Friday, January 26, 2018

Past the tipping point

I set out in January 2010 to re-invent myself from being a masonry contractor running my own small business in Toronto, Canada, to intending to be doing a startup.
This was in order to achieve a long-time goal of mine, and in recent years, it also became obvious that my body wouldn’t hold for a very long time doing hard labor anyway.
I haven’t been able to gain traction with my startup in three iterations of it; however, spending tens of thousands of dollars of my own money financing the project has been the best education program for this college-drop out. Throughout this marathon, I have learned enough about technology and business, by going through the motions of doing a bootstrapped startup, as well as consuming a large volume of content in the form of incessant reading of books, blogs, Twitter feeds, listening to podcast episodes and even conference attending, to appreciate what it takes to do a startup and how unlikely I would be to succeed all the way with one given the fact that I am a non-technical solo founder, without a degree, in his 50’s at the time of writing. Not impossible, of course, but I can feel what the odds factually are in my bones at this point.
But this is a journey, and along the way, the proverbial “luck is opportunity meets preparation” had to manifest itself, as I always knew it would as I was persisting forward; and thus entered cryptocurrencies.
I found out about Bitcoin in late 2013 and bought a bunch in 2014 and sort of put it all on the back burner. Even as I wrote my last blog post in early October 2017, I was only thinking of crypto as an emerging opportunity, and not as my new calling having arrived.
Things went parabolic shortly after though. Having time on my hands, I quickly rounded up all my free air dropped coins: meaning that as the owner of a bunch of Bitcoin, I also received equivalent amounts of Bitcoin Cash, Bitcoin Gold, SuperBitcoin, Bitcoin Diamond, etc., and I put those to work by trading them for other crypto, for example, buying a ton of Verge (XVG) for a fraction of a penny in November, only to see it explode to $.27 cent in December.
Having followed hundreds of VCs on social media in the last seven or eight years, in addition to consuming all the related content I could ingest, has really been key to forming my own crypto-investing thesis. I was able to predict at least four times which coins were about to explode, as well as place many other bets that I know will pay off handsomely in the future.
My thesis looks like this at this point:
1) Be as early as possible investing in a coin.
2) Never sell at a loss, so hold on to those coins.
3) Be perceptive as to when to sell each coin so as to maximize returns without being too greedy — more art than science.
4) Maintain a diversified portfolio of coins that can be expected to generate a high yield, keeping in mind that, on the long run, the projects that will do best are the ones that can execute on delivering value and creating utility.
5) Skim off a portion of the profits to be taken off the table.
6) Do the work: study every coin on as well as every upcoming ICO, study the offerings, do as much due diligence on the team as is available on the internet, go through the social media info related to the coins I’m interested in to get a sense of the team’s dedication level as well as the community’s involvement and sentiments. Watch the market like a hawk.
About ICO’s, I pass on 99% of them, but there are some gems in there too.
I’ve also learned a thing or two about cashing out: it can be a bit of an ordeal. First — and I’m not sure about the rest of the world — but for us in Canada, if one expects the fees to be reasonable and the transaction safe, it has to be done gradually due to the $25,000 daily and $200,000 monthly limits imposed by Kraken (one of the two main Canadian exchanges) for Tier 3 verified users; and $500k monthly for Tier 4. There are other ways for doing it, such as selling your Bitcoin at specialized ATM’s, or selling in person through a third-party website, but the fees are excessive in the case of the former, and the transaction is obviously riskier in the case of the latter; and both are not suited to be doing large amounts at one time.
The process of cashing out was also made trickier than I had originally anticipated as my bank manager wasn’t feeling comfortable at first with cash showing up into my accounts from an overseas corporation. Once I proved I wasn’t up to anything nefarious, and once he checked with “the powers that be”, it was fine.
And don’t forget the tax implications to cashing out one’s crypto. In my case, I’m being taxed for my crypto profits on a capital gain basis. Speaking of which, I was slightly ‘vexed’ initially about how much tax I had to set aside and will have to remit to the government. It’s one thing to ‘pay-as-you-go’ yearly with your income tax when you own a small business, but it’s quite another thing to pay off a quarter of a lump sum that you’ve totally made happen through your decisions of what to trade and precisely when. It feels like robbery at first, but my takeaway is this: for the middle class, income tax is something one is subjected to; whereas, when you’ve made more money, it becomes the price of living in your country. In other words, the more a person has the power of choice as to where to live, paying taxes just becomes a part of the cost of living in that country and is something you get to have more control over, as you could move off to another country, for instance Thailand, once you have your ‘fuck you’ money.
So where does this leave me? Well, after soon-to-be spending the bulk of February in Aruba with my wife, I’m only going back to masonry work this year for about three to four months because of prior commitments for which I’m being counted upon, otherwise I might figuratively be throwing my trucks and equipment off of a cliff…. :-)

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