How to profit from cryptocurrency without getting scammed

Ideally, you'll be like Papa Joe who was paid $289 million for two pizzas.

In this article, you will learn about the following topics:

🎲 Speculation by billionaires is not endorsement of cryptocurrency

When a famous billionaire purchases a large amount of a cryptocurrency, many people interpret this as an endorsement of that cryptocurrency, but they are mistaken.

One case involved a famous trillionaire purchasing a large quantity of bitcoins. For example, if he purchased as much as one billion dollars worth of bitcoins, then this looks like a huge investment and giant display of faith in bitcoin, but actually, if his total wealth is approximately one trillion dollars, then one billion dollars is only 0.1% of his wealth.

When you have a trillion dollars to play with, the act of investing 0.1% of your money in something means nothing. You can easily afford to invest 0.1% on a whim with little or no consideration or worry. It is practically risk-free when you are risking only 0.1% of your wealth.

Alternatively, when you have a trillion dollars, an investment in bitcoin can be your backup plan D after your backup plan C after your plan B after your plan A. It demonstrates no faith in bitcoin.

Now, if he invested 50-70% of his entire wealth in bitcoin, then you would have a real reason to wonder why he decided to do this, but he would never do this, because it would be extremely stupid, and he is not stupid.

📈 Why you should never spend bitcoins

When you pay somebody using bitcoins (or other cryptocurrency), you are actually overpaying the person by a large amount. The amount of your overpayment varies. It can range from double the money to hundred of times the money.

When a business accepts bitcoin or other cryptocurrency as payment, they hoard all of the bitcoins that they receive from customers (you could do this as well). They never spend the bitcoins that customers give them, rather they hold onto the bitcoins as a long-term investment.

For example, imagine you spend 100 crypto-coins to buy a used car. The dodgy car dealer happily receives your 100 coins, and then he holds onto them as an investment. After two years, the value of the coins has increased by 12 times (for example). Thus, in effect you paid him 1200 coins (12 × 100) when you spent your 100 coins two years ago.

For an example based on real life, consider the example of Larry Honyeck. In the year 2010, Larry spent 10,000 bitcoins to pay Papa Joe's Pizzeria for two pizzas. If Larry had simply held onto his bitcoins instead of spending them, then they would have been worth 289 million dollars 10 years later at the end of 2020.

If Papa Joe was smart, he held onto each-and-every bitcoin that people foolishly gave him as payment for pizzas. So, in effect, Larry paid Papa Joe $289 million for two pizzas. This is the reason why you should never spend your bitcoins or other cryptocurrency.

In other words, despite the fact that “cryptocurrency” is called a currency, cryptocurrency is not currency. It is actually a betting/investment game.

So, why do people call it a “cryptocurrency” when it is not a currency? You can guess the answer by yourself. It is simple. They are conning you, obviously.

Here is another reason to never spend your bitcoins: The U.S. Internal Revenue Service (and the taxation agencies in other countries) know that “cryptocurrency” is actually a form of investment/speculation and not a currency, therefore they tax it as an investment.

This means that any time you sell your bitcoins for something else, you are required to record your losses or gains and report them in your annual tax return. In Tax Form 1040, the IRS asks whether you have ever received, sold, sent, exchanged, or otherwise acquired any cryptocurrency. Thus, you must record and report every bitcoin/cryptocurrency transaction. Additional tax payments may be required.

Remember, “cryptocurrency” is not currency, rather it is a kind of gambling game, and the name “cryptocurrency” is just used for misleading marketing/advertising purposes.

🔬 The one key piece of info about cryptocurrency

Here is the key piece of information that you need to know about bitcoin and other cryptocurrencies.

If you research bitcoin, there is a large amount of complex information and many details to learn, and it will give you a huge headache if you try to understand all the details of it, but fortunately most of the information about bitcoin is irrelevant, and you do not need to learn it.

The key thing that you really need to know about bitcoin (or other cryptocurrency) is that it is a fancy version of the banana taped to the wall. Do you know about the banana? “Comedian” is a 2019 artwork by Italian artist Maurizio Cattelan. This “artwork” appears as a fresh banana affixed to a wall with duct tape.

The banana on the wall was originally sold for US$120,000. In November 2024, following a highly publicized tour and bidding, the banana sold at Sotheby's for $5,200,000 (or $6.2 million after fees).

Like other pieces of “artwork”, people treat the banana as a gambling/investment game. Obviously the banana is worthless in reality, but if you purchase it, you can make a profit if you can find another person to purchase it for an even larger price at a later date. You can do the same with cryptocurrency.

The guy that bought the banana for $6.2 million – is he stupid? No, because he will most likely succeed in convincing somebody to purchase it for an even larger price in future. Therefore, he will make a profit from his bet/investment.

