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As it turns out, cryptocurrency is no laughing matter.

Defining what it actually is can be crazymaking. And determining whether it’s a good investment for you may be even harder.

“You and I could both do a Google search that comes up with different answers,” admits Randy Accetta, co-chairman of the New Venture Development Program at the University of Arizona’s award-winning startup incubator McGuire Center for Entrepreneurship. “You can follow thread after thread and lose your mind.”

The industry is not only murky, he says, but perhaps murky by design.

“The way I see crypto is that it’s a new form of shared understanding of value,” he adds. “Some people ‘get it’ and are deeply engaged with it, and others … are very skeptical because it is decentralized (and) there is no civic national or international leadership managing it.”

For the dazed and confused, one of the best tongue-in-cheek descriptions of cryptocurrency was unleashed by British-American comedian John Oliver (cheeky host of HBO’s late-night news satire program Last Week Tonight). He summed it up as, “Everything you don’t understand about money, combined with everything you don’t understand about computers.”

So, first things first: What exactly is cryptocurrency? (Keep in mind: If you have to ask, ignorance is definitely not bliss in this particularly dynamic industry.)

Defining cryptocurrency for the uninitiated is something of a fool’s errand, and involves evolving, complex concepts like blockchain technology, a peer-to-peer network that maintains a ledger of all asset transactions; and encrypted digital wallets that are nonetheless viewable by anyone with an Internet connection. It also features a variety of hot-then-not currencies, including Ether (ETH) or Bitcoin (BTC) — the latter being the current king of the cryptocurrency market — along with trendy “meme” or “alt” coins that are particularly volatile, and can rise and fall in value based on something as simple as a cryptic tweet from Tesla and SpaceX head honcho Elon Musk.

Fun fact: Bitcoin, by far the most often-traded currency, was introduced to the public in the late 2000s in a celebrated white paper authored by “Satoshi Nakamoto” — who turned out not to be a well-respected Japanese economist, but actually the pseudonym of an inventor, or team of inventors, yet to be identified.

Another type of cryptocurrency is the verging-on-mainstream “stable coin.” They include Tether (USDT) or USD Coin (USDC), which are pegged to the most trusted fiat currency in the world: the U.S. dollar. And around the edges you’ll find non-fungible tokens (NFTs) like Dogecoin or Shiba Inu, which have a lighthearted, vaguely fanboy feel, and can represent virtual ownership of realworld items such as digital artwork and music.

All these various currencies come together (and are traded) at cryptocurrency exchanges like Binance or Coinbase, which are essentially digital currency bureaux de change that live online.

An avalanche of media coverage and splashy advertising campaigns have piqued interest in cryptocurrencies of all flavors. The phrase “crypto investing” can be especially seductive for novice investors, who may not even be able to describe what it is.

There also is a big down side to such investing: It is extremely risky and subject to wild value fluctuation.

Take 2018: According to digital currency news desk CoinDesk (owned by investment company Digital Currency Group), the market plummeted a stunning 85% that year — from a January high of $850 billion, down to a December low of $130 billion.

Given that volatility, it’s hard for novices to know when to “jump in” on the market. For example, in March 2022, overall crypto market cap came in at a heady $2 trillion — but was actually a steep decline from just a few months earlier, in November 2021, when the valuation was more than $3.1 trillion.

Numbers like that may be part of the reason why the Schwab Center for Financial Research continues to suggest that investors treat cryptocurrencies as “a speculative asset, primarily for trading with money outside a traditional long-term portfolio.” Whether crypto investing turns out to be the best thing since sliced bread, or the 21st century version of the Dutch “tulipmania” speculative bubble of the 17th century, remains to be seen.

Devotees claim that crypto’s strength is in its aspirations to “democratize value” on the internet, and to potentially free society of the need for banks, credit checks, money transfer fees and a variety of evils associated with mainstream, and arguably discriminatory, financial systems. “This idea of decentralized finance and decentralized information technology is going to free people to create new business models,” enthuses Shelly Palmer, a professor of advanced media in residence at Syracuse University’s S.I. Newhouse School of Public Communications.

Palmer, it should be noted, is more than an academic when it comes to the topic. He also is a New York-based business and technology consultant who heads up The Palmer Group, a consulting practice that helps Fortune 500 companies with a variety of technology, data science and marketing needs. Clients include Marriott International, Ford Motor Co., PepsiCo., Walt Disney and Delta Air Lines Inc.

