Top 10 Crypto Currencies: As a Long Term Investment – Number 10-8
Important Disclaimer MUST READ : This list does not constitute investment advice, it is for illustrative purposes only, you should always do your own research and apply critical thinking considering all the facts when investing. Only risk what your are willing to lose. This informative list is written at one point in time. Facts can change at any given moment that could constitute the assumptions in this list void at any time in the future. Black swan moments can occur and investing in crypto currencies is still a very speculative endeavour. Crypto markets can experience large percentage swings either up or down at any given moment. Investing in any of these crypto currencies could result in singnificant loses or significant gains.
Investing in crypto currencies can mean being your own custodian of funds so it is your responsibility to secure these safely. You can also rely on third party custodians to hold your assets so due diligence and a full understanding of this risk needs to be considered.
Seek professional investment advice where possible and always ask your investment advisor whether he is personally invested in the products he is recommending. Ask your advisor for proof he is personally invested in the products he recommends and seek additional verfication when necessary. Ensure the advisor informs you if his own personal investments change from any moment in the future that differs from what he advised you of.
There is no Long term because “In the long run we are all dead” as said by John Maynard Keynes, but here we are assuming 1-2 years here and we all hope to be live longer than that.
The authour of this material is likely to be invested in any or all of the coins mentioned here but this can change at any given moment as the facts and assumptions change. This reflects a view at one point in time, when publishing was made. Things can change quickly in the crypto world so a good investment one minute can turn out to be a bad one the next. The author accepts no liability whatsoever for any personal investment made by anyone based on any view published here.
Basic Assumptions of this thesis: The internet will continue to exist in its current open form with free access to all which allows anyone to run their own software on their own computer that can freely connect to the internet and communicate with other users. Any change of this current form of free internet could severely damage access to sharing and transferring value of any of cryptographically secured coins. The whole thesis is completely dependent and relies on this free form of internet. Any change to this model on how access is permissioned could seriously harm any crypto coin community and the underlying value of the associated coins.
The coins on this list will also focus on those with more of limited supply as some other coins appear to be more infinetly inflationary, or opaque. Some coins and their associated technology could be great platforms solving real world problems, that could well explode in popularity, but it’s the attached value mechanism we are more interested in. The coin should be designed and established in it’s current code base to be more stable and relatively less inflationary. This allows the underlying functionality and technology of the platform to be the focus. Some great platforms can allow for inflating the attached crypto currency coin during periods of volatility which means the long term value proposition as an investment is inherently more risky. These type of platforms and attached coins will not necessarily be included as a focus in this series of articles.
Of course any investment success also depends on the entry price and exit price and theoretical gains are an illusion until you sell out or cash in. A prudent investment strategy always uses gains to diversify further a portfolio.
- Never invest what you can’t afford to lose.
- The amount you invest should very much depend on how much you will not need for the essential bare necessities of your life.
- It is possible to take more risks with a few 1,000 dollars than you can with a few million.
- Always have enough money to pay your expenses and fund your desired level of lifestyle.
- Don’t take on high interest debt to fund risky illiquid investments unless it makes absolute sense.
- Leverage can be a great way to increase potential returns but can also more likely lead to ruin and the piling up of more debt.
- Never forget debt is power and those that you owe will always be able to use that debt to their advantage.
- Be careful with complex financial products that entail contracts as invariably there will be small print you haven’t read that will mean really big gains can be reduced by the contracting party and they will always try to recoup big losses if things don’t go in your favour.
- Set clear investment objectives in terms of timeframe and desirable profits or acceptable loses and stick to them.
- Don’t deviate from your plan or strategy and remove emotion from any trading and investing.
- Don’t get emotionally attached to an investment and exit if things start going wrong especially if the original fundamentals that convinced you to invest change considerably.
For a full list of the potential upside in certain coins compared to the popularity and network of Bitcoin as a baseline, then please check out the Cryptindexes.com fundamental index.Top 10 Crypto Currencies: As a Long Term Investment
Potential Upside: 1000’s %
Justification: Best Name in Crypto with a growing African interest
Err what…. GoldCoin, what’s a GoldCoin I hear you cry? Yes I know its languishing somewhere in the lower half of the top 100 coins by market cap but bear with me.
