The data problem of cryptocurrency investors

Cryptocurrencies are hot. So hot, that a lot of people get burned because they follow bad advice. It's time to build better tools and make better content. When we act as one and help each other learn we all benefit.

The data problem of cryptocurrency investors

The cryptocurrency investor community is experiencing an exponential growth in both number of investors and total investment amount. Those who have invested early are now thinking of low-risk, long term portfolio strategies to preserve what they've earned. Those who have joined recently are betting their hard earned money on altcoins that they consider to have a bright future. Programmers, entrepreneurs and venture capitalists are now attracted to the space, and they relentlessly study the new science of cryptoeconomics and the ICO business model. Blockchain mining is attracting more capital as well, with miners in some cases buying out the whole supply of GPUs of entire nations.

indices and btc

One of the reasons for such growth is the disruptive nature of cryptocurrencies. For the first time in our civilization's history you can transact with untrusted third parties without requiring a government to function as the warden that can enforce the contract with its military might.

The biggest breaking change this caused is that it opened the door to the world of investing for the underserved cohort of people that don't meet the required minimum investment amount threshold. If you can buy state lottery tickets and play in casinos without requiring government's approval, you should be able to invest in companies too. Especially since more and more companies are choosing to stay private indefinitely[1].

blockchain wallet count chart

And yet, most of the newcomers invest based on what they hear in telegram groups, chanting "moon, moon!" and trying to ride the "whale" wave. This behavior is largely caused by the novelty and technical complexity of the whole cryptocurrency idea, but also because the public at large doesn't have access to diverse historical datasets and high quality educational content that they can learn from.

ICO stats Q2 2017

This irrational herd behavior hurts not only the people who make unwise investments, but also the community as a whole. It destabilizes the market rates, contributing to an already high volatility of cryptocurrency prices. And this, in turn, scares new potential investors and hurts adoption.

We firmly believe that by educating the ones that seek to learn more about trading and investing we can make the market much more efficient, transparent and safe.

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  1. Read this article by QZ for an overview ↩︎