Casual Investing In Crypto, Blockchain & Ten Notable Projects

I started learning the Web3 and crypto space actively in early 2021 by investing relatively small amounts in different cryptocurrencies, using different wallets and exchanges. It surely felt complicated as I am not a too technical person. But I learned it.

Please note that this article includes no financial advice. 

I made multiple 10-15x profits but lost basically as much with other coins, partially due to some inexperience. What I instantly understood is that this is a fun and developing space where it probably makes sense to be in as early as possible. At that time, I didn’t know so much about the possible risks involved, but today, I am shedding a bit of insight into what I’ve learned. 

The blockchain and decentralized web landscape have experienced remarkable growth and innovation over the past few years. The total market capitalization of cryptocurrencies has skyrocketed, reaching over $2 trillion by September 2021, showcasing the increasing mainstream adoption of digital assets. The market cap today is $1.22 Trillion as we faced a bear market not too long time ago. Additionally, the number of global blockchain wallet users has also grown exponentially, indicating a rising interest in decentralized technologies.

This rapid expansion has paved the way for numerous projects that have emerged, disrupting traditional industries and providing decentralized solutions across various sectors. 

In this article, we will explore e.g. ten different Web3 projects that have gained remarkable traction, sometimes relatively quickly, and delve into some of their key data points, such as market capitalization, transaction volumes, and all-time highs. These projects are listed in chronological order, from the oldest to the newest. As we dive into these projects, we'll gain insights into the factors that contribute to their success and their potential impact on the evolving Web3 ecosystem but we’ll also analyze some of the risks involved and how you should think about it. 

When considering investing in cryptocurrencies, it's essential to be aware of the doubts and fears that people, including non-crypto-experienced investors, may have regarding this relatively new asset class. Here are some of the most common concerns:

1. Volatility: Cryptocurrencies are known for their price volatility, which can lead to significant fluctuations in value within short periods. This volatility can be intimidating and may result in substantial losses if not managed carefully.

2. Regulatory uncertainty: The regulatory landscape for cryptocurrencies is still evolving, with governments and regulatory bodies worldwide trying to establish frameworks to govern their use. This uncertainty can lead to sudden changes in regulations, impacting the value or legality of certain cryptocurrencies.

3. Security risks: Although blockchain technology is inherently secure, there have been instances of hacking, phishing attacks, and fraud within the cryptocurrency space. Investors need to be vigilant about their digital assets' security and the platforms they use to trade or store them.

4. Lack of understanding: Cryptocurrencies and blockchain technology can be complex and challenging to grasp for individuals without prior experience. This lack of understanding may lead to poor investment decisions or susceptibility to scams.

5. Market manipulation: The relatively smaller size and lower liquidity of the cryptocurrency market compared to traditional financial markets make it more susceptible to manipulation, such as pump-and-dump schemes, which can impact prices and investor confidence.

6. Environmental concerns: The energy-intensive nature of mining for some cryptocurrencies, such as Bitcoin, has raised concerns about their environmental impact. This has led to criticism and negative sentiment, which can affect the value and perception of these digital assets.

To ensure that potential investors are well-informed about the risks associated with investing in cryptocurrencies, they should:

1. Conduct thorough research: Understand the basics of blockchain technology and the specific cryptocurrencies they're interested in investing in. Research the project's team, use case, and potential for long-term growth. It's essential to be well-informed before making any investment decision.

2. Diversify investments: Avoid putting all capital into a single cryptocurrency. Instead, diversify investments across multiple digital assets or sectors to spread risk and minimize the impact of a single asset's poor performance.

3. Practice proper risk management: You can set realistic investment goals and establish a risk management strategy. This may include setting stop-loss orders, determining a maximum investment percentage for each asset, and maintaining a long-term perspective.

4. Stay updated on news and developments: Regularly follow industry news, regulatory updates, and other relevant information that may impact the value or future prospects of cryptocurrencies. Being well-informed will help investors make better decisions and navigate the constantly changing landscape.

5. Secure digital assets: Use secure wallets and two-factor authentication to protect cryptocurrency holdings. Additionally, consider using hardware wallets for long-term storage of significant amounts, and always keep backup copies of private keys.

6. Be cautious of scams and fraud: Be vigilant in spotting scams or fraudulent schemes in the cryptocurrency space. Avoid investments that promise guaranteed returns or seem too good to be true. Always verify important information and do due diligence before investing.