This is quite simply one of the best name’s in crypto. When you say to someone outside the crypto community ‘Ethereum’, they look at you funny. They will think you have definitely been delving a bit too far into the dark web. If you say Bitcoin they say “oh yes, the criminals digital thingy” (even though cash is far less traceable). If you say “GoldCoin” their intrigue is instantly sparked. Then you cosider that GoldCoin claims to have a trademark over the GoldCoin name then it can be fairly easy to convince anyone to buy into the concept, initially at least. This is especially the case when you mention that there are 1000s of different bitcoin alternatives in existence. GoldCoin just sounds good and they are tryng to live up to their name.
Bitcoin and all of its friends are really no more than a decent store of value currently. Even the DAO debacle showed Ethereum is perhaps not yet ready for much else and needs more thought and consideraton. GoldCoin is essentially a Bitcoin Fork with faster block times with a built in 51% attack defence system. This works by spitting out orhapn blocks when network hash rate increses too fast, too quickly. The aim is to avoid the concentration of network power and thus, in theory, avoiding a 51% attack on the integrity of the chain. GoldCoin makes no pretence than trying to be nothing more than a store of value. In a crypto world full of complextity and untested code holding your value , having a coin that is a good store of value could be something worth investing in.
Bittrex listed GoldCoin for trading in 2016 which means this potentially great name will get more exposure and the ascendancy of this coin can continue to new highs. This additional listing has indeed boosted daily trading volumes significantly.
In truth when you roll down the list of 100s of coins on coincap.io there are many coins that have become defunct with little ongoing development. GoldCoin at least has a familiar sounding name amongst mostly worthless coins with smaller active communities. GoldCoin is a branding master class with a rising sub sahrahn following that could be its niche.
There is some momentum with GoldCoin in Africa with a GoldCoin club has been established. Therefore with all the talk of the under banked and need for crypto in developing nations this is where GoldCoin could find its place.
If Poloniex lists GoldCoin then initially there would be an exponential rise. This would at least increase its following for the longer term too, even if the price fell back again. With all the crappy boring names of coins on Poloniex, GoldCoin has a great chance of a listing that would additionally catch peoples attention.
GoldCoin has a small number of developers, only 1 in fact, but GoldCoins charismatic leader ‘MicorGuy’ is a successful entrepreneur in his own right and this appears to be one his main passions. GoldCoin has the wind in its sails but is very speculative.
Risks / Headwinds:
GoldCoin still has a relatively low daily trade volume and doesn’t have a thriving active community as yet. This means there is significant risk associated with holding it as an investment. However the community is growing and its listing on Bittrex shows this it is on an upward path (it was one of the best performing coins of 2016). It is also quite volatile so is definitely not for the faint hearted or for significant relative investment. Only invest what you can afford to lose and lock it up in a secure fashion and come back in a few years to see that hopefully you’re a millionaire. Another risk is the low overall hash rate and when miners did start to jump on this in 2016 there was an issue with the network spitting out orphan blocks. This basically means miners not getting rewarded for their efforts and electricity usage. This issue is part of protocols defence mechanism that is designed to prevent a 51% attack by ensuring the network hash rate grows slowly and can’t be built up too quickly by one potential bad actor. Certainly gargantuan risks with GoldCoin but potential enormous rewards.
9. NEM / XEM
Potential Upside: 100o’s %
Justification: Far East Smart Contract Coin with Japan as Focus
NEM, which stands for New Economy Movement, and its attached crypto currency called XEM, is a relatively new crypto currency platform. It was written entirely from scratch with new code and deploys a Proof of Intelligence consensus model. This so called ‘self declared’ Proof of Intelligence model is similar to proof of stake with a reputation based reward model but also incorporates how active each participant in the network is in order to calculate reward ( eg transaction count and to who etc).
NEM, with XEM, is essentially a smart contract crypto currency platform that approaches the problem and solution in a more novel way. Without getting too technical, it tries to make it easier to deploy secure smart contracts in an elegant way as opposed to Ethereum’s World Computer. The Ethereum platform wants to do everything whereas XEM aims to be smarter with its smart contracts. This in theory could make smart contracts easier to deploy for an average less technical user. This is assuming they can actually deliver all the secure functionality with an easier to deploy template. The argument for this is that at the heart of most smart contracts is the same functionality, so a smart contract template model could be quicker and more open to everyone.
