Becoming a successful crypto investor is a long path that requires plenty of learning. You need to master areas such as investing psychology, the history of money, and the basics of blockchain technology & cryptography. Understanding the main events of the most important crypto project during the last ten years will also be of much use.
One of the most challenging things for newbies entering the crypto space is finding the signal through the noise. That is, where to start learning and what are the best materials. The crypto space feels overwhelming and difficult to keep up even for the full-time professionals in the space.
There is absolutely a lot of garbage content (and outright scams) online. If you’re serious and committed, the top priority is to identify the most legitimate sources to learn the fundamentals. And stick to these and avoid the rest. You need to get back to the basics. You need to get back to history before you can understand the present and future.
When I started learning the space full-time, it literally took me 2-3 months to identify what sources I should consume. Now I would like to share the best books I have identified.
Based on my experience, books are absolutely the best way to build up your fundamental understanding in the shortest amount of time. There will be a lot of “mind warp” moments. That is, you need to internalize many new mental models and concepts. It requires brain bandwidth. That is to say, don’t try to cram through these books. Read slowly and try to understand everything. Make notes. Avoid audio version. Read when you are at your full capacity (for me, it’s the mornings or weekends).
Forget the crypto news, crypto twitter, and other day-to-day content. Get the fundamentals right. Read 1-2 of these books, and you are already 90% ahead of everybody else. Read all of them, and you’re 99% ahead.
Here are my Top-6 books to become a crypto investor:
Psychology of Money
Bitcoin Standard
Infinity Machine
Layered Money
The Price of Tomorrow
Coingecko’s “How to DeFi”
Psychology of Money (Morgan Housel)
This is not a blockchain or crypto book, but it is pre-requisite learning before it is safe to enter the crypto markets.
This book discusses how you should think about your relationship with money and life. Money can screw people over. Some people neglect thinking about money in its entirety. Some people get so attached to money that they do whatever it takes to get more while neglecting everything else. Some people are good at making money but bad at staying wealthy. It’s all about behaviour. And behaviour is hard to teach, even to really smart people. Also, financial behaviour is difficult to model through successful friends, as you really cannot “see” their full thinking process or values behind the decisions. Financial literacy is more a soft skill than a hard skill, requiring plenty of self-reflection.
This book is full of great universal truths about how to think about money. Investing is a lot about psychology. This book will help you to build a well-rounded foundation before you hit the markets. And you need that, as crypto markets can be 10x more volatile than traditional stock markets.
Read my full review and best quotes of Psychology of Money on Goodreads.
Bitcoin Standard (Saifedean Ammous)
In 2013, as a young computer science student, I studied the Bitcoin whitepaper with great fascination from a technical perspective. I thought Bitcoin was interesting, but I only understood a limited view of its potential.
Many years later, I read the Bitcoin Standard book. It truly blew my mind. I cannot recall any other book that so dramatically shifted how I understand how money, currency, and store of value assets work. It’s truly a fascinating topic, going way deeper than one might initially think.
Essentially, this book tells about the history of money. To understand Bitcoin, understanding the history of money is the best place to start learning. It is a bit counter-intuitive, but trust me. I regret that I didn’t read this when it came out because I thought, “I already know what Bitcoin is”. Maybe I did, but I couldn’t put it into perspective.
I argue that when you combine the understanding of the history of money with blockchain technology, you simply cannot unsee the transformation we are going through.
See my full review of Bitcoin Standard on Goodreads.
Infinity Machine (Camila Russo)
After you understand Bitcoin and the history of money, the next logical step to understand is Ethereum.
Understanding Ethereum can be roughly split into two parts:
How Ethereum works technically and
Who created Ethereum, and what was the chronological founding story.
For the first question, you can find numerous technical videos on YouTube. Watch a few of them.
For the second question, how The Infinity Machine is the best book. Camila Russo has interviewed all relevant people involved in creating Ethereum and how it evolved throughout the years. It is a truly fascinating story, covering many active people in the early days. Many of those people have important roles in the crypto space today. E.g. you might have heard of Polkadot and Cardano. Both are Top-10 crypto projects, and the founders of these projects were originally co-founders of Ethereum. There are many other people besides Vitalik Buterin.
