things is a scarce resource for me, and I haven’t been making very good use of it by focusing almost entirely on things that move me in the exact opposite direction of my goals.

And so last night, while processing all of this (and failing to fall asleep) I came to the eventual realization that I have to kill Write500. Specifically, the extensions to it – the daily prompts thing is still quite useful, and low-maintenance on my part.

Once I actually go through the process of producing and publishing something, I’m sure I’ll uncover lots of problems from that experience – and I might find a gap that could be filled with software.

For now, though, I’m rolling everything back and parking this project. A part of me still hates to do it, but the reality is that I have limited time available to me, and I’m not actually making the progress I want to make.

Instead, I now know I should be focusing on the things that are outside my comfort zone: Namely, writing things I think are shitty, and sharing them with people that might have nothing good to say about it. Which will be a start 🙂

Mid-year Resolutions

This post is more than a year old. The information, claims or views in this post may be out of date.

It really does feel like January was just the other day – hard to believe we’re already halfway through 2017. It must be some sort of bad joke.

The passage of time hit me properly today when a conversation about cryptocurrencies came up. I remembered that just a few weeks ago, I had dumped a bunch of money into a local exchange and bought some, and I had abandoned that exchange after an issue over support.

(A few weeks ago == January. It’s been five months, but we’re not mentioning that.)

I logged in to find out my R800 investment had somehow turned into R4700, thanks to the exploding value of Litecoin. I could have had an even bigger return had I logged in just a few weeks prior, but I was happy enough with the 500% growth over 5 months.

That experience brought me back to January, for which I still had the unresolved support case sitting in my inbox, along with a pile of notes and plans and ideas. I had sketched out a few things I wanted to achieve in 2017, and it feels like I’ve just now come up for air and half the year is gone.

Among the many things I’ve wanted to do, is actually get a book published. It’s why I started Write500 in the first place, and it’s why I’ve tried to build a daily writing habit. I’ve done okay in some weeks, badly in others, but still not enough to actually get a first draft done.

It reminds me (rather annoyingly) of a conversation I had back in 2007. Back then, at the ripe old age of 18, I had already decided I was going to write and publish something, and declared I’d have it done by November of that year. So naturally, someone went and marked that up on a calendar.

November 2007 came and went, no novel.

And now it’s ten years later.

It’s my fault, really, for not putting writing and writing-related activities higher on my list of priorities. I figure if you’ve passively thought about doing something for more than ten years, it’s probably something you actually have to do, right?

So the first thing I’m going to try doing differently, is writing here a lot more, not averaging a month between posts. I’ve always tried to have a topic, theme, structure, and something useful to say before saying it – and that’s led to me more or less saying nothing, since the bar to actually blogging is set so high.

The other thing I’m going to do is actually try pulling away from tech a lot more. I decided ages ago that I needed to spend a lot more time on creative work, and yet somehow the majority of the content posted so far this year is tech-related.

I guess old habits are really hard to break!

So for this 2017 Mid Year’s Resolution, I’m going to try writing more frequently, and less about technology. That seems like a good enough place to start.