7. Be prepared for potential losses: Understand that investing in cryptocurrencies carries inherent risks, and there is a possibility of losing some or all of the invested capital. Only invest what you can afford to lose and maintain a balanced investment portfolio that includes more traditional assets.

By being well-informed and practicing caution, potential investors can make more informed decisions about investing in cryptocurrencies. It's essential to be aware of the risks and challenges associated with this emerging asset class and take appropriate measures to mitigate those risks.

I can say that investing in cryptocurrencies can be both exciting and rewarding, but it's vital to approach this new asset class with a clear understanding of the risks and challenges involved. By following the guidelines mentioned above and maintaining a neutral, responsible and well-informed approach, potential investors and users can navigate the world of cryptocurrencies with greater confidence and success.

But let’s take a look at some of the most established projects in the Web3 space:

2009: Bitcoin. The first and most well-known cryptocurrency, Bitcoin was created by the pseudonymous individual or group known as Satoshi Nakamoto. It introduced the world to blockchain technology and set the stage for the development of the decentralized web. As of July 2010, bitcoin began trading at US$0.0008, climbing to US$0.08 by the end of the month. The cryptocurrency then slowly rose into the US$10 range until it spiked to US$250 in April 2013. In September 2021, Bitcoin's market capitalization was around $900 billion, and its all-time high price for the coin was approximately $64,800 in April 2021. As of today March 20, 2023, when I’m writing this, the price of BTC is $27,607 so it’s higher now than it has been in 9 months. 

2015: Ethereum. Ethereum is a decentralized platform that enables developers to build and deploy smart contracts and decentralized applications (dApps). Ethereum has a market cap of approximately $400 billion as of September 2021, with an all-time high price of around $4,350 in May 2021. It is home to thousands of dApps, which have processed billions of dollars in transaction volume.

2017: CryptoPunks. CryptoPunks are a collection of 10,000 unique, algorithmically generated pixel art characters that were among the first non-fungible tokens (NFTs) on the Ethereum blockchain. The project gained significant attention and paved the way for the NFT boom. In 2021, the total sales volume for CryptoPunks exceeded $1 billion, with the highest sale being a single Punk NFT for more than $11 million.

2017: Chainlink. Chainlink is a decentralized oracle network that provides reliable off-chain data to smart contracts. It has a market cap of around $13 billion as of September 2021, with an all-time high price of about $52 in May 2021. Chainlink has established partnerships with numerous high-profile projects and companies, making it a critical component of many decentralized applications.

2017: Decentraland. Decentraland is a decentralized virtual world built on Ethereum where users can create, explore, and trade virtual assets. Its native cryptocurrency, MANA, has a market cap of around $1.5 billion as of September 2021, with an all-time high price of approximately $1.60 in April 2021. Decentraland has hosted numerous virtual events and seen significant growth in its user base and the value of virtual land sales.

2017: Aave. Aave is a decentralized lending and borrowing platform built on Ethereum. As of September 2021, the platform had over $16 billion in total value locked (TVL). Aave's native token, AAVE, had a market capitalization of approximately $4.8 billion as of September 2021. Aave's all-time high price for its token was around $666 in May 2021.

2018: Axie Infinity. Axie Infinity is a play-to-earn game built on Ethereum that allows players to collect, breed, and battle fantasy creatures called Axies. The project experienced rapid growth in 2021, with its native token, AXS, reaching a market capitalization of over $4 billion by September 2021. Axie Infinity's all-time high price for its token was around $94 in October 2021. In terms of revenue, Axie Infinity generated more than $2 billion in sales by November 2021.

2018: Uniswap. Uniswap is a decentralized cryptocurrency exchange built on Ethereum that allows users to trade ERC-20 tokens without intermediaries. By September 2021, Uniswap had processed over $300 billion in trading volume since its launch. Its native token, UNI, had a market capitalization of around $15 billion as of September 2021. Uniswap's all-time high price for its token was around $44 in May 2021.

2020: BNB chain (previously known as Binance Smart Chain, or BSC). BNB Chain is a blockchain network that is focused on providing a smart contract platform with high throughput and low transaction fees. As of September 2021, BNB Chain had processed over 14 million daily transactions, showcasing its rapid growth and adoption. BSC's native token, BNB, had a market capitalization of around $68 billion as of September 2021. Binance Coin's all-time high price was around $690 in May 2021.

