Investments on the fundamentals of cryptocurrency

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(Disclaimer: The author holds investments in ether, bitcoin, EOS and Bitcoin Cash.)

2018 has already been another stellar year for organizations raising funds for blockchain and cryptocurrency projects While initial coin offerings (ICO) seem to have raised more than $ 3.69 billion in 2017 l & # 39 total amount collected this year is already impressive $ 17.25 billion at the end of July, according to CoinSchedule.

If the current trend I have observed in crowdsourcing financing for technology companies continues, It will be important for investors to discern the nuances of investment in blockchain technologies and the virtual activities created on them, as ICO investors usually receive virtual goods in the form of coins or tokens in exchange for ether or bitcoins. you need to know about blockchain and commons.

Fundamentals Of Currency

To understand cryptocurrencies, investors should first remember the basic principles of currencies: they are typically units of measurement, deposits of value & nbsp; and medium of exchange . Virtual resources based on blockchain – like cryptographic tokens & nbsp; – often demonstrate these three characteristics of the currency. However, as an investor, I advise you to consider if and when these functions are just a byproduct of the goal inscribed by the creators in the asset code before investing in a cryptocurrency.

Ethereum & # 39; s Ether

Ether is a virtual resource on Ethereum. Also in the current bear market, one ether trades at about $ 292 & nbsp; as from this writing, according to CoinDesk. This puts the market capitalization of the Ethereum blockchain at $ 29.66 billion & nbsp; – which is not very far from the current valuation of the ETF of quoted on NASDAQ . The Ethereum virtual machine

that allows developers to write programs called "smart contracts," is executed if the user makes a payment in his native currency ether. These transaction costs on the Ethereum blockchain are consequently labeled as "gas." Like its real-world counterpart, gasoline, I believe this virtual gas must be valued by investors & nbsp; – not for its currency properties or its intrinsic value, but for the utility it satisfies in the Ethereum network. The more applications are created and used on the blockchain, the greater the likelihood that the demand ether is present.

EOS

EOS is the native virtual asset of the recently launched EIO blockchain. While providing functions similar to those of Ethereum, EOS.IO blockchain users are not required to pay transactions in the native blockchain resource, "EOS." Block.one, which raised a reported $ 4 billion to finance the launch and launch of EOS.IO, according to a report of July 2018 & nbsp; allocated approximately $ 700 million to grow EOS Ecosystem .IO. As with other cryptocurrencies, an advantage for investors is that EOS token holders can receive free tokens from projects funded by venture companies by supporting blockchain in what is referred to as & nbsp; an & nbsp; airdrop . I believe investors in Ethereum ether might also find it useful to keep at least a small number of EOS in their digital portfolios as an easy way to track applications launched on EOS.IO.

Tokens On The Ethereum Blockchain

Ethereum's blockchain provides an easy to navigate token generation interface, referred to as Token Standard [194590016]. & Nbsp; This standard ensures that all people who control electronic portfolios that comply with this standard can receive new tokens generated in this way. These tokens can also be easily listed in exchanges that support this Ethereum standard and most of the more than 200 virtual asset exchanges do.

Tokens created by software engineers on Ethereum's public blockchain are usually coded to fulfill a specific function, such as triggering an event, allowing access to or assignment of others rights. These tokens are not therefore created as a unit of measurement. "" Accordingly, I advise investors to evaluate these tokens on the basis of the overall validity of the system in which they are used, using investment criteria such as the state of the technology, the team's experience and the product market. Good starting points for finding an investor are the LinkedIn profiles of the team members (for qualifications) and the activities of the project's GitHub repository (to monitor progress). The positive signs are teams led by technologists and depositaries previously successful with the development of the code that dates back more than a year.

Bitcoin

The Bitcoin blockchain and its currency, & nbsp; bitcoin (the tiny "b" differentiates the currency from the blockchain and the concept), is identified by its original creators in their 2008 whitepaper on the currency & nbsp; electronic money & nbsp; (registration required). & nbsp; However, unlike the fiat currencies & nbsp; that are created continuously and according to necessity by the governments & nbsp; – the total supply of bitcoins is limited by the code to a total of 21 million making the bitcoins intrinsically poor. Although a number of major currencies accept bitcoin as a form of payment, most signals seem to suggest that bitcoin is purchased primarily for its "value" function. I therefore recommend that investors approach the purchases of bitcoins in the same way as they would approach the purchase of gold: as a hedge against their stocks or shares

Pure Cryptocurrencies

virtual resources have been created for the specific purpose of functioning exclusively as cryptocurrency. These cryptocurrencies include Zcash, Dash, Monero and Bitcoin Cash. Zcash publishes transactions on its public blockchain, but the currency privacy features allow users to hide the sender, recipient and the amount subject to transactions. Dash & nbsp; launched as "Darkcoin" & nbsp; also provides privacy features to users and uses an autonomous organizational structure called & nbsp; Decentralized autonomous organization .

