Now that the crypto markets are beginning to recognize that there is a direct correlation between the circulating supply of a cryptocurrency and the price, investors are running to low circulated coins like candy. But the circulation should NEVER be the ONLY factor when investing in cryptocurrency. The most important, yet overlooked factor in crypto is technology.
For instance, Bitcoin was created as an alternative to fiat currency, and that’s the extent of its technology. There is no smart contract tech, integration into other blockchain applications or a working crypto business model (I.E. SALT, Basic Attention Token, etc). Moreover, Bitcoin’s wallet transfer speed is becoming inferior to many faster alt-coins, and Bitcoin’s over speculation & transfer fees make the initial use of the coin (fiat alternative) completely moot.
Value in this new realm of economics is pure technology. A simple example of this is the cryptocurrency FUNFAIR ($FUN). Aside from its cryptocurrency component, it integrates its currency into its decentralized “smart contract” online casino gaming blockchain. So users who wish to partake in online gambling with FunFair MUST use its currency to play. Hence, this creates anticipated value of the currency depending on the popularity of their gaming solutions. There are many coins using this model outside of this example.
Most of the investment community has failed to wake-up to the reality of crypto investing mentioned previous. Investors today are literally investing based on a friend/family recommendation or the ill informed business media (CNBC, Bloomberg, etc). As a result, the rise of trash-coins like TRON who literally have NOTHING but hype-value and an abstractly worded (and allegedly plagiarized) White Paper.
For those who truly want to profit in this game, you have think long term, have patience and do your homework. Do not listen to ANYONE who can’t explain in explicit detail WHY a cryptocurrency has value, don’t listen to message boards/chats and don’t listen to the mainstream business media. Doing so will only make you a bag-holder on a coin that will never reach the price you bought in at.
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One thought on “What’s the value in Cryptocurrency? It’s the Technology Stupid!”
Even if you don’t buy into the Crypto markets (I myself am still somewhat wary of them for various reasons.) there is no denying there’s money there. If not in investing, then in the technology needed to acquire them. Gold and other precious metals make computer parts. Now that crypto is taking off on a whole new rocket ride, the demand for processors and various other components for a mining rig is going up. When demand goes up, production will either rise to meet it, or artificial scarcity will hike the prices. The need for gold and precious metals to fabricate said parts will rise in kind, as will the prices.
I’d say now is the perfect time to invest in gold or tech stocks, and I say again, EVEN IF YOU DON’T BUY INTO CRYPTO.
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