When it all stops

The cryptocurrency world moves quickly.  Sometimes breathtakingly so.  Case in point:  the price of Devcoins started dropping like a rock over the past week.  Just last week I was happily selling Devcoins at 72 satoshis, then it dropped into the sixties, then dipped into the fifties.  When the price got below fifty I decided that was too low for me to sell anymore.  As the price dipped into the forties I figured I’d be waiting quite a while for the price to go back up.  I spent the entire morning and into the afternoon away from the Internet, and when I got back the price had shot up to 85 sat.  The DVC/BTC chart has a nice vertical line going from around 51 to 85.  That’s how fast things move in the cryptoworld.

The few days that I refused to sell my Devcoins gave me some time to think about a few things, the overarching one being what do I do if this ever happens again.

When I decided to become a Devtome author, I viewed it as a very short term opportunity.  You know the adage “If it seems too good to be true, it probably is.”  The Devtome is one of those opportunities that seems too good to be true.  Where else can you get paid quite well to write about whatever you want?  The very thought just brings up all these questions centering around where is the market for the thoughts of people like me?  This isn’t a put down, but I’m not a movie star or anyone famous, and in general the world doesn’t seem to be too interested in paying for the thoughts of ordinary people.  The Devtome does, and apparently has for quite some time.  I have questions about whether or not this can last, and I can think of all kinds of scenarios in which it all stops.  Then what?

Because I considered this to be a short term opportunity, I decided that I didn’t just want to cash my earnings and use them to pay a few bills.  It’s always great to pay bills, but if that’s all you manage to do, it’s so unsatisfying.  Scraping by another month can sometimes seem like a monumental accomplishment, especially in today’s economy, but it’s hardly something you feel like celebrating.

I wanted to do something with my earnings that would be more lasting, something that would continue to benefit me even if the source of funds (writing for the Devtome) dried up for me.  So I looked into crypto-securities and decided to invest in them, specifically in ASIC MINER securities, of which there are three that I know about.  ASIC MINER pays a consistent weekly dividend.  Once you buy the share, you get the dividend.  It’s not a lot for one share, but it’s there.  Income you don’t have to do anything else to get, also known as passive income.  This past week I was busy helping out with the neighborhood Vacation Bible School when my dividends came in.  That’s not what I’m used to.  Normally, I have to give earning my income my full attention–it’s active income.  But with stocks that pay dividends, it’s truly passive income as long as the stock is a good one.

There are way more Bitcoin denominated stocks than Devcoin denominated stocks, so in order to invest to the extent that I wanted to, I had to sell my Devcoins for Bitcoins before I could buy the shares.  This made me very vulnerable to the exchange rate, and for a few days my plans to buy up more and more ASIC MINER shares were put on hold.

But the dividends kept coming in.  I have a few other stocks which pay dividends more often than once a week.  They were all small, but at least they were there.  I was able to use them to buy more shares.

I also looked harder at how I could spend my Devcoins, and ended up paying way more than I thought I would ever be willing to pay for the Devcoin denominated ASIC MINER share.  Perhaps that was a dumb move which I’ll regret.  I might have waited had I known the price of Devcoins would suddenly rocket up.  What motivated me to pay as much as I did for those shares was the realization that there was no way I would sell my shares at the prices I hoped to pay for them.  Once I realized that all the dividends I’d earn from those shares would be tied to the BTC/DVC exchange rate the value of the stock went way up in my mind.  While I hope to never sell any Devcoins for less than 60 sat, it’s nice to have the option for a few of them.  If I earn my dividend at a time when Devcoins are worth 30 sat, I could turn around and sell them for 30 sat and recover all the Bitcoins that went into the original dividend minus the fees.  And if I manage to sell them for higher than that, say 40, then I’ve come out ahead.  So I invested a whole bunch of Devcoins into the ASIC MINER DVC pass through security when I didn’t feel I could sell them.  This does mean I can’t sell them now to take advantage of the new high price.  Such are the opportunity costs.  It also means I now have another way to earn Devcoins besides writing these essays.  I will probably keep buying, especially during dips in Devcoin price.  And I wouldn’t sell these shares for twice what I paid for them.

But in the mean time I am happy that the price of Devcoins is much better.  I plan to take full advantage of that price so that I can keep buying my stocks until the dividends actually add up to something I can use.  I’m really looking forward to that first day that I choose to cash out (rather than reinvest) a dividend, and know that next week there will be another one just like it.

I’m also well aware that more than the price of Devcoins could collapse in the future.  I could be building a house of cards.  The cryptoworld is so new that just about anything in it should be considered high risk.  The safe thing to do is cash out immediately and pay bills.  Right now I’m not into playing it safe.  I’m trying to be as smart as I can be, but I’m definitely not playing it safe.

Read When it all stops on the Devtome!

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