Oh, the cryptos. It’s more than just Bitcoin.
Everyone is speculating about how high the coins can go, and throwing money at them. I’ve dedicated this blog to explaining some of the larger altcoins, their facts and figures, and what is special about them.
Before I begin the analysis, I just want to remind people that the altcoin technology is going through a lot of adjustments. Binance is currently (1/8/2018) not accepting new users. Coinbase has had an absolute plethora of issues.
If you want to invest, you better set at least 5 days aside to open up all the accounts and the required time for transfers. You’ll have a couple of different online wallets. Many different accounts.
The (Very Basic) Steps
- Open a Coinbase Account
- Put money in it (takes ~7 days)
- Transfer money to Binance or another altcoin platform
- Wait for that money to get into the account(~2 days)
- Buy Altcoins
It’s all incredibly non-intuitive, at this point.
Before you make any investment decision, it is important to do your research. Do not buy into something because your best friend’s grandma thinks it will take off, unless you agree with her based on analysis. Make sure you support what you buy into, understand the value of the platform, and take on calculated risk.
So below, I’ve provided analysis of 6 different coins (there are 1,387 altcoins in total) their platforms, and the risk they carry.
I’ve selected the coins based on their price and market cap. I’ve also picked ones that I think have application in the real world, and have some evidence of success.
To be noted, this is January 2018. Unfortunately, these numbers and interpretations might be radically different by February.
I’ve set up the introduction to each coin as follows:
(Market Cap Listing) Coin Name: Blockchain Name; Price, Market Cap
Bitcoin, Ether, and Litecoin were discussed in an earlier article that can be found here.
(#3) XRP: Ripple; $1.8, $97.87B
Image via Coin Checkup
Oh, Ripple. One the more talked about coins, that has fallen 10% over the past day.
These swings are normal for cryptos. 10% is actually pretty small.
Ripple is meant to be used for global payments, which is brilliant. Gone are the problems of currency translation etc. The banks don’t have to use nostro accounts, which reduces all sorts of expenses. The transaction fee they charge is $0.116, which is substantially lower than a lot of financial institutions.
One of the good things about Ripple is that it’s been around for a while, giving it market experience. It became mainstream news the other day, after speculation of a deal with Western Union (making that the 4th major global transfer company they have a partnership with), which caused a 20% surge in XRP (and the subsequent decline based on a variety of factors)
The co-founder, Chris Larsen owns a sparkling 5.19 billion of XRP tokens, which is valued at a cool $14 billion, tying him with Steve Ballmer, the current owner of the LA Clippers, and Ray Dalio, a hedge fund manager in terms of net worth.
But the issue, as pointed out by Markets Insider is the liquidity of his net worth, and the liquidity of cryptos in general.
What good is $14 billion if you can’t ever use it?
Ripple as a company is also far more concentrated than their crypto counterparts, owning 61.3 billion tokens, with 55 billion in escrow to combat uncertainty about supply. Approximately 38.7 billion tokens have been distributed.
(#5) ADA: Cardano; $0.908, $23.88B
Image via Coin Market Cap
This is Cardano. This is my favorite coin, because it uses the basis of scientific philosophy to build the blockchain. The team is entirely built of engineers and researchers. They broke down what made the other cryptos successful and then applied that using a Proof of Stake (Ouroboros) algorithm
There is a multiple layer protocol to the coin, composed of a settlement later and and a control layer. The settlement layer is a unit of account (holding the investment) and the control layer is the “police” for the account, protecting your identity, among other things. They also utilize Daedalus for the wallet, which is further protection.
They plan to upgrade the system as necessary through soft forks, allowing for quick evolution. This is a sharp contrast to both BTC and Ether, as both coins are and were simply unprepared for system upgrades. The lack of communication across both communities resulted in Bitcoin Cash and Ether Classic, respectively.
The best thing about ADA is that it is prepared for the large scale. It is also prepared for potential regulation (BTC was meant to be completely anonymous aka not open to regulation), which is important.
(#6) XEM: NEM; $1.65, $14B
Image via Coin Market Cap
NEM is a coin I personally don’t have a lot of experience with, but it sits at #6 in terms of market cap. They use an API interface, which makes it easier for businesses to blend into current technology, as well as a privatized blockchain for security purposes.
They have a Proof of Importance algorithm which rewards based on vested coins, and the number and size of transactions. Rather than Proof of Stake like (incentivizes coin hoarding, Ethereum) or Proof of Work (unfair advantage to those with more computing power, Bitcoin). Proof of Importance rewards based on larger and frequent transactions, which is more scalable and more efficient.
What is interesting about the coin is that they use something called the Smart Asset Blockchain, which allows you to build whatever you might need: “fintech, tracking logistics, an ICO, document notarization, decentralized authentication, etc.”, according to Nem’s site.
Image via Nem.io
RESTful JSON is the API server that basically allows smooth transition of the blockchain into the business environment, in any coding language.
