Supporting crypto in political campaigns is a 'no brainer,' author Nat Eliason says
07/23/2024 21:04
Nat Eliason gambled on bitcoin at the height of crypto mania. His new book presents a cautionary tale for newcomers.
Nat Eliason is the author of Crypto Confidential: Winning And Losing Millions In The New Frontier Of Finance, a propulsive, first-person narrative account of the tumultuous world of cryptocurrency. The book chronicles Eliason's path to gaining more than $10 million in crypto only to see his fortunes precipitously collapse. It captures the frenetic energy of the 2021-2022 crypto mania, offering readers a chance to see the ups and downs of crypto's volatility. Below, Eliason spoke to TheStreet Crypto about his experiences investing in the crypto industry, and also explained why political candidates should pay attention to crypto.
TheStreet Crypto: Can you tell us about your first experiences in crypto, particularly your farming experience and the lessons you'd give to first-time investors exploring bitcoin?
Nat Eliason: I first heard about Bitcoin around 2011 when people were mining it on gaming PCs. I tried it for a day, found it boring, and forgot about it.
In 2017, I did some ICO (initial coin offering) speculation but lost it all. When 2020 and 2021 came around, I initially thought farming was just like speculating on ICOs again. But when I saw people playing these farming games — getting tokens, creating liquidity, and redepositing liquidity tokens to get more tokens — it was exciting and fun, like a video game.
However, I quickly realized I was picking up pennies in front of a steamroller. It only took one of these ventures to go poorly for me to lose everything I had won. This realization made me less interested in speculative farming and more interested in learning programming and joining a team to build something. At least then you have a floor — you might get paid in tokens that could end up worthless, but you're not likely to go negative like you can with pure speculation.
TheStreet Crypto: In your view, is crypto still a good investment for newcomers to the industry?
What I always tell people is this: if you're not going to quit your job and spend your entire life in Discord and Telegram, fully immersed in the ecosystem, then just buy bitcoin, maybe some Solana, and don't look at it — check on it every couple of years.
Bitcoin is definitely still going to be here in 10, 15, or 20 years. Ethereum is probably still going to be a thing, and Solana has a decent chance of being a slightly more risk-on version of that portfolio. Everything downstream of that, I'd be a lot less confident about holding for 10 years.
I definitely think the big cryptocurrencies should be part of basically everyone's portfolio (not financial advice), but don't mess with whatever new coin is launching, don't try to bet on projects that have just become big, and don't speculate on NFTs unless you're living in the space and know when to get out.
TheStreet Crypto: What advice would you give to beginners who struggle to differentiate between real and scam projects?
If you're going to get into putting money into brand new things that are launching or gambling on "shitcoins," the only way you're really going to learn how to tell what's good or not is to lose some money.
Be intelligent about your initial bet sizing. Set aside a specific amount, say $100 or $1,000, and then take 1/20 of that as your bet size. This way, you get 20 bets to experiment with.
Take notes on why you think a project might be worth investing in. By putting some skin in the game, you incentivize yourself to figure out how the world works, do your research, and learn about the warning signs. You're going to lose some of it, maybe all of it, but you'll definitely get an education along the way.
What you really don't want to do is go all-in on a single project based on a friend's recommendation. For every story you hear about somebody making it big that way, there are tens of thousands of people losing everything.
The first thing you have to think about is the incentive of the person sharing information with you. Often, when they're sharing information publicly, it's because they want to gain clout or because they want you to be their exit liquidity — they want you to buy what they've already bought so they can cash out.
What you want is to actually make friends with people who you can talk about these ideas with and share tips. Even if you have no friends in crypto, you can start to build that kind of network by getting very active on Twitter or Discord, interacting with what other people are doing. Many people have gained respect on Twitter just by making an anonymous account and actively replying to everything. Eventually, you start getting invited into private chats where the real conversations happen. But if you want to cultivate that kind of "alpha," you have to be very patient, try to give information and be useful first. You can't just hope that it's going to pop up on Twitter one day.
TheStreet Crypto: What's the message of Crypto Confidential?
A big part of it was capturing the mania of 2021 to 2022, which was such a crazy and special time. I'm fully bought into the idea that crypto is going to be a huge thing in 5, 10, 20, 40, 50 years and become a core part of our financial life... It will be interesting to read stories from these early days. Unlike other narrative-driven crypto books that were often written by outsiders or focused on criminal actors, I wanted to provide a perspective of someone who was both a "degenerate gambler" and an engineer in the space. My goal was to capture that experience while sneaking in some crypto education for non-crypto people.
TheStreet Crypto: How do you see the political mainstreaming of crypto in 2024?
It's really promising. It's changed dramatically in the last few weeks, with Republicans suddenly becoming very pro-crypto. Trump is very pro-crypto, having received donations from the Winklevoss twins and the Kraken CEO. The Democratic side is at least a lot less anti-crypto than it used to be.
Politicians are realizing that you don't really get any votes by being anti-crypto. There's no significant anti-crypto voter base. However, there are a lot of people who want to vote for someone who is pro-crypto, and there are many people with a lot of money who are pro-crypto.
It's becoming a no-brainer for political campaigns to support it. We're seeing a sudden shift with the surprise ethereum ETF approval and Solana ETFs being filed. It's encouraging to see the U.S. trying to accept and adopt crypto, ensuring that innovation is happening here. There's also likely a political incentive to see crypto as an opportunity to expand the dollar's hegemony, entrenching it as the de facto currency around the world.
This interview has been edited and condensed.