See my full review of The Infinity Machine on Goodreads.
Layered Money (Nik Bhatia)
Now that you understand Bitcoin and Ethereum, it’s perhaps a good moment to step back and look again at the big picture. Layered money tells the history of money and especially describes how the current 100-year-old financial system we have operates and how it has evolved. It’s not a pretty story.
The book consists of fascinating visualizations of different ‘layers’ of our financial system is based on. At the top of the pyramid, there is the hardest asset. It used to be physical gold for a long time. In 1971 Nixon administration abolished the gold peg. The highest layer changed. It wasn’t gold anymore. Instead, it was US Treasuries. This changed the whole fundamentals of the system. Essentially, money printing started on a large scale.
I have written a Twitter thread summary of the learning of this book. (I got a nice confidence boost as the book author Nik Bhatia himself retweeted this, yay)
The Price of Tomorrow (Jeff Booth)
This book hammers down one fact: Why deflation is the key to an abundant future.
If you’ve taken the Economics 101 class at the university, you’ve learned how deflation is bad. You’ve been most likely taught that 2% inflation is a good thing. I can understand if it is difficult to question this.
That said, I kindly suggest forgetting what you were taught in the Econ class and picking up this book. Jeff Booth shows you that we are indeed headed to the deflationary future, and it’s a good thing (at least for those who comprehend it), thanks to the incredible rapid advancement of technology during the last few decades.
The key thing to understand is that technology is intrinsically deflationary. Our financial system and its fundamentals were built in an era when labor and capital were almost directly linked. This era counted on growth and inflation. This era is over today, but we keep pretending that the old financial system still works.
Technological development has been extremely fast for the last 20-30 years. Most successful companies today are not successful because they have a huge headcount. Instead, they have software that scales worldwide even with a relatively small headcount.
The only thing driving growth in the world today is easy credit, which is being created at a pace that is hard to comprehend — and with it, debt that we will never be able to pay back.
How to DeFi (Coingecko)
At last, we get to some pragmatic stuff you can put to use immediately.
I’ve left this as the last book on the list to emphasize how important it is to learn the fundamentals first. That is, the previous books on this list.
However, if I’d start my learning path from zero, I’d perhaps read the other books and this book simultaneously. That is, consume this book not by only reading but also by performing test transactions through most of the protocols mentioned in the book.
Goingecko’s “How to DeFi - Beginner” is a hands-on manual on using the essential DeFi protocols. This list includes for example, Maker (minting stable coin DAI), Aave and Compound (borrowing and lending protocols), Synthetix (synthetic assets), and Nexus protocol (decentralized insurance)
The screenshots in the book might seem fairly outdated. That is, because they are, heh. Don’t worry about it. The protocols are fundamentally still the same. And this discrepancy just signals how fast space has evolved.
Goingecko has also published an advanced version of this book. It covers other fundamental stuff, such as DEXs (Decentralized Exchanges), Yield aggregators, Oracles, Multi-chain bridges, etc.
Both books are the best consumed by actually using the protocols. So, be ready to invest a few hundred bucks to ether and gas fees to get the most out of it. Nothing replaces the understanding of actually using the protocols and exploring the first-source documentation they provide. Coingecko guides you to the most relevant protocols to start this exploration.
The learning path after reading these books
Learning crypto is like learning mathematics or a new language. It just doesn’t make sense to skip the basic arithmetics or basic grammar before entering the more advanced stuff.
That is to say, the best order to learn crypto is roughly this:
History of money
Blockchain technology
Bitcoin
Ethereum
Basic DeFi protocols: Maker, Aave, Compound, etc
NFTs, DAOs, other L1s and L2s, all the new cool stuff
The books I recommended in this blog post cover points from 1 to 5. Try to focus on understanding these well enough before you ape too much ahead.
After you have built these fundamentals, the next step is finding the best online sources to follow. If you like to stay at the cutting edge, there won’t be many books, as the space evolves so fast. Instead, you need to find the best YouTube channels, podcasters, newsletters, and Discords to stay up-to-speed.
It took me a long time to find these channels, and I will compile a list of my favorite sources in the next blog post.
Stay tuned.
If you like my writing, you can find more here: https://mikkoikola.com/