How to Learn Crypto if You're Starting Today
Level 1 - NGMI
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When we got into crypto there were very limited resources. There was no “DeFi Education” to walk us through the basics beyond Bitcoin and Ethereum.
We’ve spent thousands of hours reading, writing, investing and trading crypto over the years and we want to help you cut your learning curve short so you don’t have to go through the extended trial and error process we went through.
In today’s free post we’ll go over how you should learn crypto to maximize your gains while minimizing time and mistakes. This post is a roadmap for anyone looking to learn crypto in 2023 quickly and efficiently.
1. Bitcoin
You might want to skip ahead to DeFi or NFTs because they sound like the next big thing while Bitcoin is over ten years old. Don’t overlook the basics. To truly understand the power of crypto as a technology, you have to start with Bitcoin.
In particular, you want to focus on the how and why behind what makes Bitcoin work.
There is a globally distributed network of computers competing to secure the Bitcoin network. The people operating these computers don’t need to talk to each other. Instead, simply by operating in their own self interest, they benefit the network. This is extremely powerful and changes the way market participants interact.
To learn Bitcoin, you must understand:
Self custody
The double spending problem and how Bitcoin solves it
Public and private keys
Proof of Work
Distributed ledgers
Pseudonymity
2. Ethereum
Much to the chagrin of Bitcoin maximalists, new entrants to crypto will inevitably end up on Ethereum.
Why? Because the future of decentralized applications are being built on Ethereum. Ethereum enables smart contracts
To learn Ethereum, understand:
Similarities and differences to Bitcoin
Proof of Work vs. Proof of Stake
The Ethereum Virtual Machine
Ethereum accounts
Smart contracts
Scalability limitations
The Ethereum roadmap
3. Stablecoins
Stablecoins support the very system crypto is intended to disrupt - the fiat banking system.
However, stablecoins are the third largest cryptoasset by market cap and one of the most useful inventions to come out of the crypto industry. Three of the top ten cryptoassets are stablecoins. The most liquid pairs on-chain are stablecoin pairs. The total market cap of stablecoins is about the same as Ethereum’s market cap.
Stablecoins are too big to ignore, and we anticipate this crypto subsector will continue to see massive growth in usage alongside the broader crypto sector.
To learn Stablecoins, understand:
Stablecoin use cases
Types of stablecoins (centralized vs. decentralized; fiat-backed vs crypto backed, etc)
Algostables
Tether and Circle
DAI & MakerDAO
4. History
How can you understand where we’re going if you don’t understand where we’ve been?
Luckily, you don’t have to brush off old history books from the library. Mark Bitcoin as the starting point of crypto history and get up the curve on the major events.
To learn crypto history, understand:
Bitcoin & Ethereum
History of DeFi
History of NFTs (e.g. CryptoKitties, CryptoPunks, etc.)
Bitcoin booms and busts
Silk Road
Crypto and the gambling industry
Mt. Gox
VC funding in crypto
FTX implosion (too soon?)
5. Applications
Now you can start getting to the fun parts, shifting focus from the history of crypto to the future. Applications are extremely broad, and new applications are being born (or dying off!) every day.
Applications are where you’ll come across both opportunity and risk. A lot of your investing in crypto will be in tokens issued by applications.
To learn about applications, understand:
The largest DeFi applications (Aave, MakerDAO, Curve)
Tokenomics
A framework for evaluating crypto applications
Crypto gaming (the good, the bad, the ugly)
6. Infrastructure
Think of infrastructure as anything that enables crypto use cases and applications. Simple example would be a cross-chain bridge. Data, storage, and security also fall inside of this bucket.
To learn about infrastructure, understand:
Cross-chain bridges (e.g. Synapse Protocol)
Dune Analytics
CoinGecko API
DeFi Llama
Etherscan
Arweave
7. Layer 2s and Scaling
Layer 2s are part of the consensus layer of crypto.
To learn about layer 2s and scaling, understand:
Optimism
Arbitrum
Optimistic rollups
zk rollups
8. Security
Security is multi-faceted in crypto. There’s personal security and protocol security.
Crypto consists of complicated, open source code that secures billions of dollars in assets. Hacks are far too common, so understanding security will help you avoid getting rugged.
Crypto is also entirely self custody. That means you should be very careful about your real world and online footprints when it comes to crypto. You want to avoid being targeted by the wrong types of people who might think you have a bunch of cash under your mattress.
To learn security, understand:
Setting up a crypto computer
Enhanced VPN setup
How to sign transactions securely
Security audits
Coding and software
Common sense (don’t show off!)
9. DAOs and Communities
One of the key, society-shaping features of crypto is the ability for people to transact pseudonymously online. This allows online communities to interact in entirely new ways. One invention has been the “Decentralized Autonomous Organization”, or “DAO”. DAOs are typically (but not always) tokenized communities of distributed participants pursuing a shared objective. That can range from purchasing the constitution to building a DeFi application.
To learn about DAOs, understand:
How DAOs hire
How DAOs compensate talent
Unique nuances of doing business with anons
Why most DAOs have failed
10. Financial Knowledge
Crypto is the technology of money. It’s a new way to transact peer to peer, and also an entirely new asset class. But. That doesn’t mean the basics of economics are no longer relevant. Ponzi schemes are not suddenly sustainable under this new paradigm. Market psychology is still important.
Financial concepts you need to understand at least to a basic level:
Three statements (income statement, balance sheet, cash flow)
Interest rates
General capital structure concepts (debt / equity)
Competitive moats
Derivatives
How exchanges work
Portfolio construction and risk management
Looking to save time and avoid expensive mistakes?
If you understand all these concepts in-depth you have a foundational knowledge of the important parts of crypto. The rest of your expertise will come through application of your knowledge, ongoing research and day to day upkeep with the industry.
We estimate this roadmap will take 4-6 months to get through if you were to research everything yourself. If you have a lot of time and low funds (i.e. a high school student) then this is absolutely the path we’d recommend. There is some benefit to this approach, since you’ll stumble into interesting pieces of information here and there that may lead you down rabbit holes. But you’ll probably also go down a lot of rabbit holes that are either a waste of time, or worse, wrong.
If you’re looking to cut this learning roadmap from 4 months to about 2-3 weeks, we’d recommend joining the academy, a video course with over 40 lessons that covers what we’ve listed above and more. Hundreds of people have joined and the feedback so far has been great.
Either way, the roadmap to crypto is now in your hands - so no excuses!
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Until next time..
Disclaimer: None of this is to be deemed legal or financial advice of any kind. These are opinions from an anonymous group of cartoon animals with Wall Street and Software backgrounds.
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