2020: Polkadot. Polkadot is a decentralized platform designed to enable Web3 applications and facilitate cross-chain communication. Launched in 2020, the project quickly gained traction, with its native token, DOT, reaching a market capitalization of approximately $30 billion as of September 2021. Polkadot's all-time high price for its token was around $49 in May 2021.

2020: Polygon (previously known as Matic Network). Polygon is a layer 2 scaling solution for Ethereum that aims to provide faster, more efficient transactions while maintaining security. It has experienced rapid adoption, with more than 3,500 decentralized applications (dApps) built on the platform as of September 2021. Polygon's native token, MATIC, had a market capitalization of around $9 billion as of September 2021. The all-time high price for MATIC was around $2.68 in May 2021.

These projects have paved their way and I would expect them to gain more traction in the future. As cryptocurrencies continue to gain mainstream acceptance, it's crucial for investors but also users to stay educated and adapt their strategies to the ever-evolving landscape. By approaching crypto investments with a solid understanding of the technology, market dynamics, and potential risks, an investor can better position themselves for long-term success while minimizing the chances of significant losses.

The rapid growth and success of the Web3 projects discussed in this article demonstrate the potential of decentralized technologies to transform industries and reshape the way people around the world interact with the digital realm. The expansion of blockchain and decentralized web technology offers numerous benefits and opportunities, as well as some risks and challenges.

Benefits of blockchain and Web3 technologies include:

1. Financial Inclusion: Decentralized finance (DeFi) platforms have the potential to provide banking and financial services to unbanked and underbanked populations, enabling greater access to financial resources and fostering economic growth.

2. Security and Transparency: Blockchain technology offers enhanced security through decentralization and cryptographic techniques. Transparent, tamper-proof ledgers can help reduce fraud and corruption, increasing trust in various sectors.

3. Privacy and Control: Web3 technologies enable individuals to have greater control over their data, helping to protect privacy in general, and potentially reducing the power of centralized entities that currently dominate the digital landscape.

4. Efficiency and Cost Reduction: Blockchain and smart contracts can automate processes, reduce intermediaries, and lower transaction costs, leading to increased efficiency in various industries, from supply chain management to governance to property rights management.

As Web3 technology continues to evolve, we can expect further adoption and expansion of use cases, such as digital identity management, voting systems, and different decentralized governance models such as founding a decentralized LLC, which is already possible. However, with these advancements come risks and challenges, such as:

1. Regulatory Uncertainty: The lack of clear regulatory frameworks in many jurisdictions may pose challenges for the growth and adoption of Web3 technologies.

2. Scalability and Energy Consumption: Blockchain networks sometimes might face scalability issues and high energy consumption, which may hinder their adoption and impact their sustainability.

3. Security Risks: Despite the inherent security of blockchain technology, vulnerabilities in smart contracts or other components may expose users to potential risks, including hacking or loss of funds.

From an ethical and psychological perspective, the increasing adoption of blockchain and Web3 technologies could lead to a shift in societal values, placing greater emphasis on privacy, autonomy, and decentralization. However, it is essential to strike a balance between the benefits of decentralization and the need for responsible governance, consumer protection, and ethical use of these technologies.

Moreover, the success of the highlighted Web3 projects serves as a testament to the potential impact of decentralized technologies on our lives. As we continue to explore the possibilities and challenges that come with the growth of blockchain and Web3 technologies, it is crucial to develop a responsible and ethical approach to their implementation, ensuring a future that benefits people worldwide.

From an investor's perspective, the crypto markets have exhibited strong growth and development in recent years, which could indicate potential opportunities for investment in crypto and Web3 projects. However, it's essential for investors to conduct thorough research (DYOR), understand the risks involved, and make informed decisions based on their financial goals and risk tolerance.

The potential of blockchain technology to disrupt traditional industries and create innovative solutions across various sectors is real. As the technology continues to evolve, it's essential to stay informed about these developments and understand how they can impact our lives and businesses. 

Based on my personal experience in the space as a user, investor and dev, I was thinking about how to tell someone who is thinking of stepping into the crypto space, that it's a good place to be. Just be aware of the risks - like in investing in general. I hope you liked my article!