In economics, this is known as “the greater fool theory” – all you need to profit from an investment is to find somebody willing to purchase the asset at an even higher price.

So, every person that buys and sells the banana makes a profit until eventually one final owner is stuck with the banana and unable to find anybody else willing to purchase it at an even higher price. At this point, the banana game ends, and the loser is the last/final owner of the banana.

Bitcoin operates using the same principle as the banana, meaning bitcoin investors are relying on the greater fool theory, the same as investing in the banana.

So, just like the banana, you can profit from bitcoin, but not if you are the sucker that purchases it for the last time and ends up stuck with owning it permanently. Eventually nobody will be willing to purchase bitcoins anymore, just like how eventually nobody will be willing to purchase the banana anymore. It is simply a matter of time.

In other words, bitcoin and the banana are a form of time-limited gambling – a betting game where you bet that you can purchase it and later sell it for a higher price and not be the final sucker that is stuck with it and cannot sell it anymore.

We believe that the current owner of the banana is not the final sucker that will get stuck with owning it permanently. The banana will surely be sold at least one more time for an even higher price than $6.2 million.

Likewise, the current owners of bitcoins are not the final suckers (in the year 2025), but it is only a matter of time until the game ends, and then the final owners of bitcoins will be the losers of this betting game, because they will be stuck with worthless bitcoins that they cannot sell anymore, just like the eventual final owner of the banana that cannot sell it anymore.

Calling it an “investment” makes it sound legitimate, but in reality it is a gambling game and not a true investment. So-called “cryptocurrencies” are not currencies and not investments, rather they are gambling games that run for a limited number of years.

🦉 Do or don't?

We are not recommending either way that you do or don't participate in any “cryptocurrencies”. That is your own decision to make.

Some people obtained a huge profit from speculation in bitcoin – primarily those people that joined the game years ago when it was new. The longer this game runs, the riskier it becomes, and the harder it becomes to profit from the subsequent suckers that join the game at a late stage.

If you want to engage in cryptocurrency speculation, then it is important to try to estimate the approximate timing of the eventual collapse (end game) of the particular cryptocurrency and get out of the game (sell everything) well before it collapses and the price/valuation plunges towards zero.

It is unwise to speculate in cryptocurrency (or anything else) if you cannot afford to lose all of the money. It is also necessary to avoid panic. Even after receiving advice not to panic, people often panic anyway, and they sell everything when the price/valuation plunges instead of simply waiting for the price to rise again in future.

“Nerves of steel” are needed – this is much easier to do if you can afford to lose the money, and you do not really care so much if you do lose all of it. Ironically, those people that are willing to lose it all often end up making the biggest profit, provided they are not excessively careless or reckless.

🎈 How a bubble crashes and burns

A lot of borrowed money (“margin debt”) is used to speculate in the bubbles that occur in stockmarkets and cryptocurrencies. A bubble is especially fragile and prone to crash when it is built almost entirely on debt.

When a market or cryptocurrency starts to drop in value, companies and retail investors get “margin called” by their creditors, meaning they must repay the debt to the creditor, and so they are forced to sell their assets or stocks. Hugh sell-offs crash the bubble.

A cryptocurrency exchange operates successfully when everyone wants to purchase that cryptocurrency. It fails when everyone wants out and reverses their direction of trades. A cryptocurrency exchange does not have sufficient liquidity to support a large number of people exiting at the same time. The shit hits the fan, and the exchange goes bankrupt.

🛐 When a cryptocurrency becomes a mini-religion

Cryptocurrency fanatics are insane. It is not insane to exploit a cryptocurrency temporarily for profit, but it is insane to be fanatical about it.

People have a bad habit of turning stupid things into mini-religions, and then they do stupid things such as failing to get out before the final collapse, even when the signs of the imminent collapse become unambiguous.

Some people have suggested using cryptocurrency as the financial foundation for a country. Knowledgeable people laugh their asses off at this ridiculous suggestion. A serious foundation is physical gold. Although gold is certainly an imperfect solution, it is much less bad than using cryptocurrency as the foundation.

👔 Consult a professional advisor

⚠️ Important: Please visit a professional financial/investment advisor and a certified accountant before making any financial or investment decisions.

Disclaimer: This article does not contain any financial/investment advice or tax advice. Do not make any financial or investment or taxation decisions based on the information in this article. This article is provided only for the purpose of entertainment and curiosity, and it is not intended to provide complete information or advice.

🤍 You can read more of my articles in my online magazine “Tackle & Succeed”.

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Copyright © 2025 Joycerocracy Publishing. This article is provided only for the purpose of entertainment and curiosity. Please visit a professional financial/investment advisor and a certified accountant if you want/need actual advice.