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  • Why Does The Common Man Not Take The Time To Understand Investments? | Article By Dr. Amit Dua

Aurangabad21 hours ago

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‘Mo’ earned Rs 10 lakh from investing in cryptocurrencies last year. Want to know how? Before I say this, I want to make it clear that I am not trying to give any shortcut to any get-rich-quick scheme here. What ‘Mo’ did was purely scientific. Investing in cryptocurrencies has grown exponentially over the past three years, but most investments are based on assumptions and few people know where they are investing. Before we get to know about ‘Mo’, let’s find out what the common ‘Joe’ did.

‘Joe’ is a common man like you and me. Seeing the wind in crypto, Joe invested all his money in it. He believed that celebrities support crypto and every other crypto ad. He thought that I will do what everyone else is doing, so far he has lost Rs.10 lakhs. ‘Mo’ is smart and took the time to understand the project. He found blockchain crypto investing (initially coin, DEX, NFT) similar to investing in stock exchange. These coins are like shares of different companies. He only invested in blockchain projects he believed in. He explored the reasons for the high volatility in the crypto market, which was his greatest lesson. Since regulations regarding the crypto market are selective, companies can offer cryptocurrencies without a strong business model or solid product. The government knows all this and therefore does not encourage investment in it. These cryptos empower ethical entrepreneurs to get money that would otherwise take them years to raise. We invest in these companies through cryptocurrency. Crypto assets will increase in value if the company performs well in the future. However, for the past few years, this price hike has been based on net perception and market price. With this in mind, ‘Mo’ invested only 5% in the crypto market.

Most of us will spend 1000’s of hours earning money like ‘Joe’ and never take a minute to understand where we are investing it. And yes, ‘Mo’ didn’t spend all his savings or borrow for crypto. Due to this sole reason he was able to save Rs.10 lakhs. That was his earnings. In addition to taking responsibility for his own decisions, we can learn from Mo that whenever Mo learns something, he asks himself, How does this apply to me? Why is it necessary to implement it? When will he implement this? He must know about the company whose shares (cryptocurrency) he is buying. He contacted an expert, took time to gain his knowledge. He took action only after getting enough information. Remember, technology is neither good nor bad, as intended by the people who use it. Blockchain technology can solve problems in areas like health, supply chain, biometric authentication, finance. It can make organizations efficient by eliminating unnecessary processes, intermediaries. Trust the technology, but don’t blindly trust the people who use it. (These are the personal views of the author.)

Dr. Amit Dua Assistant Professor Bits Pilani, author of the book Machine Learning

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