(#8) XLM: Stellar; $0.65, $11.64B
Image via Coin Market Cap
Stellar is yet another payment system, that uses a network of servers to validate transactions. Lumen is the token.
What is notable about stellar is it’s distribution program of its 100B tokens:
- 50% for the world via the direct signup educational program (50B)
- 20% for nonprofits to reach underserved populations (20B)
- 20% for BTC program (20B)
- 10% for operational costs (10B)
The entire thesis of Stellar is to be a not-for-profit. They hope to “expand access to low-cost financial services to fight poverty and maximize individual potential.” according to the company website. The goal is to provide monetary stability in low income areas, as well as liquidity.
Notably, they have a partnership with IBM. They use Lumen for their payment transfers. Once this is fully scaled, it could completely change the global payment system especially in developing nations.
(#9) MIOTA: Iota; $3.89, $10.82B
Image Via Coin MarketCap
This is another coin I like a lot, for the application purposes. The Internet of Things is something that is endlessly fascinating to me, and IOTA is a direct application in that area.
They utilize the Tangle ledger, which is revolution in itself. It is actually blockless, a large contrast to the blockchain for other coins. There is also no need for consensus or outside verification in terms of mining, which leads to the zero fees.
Getting into the semantics of the approval process is beyond the scope of this blog, but it’s quite interesting. Read their white paper here.
Image via Iota.org
Iota surrounds 6 key platforms
- Micro-Transactions: Lessening of fees
- Data Transfer: Fully authenticated and tamper-proof
- Voting: e-Governance – no more voting booths
- Masked Messaging: Encrypted messages that can be shared anywhere in the world
- Everything as a Service: Anything with a chip (bike, car, applicances) can be leased in real time (I love this idea, as so many objects are idle)
- Anything that Needs a Scalable Ledger: basically, the application is infinite
(#10) TRX: Tron; $0.15, $10.07B [SCAM]
Image via Coin Market Cap
Tron is interesting because it focuses on entertainment, with hopes to reduce the middlemen, such as Google, Apple, and Facebook.
They basically want to create a blockchain version of the internet in which “all entertainment-based information is free and freely available to everyone”, according to their website.
I love this quote from their website: “TRON’s team members are followers of Sir Tim Berners-Lee (creator of the Internet) who are convinced that protocol, from the moment of its invention, is an asset for human beings, rather than a profit-making tool for small groups.”
Basically, they support the decentralized infrastructure, with the goal of data liberation and content enabling.
This is one of the most interesting coin application I have read. See the white paper here.
Update 1/10/2018: I am so glad I included this coin on here. Ross B. brought it to my attention that Tron was essentially a SCAM- they plagiarized their white paper. They had me fooled, and have fooled many people. This is what I mean when I encourage people to do their research. The power of investing is EVIDENT in this coin. Pure investing has fueled the crypto world.
(#35) STEEM; $6.01, $1.49B
Image via Coin Market Cap
This coin is smaller in terms of market capitalization that I originally intended to write about. But I think their Proof of Brain concept is interesting, rewarding “people to create and curate content” according to company website. This is a great contrast to Proof of Work, as it rewards based on value added to the network, rather than raw computing power.
It’s a blogging platform (you already know I’m all about that) that distributes tokens to creators based on community votes.
So basically, it’s kind of like a little venture capital group. They incentivize good media by rewarding it, further encouraging that content to be published.
What’s nice about this coin is that it’s less “techie” than the others, and more applicable to the individual’s day to day life. They don’t broadcast themselves as a token, per say, but rather as a community entertainment, which makes it more social and applicable.
Read their bluepaper here.
|Coin Name||CMGR||Max Daily Growth||Max Drawdown||Purpose|
|XRP: Ripple||136.79%||84.09%||(39.97%)||Bank transactions|
|ADA: Cardano||253.95%||198.51%||(27.79%)||Layered blockchain|
|XEM: NEM||101.94%||63.13%||(32.31%)||Smart Assets|
|XLM: Stellar||220.51%||127.36%||(49.25%)||Financial services for underserved|
|MIOTA: Iota||108.14%||42.25%||(67.20%)||Blockless ledger|
|STEEM: Steem||79.41%||64.50%||(40.19%)||Value based contributions|
I could talk about all the coins listed in existence, but that would be one long blog post.
Also, coin interpretation is entirely personalized. What I might think is absolutely brilliant, someone else might think is completely ridiculous.
But the big idea is that these coins are moving, and moving quickly. They are increasing by quadruple digits on the year. But getting into them is not easy. I’ve had trouble getting verified, then getting my BTC address to work, and then getting enough capital into my Binance account.
Overall, it’s important to KNOW what your investing in. Do your research. GO to Coin Checkup. Join a Coin Talk GroupMe (we have one if anyone is interested).
Invest wisely, friends.
Disclaimer: These views are not investment advice, and should not be interpreted as such. These views are my own, and do not represent my employer. Trading has risk. Big risk. Make sure that you can balance your risk/reward, and trade small, and trade often.