Why do people say "speculating on coins is not as good as hoarding coins, and hoarding coins is not as good as mining"?

With the completion of the third Bitcoin halving and the approaching Ethereum 2.0 upgrade, the digital currency market has begun to pick up. The launch of Filecoin's second test has also boosted the trading of FIL futures. On May 30, the FIL6 futures on the GATE trading platform rose by more than 40% in a single day, reaching a high of $13.478, a new high in the past two years.

The skyrocketing price of FIL futures, coupled with the repeated postponements of the Filecoin mainnet launch time, has made the mining machine market a mixed bag, making many people increasingly hesitant. They are wondering whether to buy a mining machine and wait for the mainnet to be launched to mine with peace of mind, or to buy futures on the trading platform and hoard them, or simply wait until the mainnet is launched before speculating on the currency.

Among these three ways of participating in cryptocurrency, namely cryptocurrency trading, coin hoarding and mining, which one is better?

What are FIL futures and can we buy them?

As early as December 14, 2017, GATE trading platform launched the trading of FIL June futures. Currently, dozens of trading platforms have launched the trading of FIL futures and related derivatives. Moreover, the prices of different trading platforms vary greatly. The price of FIL futures on the WBF trading platform once hit a sky-high price of $6,800, surpassing the price of Bitcoin, the king of coins.

In this regard, Filecoin project leader Colin also made a statement on Slack: "Until the Filecoin mainnet is launched, Filecoin tokens cannot be bought and sold. We have seen many messages selling Filecoin SAFTs, tokens, and Filecoin derivatives on exchanges. These actions may be fraudulent; we strongly recommend that you stay away from any exchange or entity claiming to buy, sell, or trade Filecoin or its derivatives."

The so-called FIL futures refer to the transfer of Filecoin's SAFT (Simple Agreement for Future Tokens). For example, FIL6 refers to the linear distribution of SAFT shares in 6 months after the launch of the Filecoin mainnet. Futures can be simply understood as original equity transfer transactions. For example, before Alibaba went public, it issued original shares to some investors or institutions. If you participated in the subscription of original shares, before the stock was listed, you could transfer the original shares privately or on a certain platform, but the actual redemption of these shares still had to wait until the official listing.

Protocol Labs has repeatedly warned investors to stay away from Filecoin derivatives trading, and the official does not recognize the trading of FIL futures. The FIL futures we see now can be understood as the internal currency of the exchange, because FIL futures can only be bought and sold within a single trading platform and cannot be withdrawn for circulation. There are also some channels in the market that are conducting over-the-counter transactions for Filecoin token transfers. Because the identity authentication of this SAFT is very strict, it is difficult for ordinary retail investors to confirm its authenticity and ensure its effective transfer in the future, so the current over-the-counter transactions are very risky.

Formal FIL futures transfers require holding a legal SAFT, or signing a transfer agreement with an investor holding a legal SAFT, in order to have the ability to deliver; if the exchange does not publicly disclose legal documents that have the ability to deliver, there is a high possibility of fraud.

Therefore, for those who want to participate in FIL futures trading, everyone must learn more about whether the platform has the ability to redeem and the depth of transactions. Otherwise, do not blindly participate in FIL futures trading, as the risk is still very high.

Futures are risky, so is it okay to buy spot goods and store them after the mainnet is launched?

There is a saying in the stock market that "one profit, one break-even and eight losses". The number of people who make money in the secondary market will never exceed 20%, and the proportion in the cryptocurrency circle is definitely lower. Making money by trading seems simple, and a transaction is completed by buying and selling. Everyone wants to buy low and sell high, sell high and buy low, but in the end it becomes chasing ups and downs.

Let me tell you a story about “Brother 480,000 speculating in Bitcoin”.

On January 28, 2014, the price of Bitcoin was 4,800 yuan. Brother 480,000 used the 480,000 yuan savings of his family that they had saved for many years to buy a house, bought 100 Bitcoins, and started a live broadcast of his Bitcoin trading. His original idea was to turn the down payment into full payment, and preferably buy a car.

From January 2014 to June 2016, the price of Bitcoin fluctuated between 1,500 yuan and 5,600 yuan. However, Brother 480,000 chose to sell his Bitcoin at around 3,000 yuan on June 14, 2016, with a loss of 180,000 yuan.

When Brother 480,000 sold his shares, Bitcoin was experiencing its second halving and the market was gradually recovering. At the end of 2016, the price of Bitcoin exceeded 6,000 yuan. At the end of 2017, the price of Bitcoin reached a maximum of nearly 140,000 yuan. If Brother 480,000 could hold on, his assets would peak at 14 million yuan.

We have to admit that "keeping coins is harder than being a widow". Secondary market trading is not about trading skills, but more about mentality, especially in the cryptocurrency market with 7*24 hours of non-stop trading. In addition, leverage and contracts magnify human greed, making people feel that the cryptocurrency circle is a casino. In a casino, the probability of you making money from the dealer is almost zero. This is why some people say that leveraged contract trading is a sure death. There are very few people who make money by speculating in coins.

It is often the people with a Buddhist mentality who can make big money in the cryptocurrency circle. When investing spare money, choose mainstream currencies with appreciation potential, do not be emotionally swayed by short-term market fluctuations, grasp the big trends, and trade only once or twice a year or even several years.

Why is mining the best way to invest?

Mining is the most traditional way of investment in the blockchain field. Digital currency has risen because of Bitcoin, and Bitcoin is famous for mining. The bigwigs we see now basically started from mining. In the 2019 Hurun Rich List in the blockchain field, 9 of the top 12 were on the list because of mining. It can be seen that mining is the real secret to getting rich in the cryptocurrency circle.

Mining is like buying a laying hen that lays eggs. It lays one or two eggs every day. You can sell the eggs for cash, or you can hatch the eggs into chicks (for reinvestment).

We found that miners tend not to pay much attention to short-term fluctuations in the price of coins, because when the price of coins is high, the difficulty of mining increases, and the amount of coins produced is low; when the price of coins is low, the difficulty of mining decreases, and the amount of coins produced is correspondingly high. In addition, miners generally use hedging tools to lock in stable expected returns in the future.

Compared with hoarding coins, mining has a stronger ability to resist volatility risks. If you hold a large position in a certain currency and happen to encounter an extreme market like 312, where the price drops by nearly 50% in one day, you may have already sold your money. However, mining is a long-term output process, and short-term fluctuations do not have a big impact on the user's mentality, so investors who choose mining can often grasp the peak of the market.

Therefore, if you are optimistic about the future development prospects of Filecoin, the price of Filecoin after it goes online will definitely not be very low. Even if there is a chance that it will fall below the so-called issue price, it is estimated that it will be difficult for you to buy it. Mining is the most likely way to obtain Filecoin at a price lower than the public offering cost. In addition, mining naturally has the attributes of passive lock-up and long-term investment, allowing you to seize the long-term growth dividend of Filecoin.

At present, the mining machine market is mixed. With the launch of the second phase test network and the approaching launch time of the main network, investors must improve their cognition and learn how to select reliable mining machine manufacturers. Otherwise, if you make the wrong choice, you may not only lose all your money, but also miss the dividends of Filecoin.

For more information about IPFS and Filecoin, and for friends who want to participate in Filecoin mining, you can add Kuangge on WeChat (WeChat ID: kuangge2018) .