Recently while I was in Uttarakhand, I had an interesting conversation with an old friend that got me thinking about how we approach cryptocurrencies. 

My friend is a mountaineer by profession, born and brought up in a small village in the Uttarkashi district. On learning about her ambitious goals, I asked her if she invested, and where. To this, she said that she has a few fixed deposits. But the conversation quickly moved from FDs to mutual funds to equities to crypto (just like any investment conversation these days). And when it came to crypto, I saw her enthusiasm peak. Her viewpoint on this was, “It’s the fastest way to become a crorepati”.  

This got me thinking. How many of us get into investing in crypto only with the expectation of asymmetrical gains? Statistics show that it’s a lot of us. Over 10 crore Indians owned cryptocurrencies in October 2021, whereas the number of Demat account holders was around 7.3 crores during the same time. And why not? The way crypto is marketed, it seems like anybody can reach the moon in a matter of days. However, it’s not that simple (obviously). 

I like to think there are two ways one can approach the world of cryptocurrencies & digital assets, and perhaps anything in life. You can either go in with a Lottery mindset or a Learning mindset. Here’s what I mean by this.

Lottery mindset

  • Lottery mindset is the idea that there’s a shortcut to instant wealth by virtue of luck.
  • This mentality breeds greed and embraces uneducated risks. It’s the same mindset most people come with on roulette tables. There is no game strategy, betting merely on luck. Of course, there may be wins, but you cannot count on them. 
  • With a mindset like this, you are looking for instant gratification. The vision is very short term and that can make you impatient. With crypto being traded 24/7 a day, it can literally drive you crazy if you plan to go in with a short-term vision.
  • This may be counterintuitive, but even successful intraday traders don’t go by a lottery mindset. They practice what is generally known as technical analysis.
  • Random wealth is not sustainable. According to most studies, when you win the lottery, you are actually more prone to bankruptcy. Take the example of Sushil Kumar, who was Kaun Banega Crorepati’s first winner to win Rs. 5 crores in 2011. Within years, his life fell apart and he wrote a note titled, ‘The worst time of my life was after I won KBC’. Having a ton of money is not equivalent to having the skills to manage that money.
  • Wishing for asymmetrical gains is like wishing for overnight success. But we all know that there is no such thing. Anybody who gains success has spent years patiently working hard to achieve it. 

Learning mindset

  • Learning mindset is the idea that knowledge is endless, and can be acquired by anyone who is ready to put in the effort. This mindset sets you on the path to growth. With this mindset, you acknowledge that there are no shortcuts in life, and at the same time, nothing is impossible.
  • This mindset works wonders by compounding in the long run (in finance and in life). 
  • When it comes to wealth creation, the wealthiest people in the world are not the ones who got lucky, but the ones who’ve worked hard. Investors like Warren Buffet prioritize reading and learning, which is also the biggest factor for their success.  
  • If you approach cryptocurrency with a learning mindset you can not only gain from investing but also learn about other concepts of Web 3.0. (Smart contracts, NFTs, Metaverse, Blockchains, DAO’s, DAPPS, etc.) This can unlock more opportunities for you in the future.
  • When you approach investing with this mindset, the failures or losses incurred can be viewed as a learning cost.

As with my friend, it was easy for her to understand the importance of hard work. Living amidst nature teaches you practical life lessons. The best view does come after the hardest climb. Similarly, the best returns come after constant iterations of failing, learning, and building discipline.

And while it’s clear which mindset is better, it’s also very easy to fall prey to shortcuts. So if you’re someone who is investing in Crypto, or plans to do so, ask yourself these questions,

– Am I spending more time checking the price of my bitcoin? Or am I spending more time learning?

– Am I looking for quick money? Or am I here for the long term? 

– Can I build something meaningful and valuable on Web 3.0?

With a lottery mindset, you’re ngmi. But with a learning mindset, wagmi.

Rushina Thacker
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