What kind of Crypto to invest in?

So… just what are the different kinds of crypto-asset to support, what are its obstacles (regulatory/technical) and what kind of value does it hold/hodl? Here are some major types, although in reality there are combos or overlaps…

tree of crypto

[Link to full post on Steemit…]

Crypto-currencies

From the slower and more robust to the fresher and more speedy. Better for macro or macro+micro transactions? Possible privacy features for business use? Differing technical design eg. blockchain/DAG/mix. From the very decentralised (bitcoin) to the lesser (and more corruptible) ones. Processing fees? Irreversible payments? Stores of value? Examples: bitcoin, dash, litecoin….

Stablecoins

Volatility in crypto is a problem. Pegged to an existing ‘stable’ currency or asset like gold or fiat, the coin is backed to a pool of fiat, a pool of crypto, or it works with a special algorithm that adjusts to supply and demand. The idea is to provide a means to hedge against the volatility of other crypto, and act as a bridge between the two ‘worlds’. The problem is that no coin is yet fully trusted, decentralised or audited. They could well take over from ‘stores of value’ and be widely adopted in the daily world if they could. For now they remain very ambitious projects.

The ideal stable coin with robust stability mechanisms that can effectively deal with any price fluctuation and run on par with traditional fiat currencies, will undoubtedly signal the beginning of the end to hyperinflation, central government interference, fraud and mismanagement that most economies suffer from to some degree. [source]

Platform Tokens

The most growth potential? These play a part of the ‘fuel’ in blockchains that aim to become large, digital ecosystems with different governance models and technical designs for scalability: PoW, PoS, PoA, DAG etc.

Utility Tokens

The same as above but more focused towards one project or for use in just one app or ecosystem, to pay for some service or function. Eg. file storage sharing, social media etc.

Security Tokens

Created to cut out the middle-man, such as bonds or securities on decentralised exchanges etc. Commission-free.

Natural Asset Tokens

These can be used in the digital trading of the earth’s resources, eg. gold, but again without any middle-man, and much easier to trade. Are the exchanges actually up and running for these tokens to work?

Crypto-collectibles

These do not exist in the real world but as digital assets on a blockchain. Eg, game items. Their rarity can give them great value.

Crypto-fiat Currencies

Boo! Backed by central banks, these will be national currencies but empowered via blockchain. New tech, same old problems.

 

See also: Ade’s Press CoinViews for updates on coins.

[Aug 2018]

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