Important: this position should not be considered as an investment council. The author focuses on the best coins in terms of actual use and acceptance, not in terms of finance or investment.
In 2017, cryptographic markets set a new standard for simple profits. Almost every piece or chip brought incredible returns. “The tide is throwing all the boats,” as they say, and the end of 2017 was a flood. Rising prices have created a cycle of positive feedback that is attracting more and more capital to Crypto. Unfortunately, but inevitably, this jumping market leads to massive investment. Money was thrown indiscriminately into a variety of dubious projects, many of which would not bear fruit.
In today’s 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 oratorios are no longer enough. Well, the main reasons to buy or keep a coin again are paramount.
Fundamental factors in cryptocurrency valuation
There are some factors that tend to beat the hype and prices, at least in the long run:
Angle of acceptance
While cryptocurrency or ICO business plan technology may seem weird without users, it’s just dead projects. It is often forgotten that widespread recognition is an essential feature of money. In fact, it is estimated that more than 90% of the value of bitcoin is a function of the number of users.
While the adoption of Fiat is entrusted to the state, the adoption of cryptography is purely voluntary. Many factors play into the decision to accept a coin, but perhaps most important is the likelihood that others will accept the coin.
Decentralization is very important for the real cryptocurrency model I push. Without decentralization, we are a little closer to the Ponzi scheme than to real cryptocurrency. Trust in individuals or institutions is a problem that cryptocurrency is trying to solve.
If dismantling a coin or central controller can change the transaction record, it calls into question its basic security. The same goes for items with unverified code that have not been thoroughly tested over the years. The more you can count on the code to work as described, regardless of human influence, the greater the security of the coin.
Real coins seek to improve their technology, but not at the expense of security. True technological progress is rare because it requires a lot of experience as well as wisdom. While there are always fresh ideas that you can come up with if it raises vulnerabilities or criticisms of the original purpose of the coin, you miss the point.
Innovation can be a difficult factor to evaluate, especially for non-technical users. However, if the currency code is stagnant or does not receive updates regarding important issues, it may be a sign that developers are weak about ideas or motivations.
It is easier for the average person to understand the economic incentives inherent in the currency. If the coin had a large pre-mine or ICO (initial offer), the team kept a significant share of chips, it is clear that the main motivation – profit. By buying what the team offers, you play your game and enrich it. Be sure to provide tangible and reliable value in return.
5 cryptocurrencies that can be bought in 2018
There has never been a better time to reevaluate and balance a cryptographic portfolio. Based on their solid foundation, here are five pieces that, in my opinion, should be followed or perhaps bought at their current depressed prices (which, I warn, may go lower).
№1. Bitcoin (due to its decentralization)
The first number belongs to Bitcoin (BTC), which remains the market leader in all categories. Bitcoin has the highest price, the widest assumption, most of the security (due to the phenomenal energy consumption in bitcoin mining), the most famous brand identity (forks tried to be appropriate) and most of the activity and rational development. It is also the only part to date that is represented in traditional markets in the form of Bitcoin futures trading on the American CME and CBOE.
Bitcoin remains the main engine; The performance of all other parts strongly correlates with the performance of Bitcoin. My personal expectation is that the gap between bitcoins and most, if not all other parts will increase.
Bitcoin has several promising innovations that will soon be installed as additional layers or softforks. Examples are the Flash (LN) system, the Schnorr Mimblewimbleund signature tree much more.
In particular, we plan to open a new range of applications for bitcoin, as it allows for large-scale microtransactions and instant and secure payments. LN is becoming more stable as users test their various capabilities with real bitcoins. As it becomes easier to use, it can be assumed that it will benefit greatly from the adoption of bitcoin.
№ 2. Litecoin (because of its sustainability)
Litecoin (LTC) is a clone of Bitcoin with a different hashing algorithm. Although Litecoin no longer has Bitcoin anonymity technology, strange reports have shown that the adoption of Litecoin in dark markets is now the second, only bitcoin. Although the currency that I have is much more suitable for the role of purchasing illegal goods and services, perhaps it is the result of the longevity of Litecoin: it was launched in late 2011.
Another factor in favor of Litecoin is that it integrates Bitcoin SegWit technology, which means Litecoin is ready for LN. Litecoin can benefit from the exchange of atomic chains. In other words, secure peer-to-peer currency trading without the involvement of third parties (i.e. exchanges). Because Litecoin keeps its code largely synced with Bitcoin, it has a good position to benefit from Bitcoin’s technological advances.
№3. Ethereum (due to reasonable contracts)
At the moment, Ethereum (ETH) has serious problems. First of all, governments are hacking ICOs, and rightly so: many of them have turned out to be either fraudsters or bankruptcies. Since most ico runs on the Ethereum network as an ERC 20 token, the ICO craze in recent years has brought Ethereum great value. If appropriate rules are adopted to protect investors, fraud with Ethereum projects may claim some legitimacy as a crowdfunding platform.
The second major challenge facing Ethereum is the delayed transition to a new hybrid performance and battery detection system. Currently, the GPU for Ethereum mining is profitable, but Bitmain has just announced Ethereum ASIC minor, which is likely to affect Miner’s GPU bottom lines. It remains to be seen whether this will change the prisoners of war and how successful these changes will be.
If Ethereum can survive these two major challenges – regulation and mining – it will demonstrate greater resilience. Otherwise, there are several competing currencies that track its shadows, such as Ethereum Classic (etc.), Cardano (ADA) and EOS.
№ 4. Monero (due to his anonymity)
Although its adoption in the dark markets is not all that could be expected, I (XMR) remains the Prime Minister’s confidentiality. Its reputation and market capitalization are still higher than those of its competitors – and for good reason.
The Monero code required less confidence that Zcash was a “loyal” key to the ceremony, and had a fair start, unlike Dash. The fact that Monero recently changed its Pow to win the development of a small ASIC for its algorithm confirms the commitment of part of the decentralization of mining. The significant drop in the hashrate is due to the new version, which is constantly reported against ASIC. It may also be an option for GPUs and even small processors to contact me. The new version of Monero, 0.12, also includes other improvements that show that Monero continues to grow along sensitive lines.
№ 5. iPRONTO (decentralized incubation platform)
iPRONTO is a network of Ethereum incubation platforms dedicated to investors looking for a safe and reliable platform to invest in new ideas and future innovators who can present their ideas and receive opinions from users, experts in the practice and implementation of derived ideas.
The ideas of the innovators are supported as the NES in Smart Contract format will be signed between the expert platform and the customer upon receipt of the client’s business idea by the Committee for examination and registration on the platform. The idea will not be published for all users on the public platform of the network, but only for selected members of the target community who are willing to sign a smart contract to maintain the confidentiality of the idea.