Important: This post should not be considered investment advice. The author focuses on the best coins from an actual usage and adoption perspective, not from a financial or investment perspective.
In 2017, the crypto markets set a new standard for simple profits. Almost every part or chip produced an incredible return. “A rising tide floats all boats” as they say, and the end of 2017 was a flood. The rise in prices has created a positive feedback loop that attracts more and more capital to Crypto. Unfortunately, but inevitably, this fast-moving market leads to huge investments. Money is thrown indiscriminately into all kinds of dubious projects, many of which do not bear fruit.
In the current bearish environment, hype and greed are being replaced by critical appraisal and prudence. Especially for those who have lost money, marketing promises, endless shillings and charismatic speeches are no longer enough. Well, the main reasons to buy or hold a coin are once again paramount.
Fundamental Factors of Cryptocurrency Valuation-
There are a few factors that tend to trump hype and price growth, at least in the long run:
Although cryptocurrency technology or an ICO business plan may seem amazing without users, they are just dead projects. It is often forgotten that widespread acceptance is an important feature of money. In fact, it is estimated that more than 90% of Bitcoin’s value depends on the number of users.
While the adoption of fiat is mandated by the state, the adoption of cryptography is purely voluntary. Many factors go into the decision to accept a coin, but perhaps the most important consideration is the likelihood that others will accept the coin.
Decentralization is essential to the I push model for true cryptocurrency. Without decentralization, we are a bit closer to a Ponzi scheme than a true cryptocurrency. The problem that cryptocurrency tries to solve is trust in people or institutions.
If the dismantling of a coin or a central controller can change the transaction record, it calls into question its basic security. The same goes for parts with untested code that haven’t been thoroughly tested for years. The more you can count on the code to work as described, regardless of human influence, the more secure the coin.
Real coins strive to improve their technology, but not at the expense of security. True technological progress is rare because it requires a lot of knowledge as well as wisdom. While there are always fresh ideas to screw up, if it creates vulnerabilities or criticisms of the coin’s original purpose, it doesn’t make sense.
Innovation can be a difficult factor to assess, especially for non-technical users. However, if the currency code has stagnated or is not receiving updates related to important issues, it can be a sign that the developers are lacking ideas or motivation.
The economic incentives inherent in currency are easier for the average person to understand. If a coin has had a large pre-mining or ICO (initial part offering), the team owns a significant share of the chips, then it is quite obvious that the main motivation is profit. By buying what the team has to offer, you play your game and enrich it. Remember to provide tangible and reliable value in return.
5 cryptocurrencies to buy in 2018
There has never been a better time to reevaluate and rebalance your crypto portfolio. Based on their solid foundation, here are five pieces that I think are worth sticking with, or perhaps buying at their current depressed prices (which, just a warning, could go lower).
#1. Bitcoin (because of its decentralization)
Number one belongs to Bitcoin (BTC), which remains the market leader in all categories. Bitcoin has the highest price, the widest speculation, the most security (due to the phenomenal energy consumption of Bitcoin mining), the most recognizable brand identity (forks have tried to match) and the most development in an active and rational manner. It is also the only part to date that is represented in traditional markets in the form of Bitcoin futures traded on the US CME and CBOE.
Bitcoin remains the main engine; The performance of all other parts is highly correlated with the performance of Bitcoin. I personally expect the gap between Bitcoin and most if not all other parts to widen.
Bitcoin has several promising innovations in the pipeline that will soon be installed as additional layers or soft forks. Examples are the Flash (LN) system, wood, Schnorr Mimblewimbleund signatures, and more.
In particular, we plan to open up a new range of applications for Bitcoin as it enables large-scale microtransactions and instant and secure payouts. LN is becoming more stable as users try out its various features with real bitcoins. As it becomes easier to use, it can be assumed that the adoption of Bitcoin will bring great benefits.
#2. Litecoin (because of its persistence)
Litecoin (LTC) is a Bitcoin clone with a different hashing algorithm. Although Litecoin no longer has Bitcoin’s anonymity technology, surprising reports have revealed that Litecoin’s dark market adoption is now second only to Bitcoin. Although the currency I have is much more suited to the role of purchasing illegal goods and services, perhaps this is a result of Litecoin’s longevity: it was launched in late 2011.
Another factor in Litecoin’s favor is that it integrates Bitcoin’s SegWit technology, which means that Litecoin is ready for LN. Litecoin can benefit from the exchange of atomic chains. In other words, secure peer-to-peer trading of currencies without the involvement of third parties (such as exchanges). Because Litecoin keeps its code largely in sync with Bitcoin, it can benefit from Bitcoin’s technological progress.
#3. Ethereum (because of smart contracts)
Ethereum (ETH) is in serious trouble at the moment. First of all, governments crack down on ICOs, and rightly so: many have turned out to be either scams or bankrupt. Since most icos run on the Ethereum network as an ERC 20 token, the ICO mania has benefited Ethereum greatly in recent years. If proper regulations are put in place to protect investors, Ethereum project scams can claim some legitimacy as a fundraising platform.
The second major problem that Ethereum faces is the delay in the transition to the new hybrid work and battery detection system. GPU mining Ethereum is currently profitable, but Bitmain has just announced a mining ASIC for Ethereum that will likely affect the bottom lines of GPU miners. It remains to be seen whether this will change for POWs and how successful those changes will be.
If Ethereum can survive these two major challenges – regulation and mining – it will demonstrate great resilience. Otherwise, there are several competing currencies that follow its shadow, such as Ethereum Classic (etc.), Cardano (ADA), and EOS.
#4. Monero (because of its anonymity)
While its adoption in the dark markets is not all that one might have hoped for, I (XMR) remain a private PM. Its reputation and market capitalization are still higher than those of its competitors – and for good reason.
Monero’s code requires less confidence that Zcash is a “loyal” keying ceremony and had a fair start, unlike Dash. The fact that Monero recently changed its Pow to defeat the development of a small ASIC for its algorithm proves its commitment to the decentralization part of mining. The significant drop in hashing speed is due to the new version being constantly reported against the ASIC. This could also be an opportunity for GPUs and even smaller processors to reach out to me. The new version of Monero, 0.12, also includes other improvements that show that Monero continues to develop along tangible lines.
#5. iPRONTO (decentralized incubation platform)
iPRONTO is a network of Ethereum incubation platforms dedicated to investors who are looking for a safe and reliable platform to invest in new ideas and future innovators who can present their ideas and get feedback from users, experts in the field on the practice and implementation of derivative ideas.
Innovators’ ideas are supported as the NES in Smart Contract format will be signed between the expert platform and the client when the client’s business idea is submitted to the Committee for examination and registration on the platform. The idea will not be published to all users on the network’s public platform, but only to selected members of the target community who are willing to sign a smart contract to keep the idea private.