NEM / XEM’s key value offering is that it has a focus on the Far East and especially Japan. This accessibility in Japan and China is key to a successful growth in adoption for any currency as just the sheer number of potential users in this region is a game changer. Therefore once Crypto Currency becomes more mainstream this could be a serious offering that could be a simple and easy way to transfer value, make payments and deploy straightforward smart contracts for the billions in the far east, at least. Something has to usurp Bitcoin as an instant payment system accepted by retailers at the point of sale and these guys have a great opportunity to be that platform in China and/or Japan.
They also have a fully tested IOS app ready and, providing they get approval from Apple, its release could further accelerate adoption. This would just open up the platform to more users and more crypto fan boys who would then buy more currency resulting in price appreciation. The app is awaiting Apples approval, and providing it is given the green light then this would be a big thumbs up to the platform from the technology behemoth.
Risks / Headwinds:
Xem currency had a momentous time in 2016 with an incredible price appreciation and subsequent correction. Despite this pullback, overall it still shows an enormous rise for the previous year but clearly expectations overreached themselves. It certainly seems like the focus of this coin and platform appears to be on private blockchains, which is separate from the public chain and currency XEM. So despite the developers publicly declaring they are trying to marry the public and private chains together so they work in harmony, there is clearly a deviation from the public currency. This means that if they win a big Japanese bank mandate to focus on private chains, the public network and XEM could suffer from neglect.
The other downside for NEM and XEM is that the platform does seem rather complex. It is not too user friendly to set up and maintain and of course there are very few use cases or places to spend your coins. So this is purely speculative at the moment but with great potential if it can get the Asian network affect and the combination of public and private chains in the future.
Potential Upside: 1000’s %
Justification: Number 1 Chinese Focused Coin
Another obscure choice is YBCoin, short for Yuan Bao coin, which is a Chinese focused coin. This means it can be difficult to navigate through the website particulars if you are not Chinese. It was established in November 2013 and as of speaking it is the top Chinese dedicated coin that hovers around the top 30 Coins by market cap according to CoinCap.io. Yuanbao is a traditional Chinese system of measuring gold and silver and it symbolizes great fortune and prosperity. The Chinese focus and dedication is the main reason why it sits on this list. The sheer size of Crypto Currency interest in China is enormous and the population is such a giant potential market. Crucially it has limited supply with approximately 3 million total coins in issuance with a set annual inflation rate of just 1%.
The original release of YBCoin was based on the PeerShares source code which was a very interesting project in itself and one of the first to implement a proof of stake consensus algorithm. Despite Peercoin still being in the top 30 of Crypto currencies by Market Cap, it has lost a lot of developer support and the community seems to be dying out somewhat. However the codebase has proven relatively stable and is established which means YBcoin has a good basis to promote itself to the formidable Chinese market. The YBCoin development team seems to have really brought YBCOIN on since its original release. It still uses a Proof of Stake/Proof of work hybrid model mixed with a Virtual proof of work mechanism for its consensus algorithm. This is said to effectively control inflation rates and prevent loss of capital, therefore stabilising the system.
2016 has indeed been a great year for YBcoin with a substantial rise in price. Therefore providing the conditions are correct and the underlying code can hold up to greater scrutiny then this could truly be an explosive coin going forward.
Risks / Headwinds:
With YBCoin’s Proof of Stake model not yet fully tested at scale, in comparison against Bitcoin’s PoW, any significant rise in price of YBCoin will only bring out the finest Chinese hackers to test its security. With proof of stake being a variation of proof of work, but where the stake is the incumbent coin or asset itself, it could leave this type of coin open to manipulation. This can be exploited if an attacker is determined enough and the potential reward for doing so was enough of a motivator. However, as the development community for this coin is seemingly strong then, any shocks to the system could be resolved and updated with more ease than others. The other major thereat to YBCoin’s ultimate popularity in its home market is of course Bitcoin. Bitcoin is still by an enormous margin number 1 in China and with China being YBCoin’a biggest potential factor in a substantial rise in value then this is a large factor to consider. There is however room for more than one currency in each market and with bitcoin’s biggest weakness being point of sale usage there is a big opportunity for alternative crypto coins. If Bitcoin itself ,or any developed side chain, fails to implement a scaling solution for transaction volume there will be a replacement or solution for this in each market. The proof of stake model could always move to a point where the stake is actually something of external value to the network, such as Bitcoin, and then this could really be a big coin.