He is careful to preface his comments with the reminder that he is not a licensed financial adviser, and is refreshingly frank in his assessment of novice investors and crypto investing.

“If you have not spent time to learn about decentralized finance, you shouldn’t touch this,” he states. “A lot of people have made that mistake, and the problem is that for every person who tells you they made $50,000 on an NFT, you’ll hear 100 stories where people … let’s just say, it didn’t work out for them.”

Definitely Not-Fun Fact: Earlier this year, celebrity “investor” Kim Kardashian, as well as the creators of the new cryptocurrency EthereumMax, were called out in a class-action lawsuit filed in the U.S. District Court for the Central District of California.

The lawsuit alleged that they knowingly defrauded investors by artificially inflating the price of the tokens — no relation to the established cryptocurrency “Ether,” by the way — in various social media postings. Allegedly, positive tweets on Kardashian’s 250-million-followers-strong Twitter account caused the currency value to skyrocket some 1,300 percent — at which point the coin creators sold their holdings at a handsome profit — before the value inevitably crashed to an all-time low a month later.

On the other hand, there is one celebrity who is speaking out strongly against the industry. Screenwriter and actor Ben McKenzie — star of popular TV shows Gotham and The O.C. — has co-written a book about the topic, Easy Money, with journalist Jacob Silverman of The New Republic.

McKenzie does bring a certain gravitas with him, as the holder of bachelor’s degrees in economics and foreign affairs from the University of Virginia. And in early March, the duo followed up with a weighty New Republic article featuring the pull-no-punches headline, “The Pandemic Sparked a Golden Age of Crypto Scams.” Its devastating subhead: “Depraved Grifters Compounded the Misery of COVID-19 by Defrauding Americans through Bitcoin, NFTs, and Meme Stocks.”

“Finally, I’ve found a crypto project worth shilling: my book,” McKenzie quipped in an interview with Variety earlier this year. “ Easy Money is about two things: money and lying — and while I know a little about the former from my econ degree, it’s the latter that fascinates me. Maybe that’s why I do it for a living (as an actor).”

It could be argued that the current state of cryptocurrency investing is very much in its Wild West phase, when brash adventurers streamed westward in the mid-1800s to seek their fortune during the California Gold Rush.

Accetta, who happens to hold a doctorate in American literature from the University of Arizona, finds the comparison intriguing.

“The idea of the Wild West in its mythic shape is ‘I can do something and be someone totally different — and all I have to do is navigate all the perils,’” he observes. “You may die of starvation, gunfights, the wagon falling on you — or you might find gold. And no matter what, you’re not who you were before.”

That frontier comparison has been made before — by none other than Erik Voorhees, founder of Switzerland-headquartered cryptocurrency exchange ShapeShift.

As Voorhees told Bitcoin Magazine in July 2013: “Bitcoin is absolutely the Wild West of finance, and thank goodness. It represents a whole legion of adventurers and entrepreneurs, of risk takers, inventors and problem solvers. It is the frontier. Huge amounts of wealth will be created and destroyed as this new landscape is mapped out.”

Given that analogy, you might expect today’s biggest cryptocurrency investors would be young men with a healthy degree of tech savviness. Think again.

“People I know who have any significant crypto holdings are grownups,” Palmer notes. “Kids are buying NFTs, and are

goofing around in crypto for sure … but what you really need is the cash to speculate.

“You also need the ability to lose a little money, like you would in a casino,” he adds. “And you shouldn’t put a nickel into crypto that you can’t afford to throw in the garbage, because it is inherently extremely risky.”

Cryptocurrency seems to be especially appealing to iconoclasts across the political spectrum, from die-hard libertarians to hardcore sovereign citizens. In July 2021, Australian software engineer and Dogecoin co-creator Jackson Palmer — no relation to Shelly — called it “an inherently right-wing, hyper-capitalistic technology built primarily to amplify the wealth of its proponents through a combination of tax avoidance, diminished regulatory oversight and artificially enforced scarcity.”

So there’s that. The news surrounding cryptocurrencies has been particularly hectic of late. In March 2022, President Biden signed an executive order officially directing the federal government to examine the risks and rewards of cryptocurrencies — to include formulation of consumer and investor protections, and investigation of ways to regulate the staunchly independent industry itself.

