After years of being a collector’s item for programmers and computer geeks, Bitcoin recently gained the attention of the masses, day traders and Wall Street. The rise in cryptocurrencies by 330% in 2017 raises the question of whether Bitcoin is an investment that could pay for itself quickly. Bitcoin has undoubtedly made some early investors wealthy, but the incredible interest in the cryptocurrency has far exceeded the market understanding of the underlying blockchain technology investing in cryptos.
This knowledge gap has created an opportunity to create hundreds of crypto currency tokens that seek to earn money with the greed and ignorance of investors. But that does not mean that they should all be avoided. If you’re serious about the technology and ready to do your homework, then you should include one or more of these five cryptocurrencies and tokens in your portfolio.
Ether, the currency of the Ethereum network, is the second most important cryptocurrency with a total value of approximately $ 28 billion. The cryptocurrency began the year at $ 8 and has since risen to almost $ 300. Ether is sometimes falsely called Ethereum. The long-term value of this currency lies in the ethereum network and the blockchain.
What is the blockchain? Think of it as a new form of the Internet. You do not have to know how it works to use it, but it’s essentially a decentralized database without a single gatekeeper. This means that all information in this new Internet is verifiable from anywhere.
Part of the value of the Ethereum Blockchain is that they execute Smart Contracts – that is, agreements that are completed by the software code when completing certain tasks – between any combination of machines and people. With the upcoming release of Metropolis, the platform is getting closer to its true potential as it makes it easier to create and run these so-called smart contracts for individuals and businesses.
What is that supposed to help? With smart contracts and well-designed blockchain protocols, there are no middleman fees for each transaction step, and there is no time lag. The transfer of values, be it for utility bills or payroll, would be instantaneous and effortless. You could literally be paid by the hour. If the world ever moves to a truly digital economy, it will need digital currencies that share many of the features of the Ethereum ecosystem.
Ether is, in my opinion, the best cryptocurrency available for a long-term investment.
Perhaps the greatest value of the Ethereum network is that it supports an ecosystem of distributed applications or DAPPS. If Ethereum is a new internet then DAPPS is the single web page. Although Ethereum uses its own currency (ether), each DAPP can also have its own currency in the form of a token.
When tokens (similar to a company’s stock) are publicly offered for the first time, they are referred to as an initial coin offering or an ICO. Companies have risen over $ 2.3 billion through ICOs this year, and since not all are trustworthy or credible, many have criticized the ICO delusion as a bubble. That’s not entirely wrong, but ICOs are a new way for companies and startups to raise capital, and not all are scams.
A good example of this is fintech startup Omise. OmiseGO Blockchain technology is used to establish digital wallets, enabling real-time payments, low-transaction peer-to-peer payments, and immediate settlement. Think only of Venmo or Paypal, but without the delay in money transfers and in the form of a decentralized Umschlagplatzes.
The OmiseGO tokens have a total value of just under $ 1 billion. Investors who own a token will receive some of the transaction fees (similar to a stock dividend) from the company’s digital wallet when they become available in the fourth quarter of this year.
The digital purses are supported by the state and regulated much like banks. At the same time, they are currency-neutral (ie they will handle transactions and transfers in US dollars, ethers, Bitcoin and other popular forms of investment). This will allow any currency to succeed on its own. This will protect OmiseGO from volatility in the long term and can support the cryptocurrency no matter which other cryptocurrency is popular.
The founders of Qtum (the company and tokens share the name) focus on business customers. By combining some of the best aspects of Bitcoin and Ethereum blockchains, they have made Qtum a tool that enables companies to design and deliver smart contracts to automate supply chain management and business-to-business transactions create.
The goal is to create a platform for Smart Contracts including secure and tested templates tailored to specific industries and applications. In addition, one would like to develop the technology to enable the translation of smart contracts into a language that people can read and understand.
Qtum has invested heavily in mobile compatibility and usability, which could allow broad adoption by many companies (particularly in emerging markets) interested in decentralized operations. The tokens currently have a market capitalization of $ 580 million, although the Qtum network has only been available since September 13.
Rialto ai (XRL)
The incredible attention paid by crypto currencies in 2017 and the resulting increase in their usage have led to frequent delays in transactions. Crypto-exchanges are much less efficient and liquid than z. B. Exchanges where transactions can be executed in milliseconds.
Rialto tries to solve this problem by providing algorithms that exploit these deficits. Think of it as a cryptocurrency arbitrage network. If stock exchanges struggle to meet demand or convert between different currencies, Rialto.ai will intervene to provide liquidity from its trading portfolio. This shortens transaction times, ensures that open orders are fulfilled instantly, and improves the overall efficiency of any developer-approved cryptocurrency exchange.
In addition to market liquidity, Rialto.ai will conduct trading to capitalize on market inefficiencies, behaving similarly to Wall Street Robo traders. Each time, the network will collect tiny transaction fees and distribute them to the token holders twice a year. That could really add up to a Rialto. In addition, the algorithms have knowledge of important transactions in real time. It would be the same as knowing what Warren Buffett thinks when he buys a company and not having to wait for quarterly submission to the SEC.
However, the Rialto tokens may not be (yet) legal because they might violate the rules of the SEC at the moment. If that changes, then these tokens could be a fascinating way to diversify your crypto holdings.
Not every cryptocurrency is also a software tool. Some serve only as traditional assets. That’s the idea behind PembiCoin of startup Pembient, even if this asset is anything but traditional.
It sounds wild (and it does), but Pembient is developing a technology platform that will hopefully produce laboratory-scale rhino products in the lab through a combination of genetic engineering and 3D printing. The idea is that this technology will more than satisfy market demand for rhino technology products. If the company can achieve its goal of producing genetically and chemically identical products from the rhino and producing them in mass production, then the price of such products could be reduced worldwide. At the same time poachers would be displaced from the market. (Of course it’s more complicated and controversial.)
Pembient will need a few more years to optimize its technology platform and has therefore created PembiCoin to measure interest in its future rhino horn product. Think of it as a commodity futures contract: For every PembiCoin token you buy today, you will receive 1 gram of the rhino product in November 2022. You can also sell PembiCoin in the meantime.
This crypto asset is risky because Pembient may not meet its goals. It is also controversial, as each token is offered for one tenth of the current price of rhinoceros products. Therefore, some argue that if the technology works, these tokens will become futures contracts for rhinoceros eradication. However, this suggests an often overlooked potential application of cryptocurrencies and crypto assets. It could be low-cost futures contracts. This reinforces the idea that we are just scratching the surface of the potential of blockchain technology.