So, I'm planning to take a small amount of my investible assets and "invest" / gamble into cryptocurrencies. Since it's such a long word, I'm just gonna abbreviate with CC.
Fact 1: The market cap of all CCs is about a whooping $71B now, and it is rapidly growing.
Jan 15: $5.5b
Jan 16: $7.1b
Jan 17: $18.2b
Fact 2: BTC used to dominate the market with over 90% market share until 2016, hovering around 80% through 2016, but since 2017 it has dropped to under 50% of market share.
Fact 3: Many companies (Wordpress, Overstock, Microsoft, Expedia, Newegg, Dell, Steam, Zynga, Mint... ) are accepting digital currencies as payment (mainly BTC now, but many more CCs are riding the wave and offer advantages over BTC as a payment method)
Conclusion 1 based on Fact 1: Crytocurrencies will continue to grow. I have multiple reasons that could explain this. Weak fiat currencies run by weak governments is one. Weak banking infrastructure and expensive methods of payments and transfer is another. Lastly, capital controls (permission of transactions) and privacy of transactions is pushing people to find alternatives that solve those problems.
Conclusion 2 based on Fact 2: BTC's dominance as THE king of CCs is being challenged by many other CCs, arguably with much better technology, and only lacking the network effect and adoption. Feature to feature, usability to usability, benefits to benefits, BTC is a weak CC with limited uses and many who are knowledgable about CCs acknowledge this fact.
Conclusion 3 based on Fact 3 + 1: CCs being accepted as a form of payment by companies is going to spur the adoption of CCs by more people since it is no longer just some geeky shit, but it is actually usable.
Final Conclusion based on Conclusions 1 + 2 + 3: Crytocurrencies will continue to grow for 2 reasons - users willingness to shift from traditional fiat currencies to an alternative system that address the issues they face AND the accepting network of businesses that are willing to accept these currencies as payment (Note: countries with good currencies and financial infrastructures will have their citizens adopt CCs last because they are not particularly lacking a stable currency or fundamental features of banking). BTC will lose its dominance as the main CC due to its inherent limitations. Less popular digital currencies that can overcome BTC problems and can achieve critical mass will become the new standard for the next (mini-)era of CCs.
Research the most promising cryptocurrencies, with particular attention paid to (1) Primary usage, (2) issues of BTC that it solves and (3) limitations and severity of those limitations.
Narrow down the list to a few currencies, then buy them!
Please feel free to comment below or email me if you want to discuss cryptocurrencies!
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