In the same executive order, Biden also asked the agencies to assess the pros and cons of creating a central bank digital currency — the digital version of the U.S. dollar. It would essentially be a government-issued, government-guaranteed fiat currency, and the Federal Reserve made news by saying the concept, “could fundamentally change the structure of the U.S. financial system.”

Heady stuff. Negative news also has come to light: In February 2022, the U.S. Department of Justice nailed down its biggest seizure of cryptocurrencies ever — some $3.6 billion worth of supposedly theft-proof Bitcoin that was stolen by hackers in 2016 from the British Virgin Islands-based cryptocurrency exchange Bitfinex. When stolen, that Bitcoin cache was worth “just” $71 million, according to CBS News, but by 2022, the price of the haul had skyrocketed to more than $3 billion.

The federal investigation resulted in the arrest of an interesting Manhattan couple: Russian and American dual citizen Ilya “Dutch” Lichtenstein, and American tech entrepreneur Heather Rhiannon Morgan, who also pops up on YouTube as the selfstyled rap artist Razzlekhan.

The two were not accused of actually hacking the billions of dollars’ worth of stolen Bitcoin, but were caught attempting to launder it in thousands of small transfers. The ludicrous smoking gun? A $500 Walmart gift card that had been linked to an email address registered in Russia.

“There are so many ways to launder money that are so much more secretive,” Palmer elaborates. “Bitcoin is always hiding in plain sight [on the blockchain]. Contrast that with a numbered Swiss bank account — where no one knows anything or will ever talk. And contrast that with truckloads full of $100 bills in duffel bags that are being used by drug lords, which you will never trace. Ever.”

Although proponents often cite privacy and security as a strength, Palmer calls crypto, “the most hackable thing on Earth.”

“People get socially engineered out of this all the time,” he says. “What’s in your digital crypto wallet is not your money … (but is instead) the private keys used to generate a transaction.

“So if your private keys are stolen — or you’re stupid enough to give them to someone because you think they’re going to be able to help you with it in some way — that’s the end of your crypto fortune, or your NFT fortune. It’s done.”

If all that hasn’t waved you off investing in cryptocurrency, discovering whether a venture into that wilderness is appropriate for your goals will involve: 1.) lots of research, and 2.) working closely with a licensed financial advisor who has plenty of experience in this growing, ever-changing market.

For those wanting to dip their toe into that market, simply buying into a well-balanced investment portfolio could be an option. A variety of stocks in mutual funds have exposure to crypto assets through a standard brokerage account.

However … As with any gambling opportunity — be it craps or cryptocurrency — knowing how to play the game is the key to potential success. And that doesn’t include watching scads of YouTube videos that promise to teach you “All You Need to Know” about the topic, or getting amped up by celebrity-studded crypto TV commercials (Matt Damon, we’re looking at you).

“Just because a celebrity is associated with something is no guarantee that it is not a scam, or that is in any way safe,” Palmer emphasizes. “There isn’t a celebrity in the world who knows how to do this on their own — not one.

“This is not a place you want to play if you don’t do an awful lot of personal homework,” he says. “Not ‘research’ — literally homework. You’ve got to dig in.”

Some learning opportunities can be found in the educational sections of legitimate cryptocurrency exchanges like the Ethereum Foundation, Coinbase, Binance, FTX or Crypto.com. A wealth of information also can be found on Palmer’s website (ShellyPalmer. com) where you also can purchase his best-selling book Blockchain — Cryptocurrency, NFTs & Smart Contracts: An Executive Guide to the World of Decentralized Finance.

Another site where one can learn about cryptocurrency at no charge is Metacademy.xyz. One of the most exciting things about that particular online learning environment is that it is risk-free, as students learn how to mint an NFT, and conduct other transactions by practicing with test currency, not actual crypto holdings.

“If you approach it with an open mind and you approach it experimentally, then you will probably do brilliantly well for yourself,” Palmer concludes. “Not only will you learn about what’s happening, and maybe make a little money — but more importantly, you’ll learn what business is going to evolve into in the next 10 to 15 years.

“On the other hand, if you approach this with a get-rich-quick mentality, like getting a hot tip on a stock, you are guaranteed to lose your shirt.

“They are waiting for you.”