The value of any currency is determined primarily by the strength of its monetary policies and inflationary tendencies. Investors seeking to add cryptocurrencies to their portfolio should familiarize themselves with the government blockchain models on which these assets are created and follow their specific use cases, which can generally be found in the white papers published by these projects. The mainstream adoption, as when the well-known & nbsp; traders accept currencies and when US exchanges such as Coinbase add them, it is also a positive signal for investors to watch while they build a portfolio of cryptocurrencies.

Conclusions

I believe that blockchains and their applications, such as cryptocurrencies, will probably play a central role in the future of any investment strategy. However, investing in these activities is not yet well understood. This is probably partly because of their nascent history and because of the contradictory management by US and foreign government agencies that seem to mistakenly confuse cryptocurrencies with other blockchain-based resources and functions. I advise investors to examine the individual merits of each blockchain project. They should use standard venture capital investment criteria such as the team or community that supports the technology, the size of market opportunities and the current state of product development, differentiating cryptographic currencies from cryptographic resources.

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(Disclaimer: The author holds investments in ether, bitcoin, EOS and Bitcoin Cash.)

2018 has already been another stellar year for organizations that raise funds for blockchain and cryptocurrency projects. While the first coin offerings (ICOs) showed an increase of over $ 3.69 billion in 2017, the total amount raised this year is already at $ 17.25 billion at the end of July, according to CoinSchedule.

If the current trend I have observed crowdsourcing funding for technology companies will continue, it will be important for investors to discern the nuances of investment in blockchain technologies and the virtual resources created on them, as the ICO investors usually receive virtual goods in the form of coins or tokens in exchange for ether or bitcoins. Here's what you need to know about blockchain and common resources.

Fundamentals of currency

To understand cryptocurrencies, investors must first remember the basic principles of currencies: they are typically units of measurement, deposits of value and means of exchange. Blockchain-based virtual resources, such as cryptographic tokens, often demonstrate these three characteristics of the currency. However, as an investor, I advise you to consider if and when these functions are just a byproduct of the goal inscribed by the creators in the asset code before investing in a cryptocurrency.

Ethereum & # 39; s Ether

Ether is a virtual resource on Ethereum. Even in the current bear market, according to CoinDesk, an ether trades at around $ 292. This puts the market capitalization of the Ethereum blockchain at $ 29.66 billion – which is not very far from the current assessment. of the ETF of the Vanguard Total Bond market listed on the NASDAQ.

The Ethereum Virtual Machine, which allows developers to write programs called "smart contracts", "is executed if the user makes a payment in his native currency and consequently, these transaction costs on the blockchain of Ethereum are labeled as "gas." Like its real-world counterpart, gasoline, I think this virtual gas should be valued by investors, not for its currency properties or the intrinsic value, but for the utility it meets in the Ethereum network More applications are created and used on the blockchain, the greater the probability that the application ether is present.

EOS

EOS is the native virtual asset of the EOS blockchain. IO While offering functions similar to those of Ethereum, users of the EOS.IO blockchain are not required to pay transactions in the native blockchain resource, "EOS." Block.one, which raised 4 billion the dollars to finance the launch and launch of EOS.IO, according to a report of July 2018 has allocated about 700 million dollars to grow the EOS.IO ecosystem. As with other cryptocurrencies, an advantage for investors is that EOS token holders can receive free tokens from projects funded by venture companies by supporting blockchain in what is called an airdrop. I believe that investors in Ethereum ether might also find it useful to keep at least a small number of EOS in their digital wallets as an easy way to track applications launched on EOS.IO.

Tokens On The Ethereum Blockchain

Ethereum's blockchain provides an easy to navigate token generation interface, referred to as the ERC20 token standard. This standard ensures that all people who control electronic portfolios that comply with this standard can receive new tokens generated in this way. These tokens can also be easily listed in exchanges that support this Ethereum standard and most of the more than 200 virtual asset exchanges do.

Tokens created by software engineers on Ethereum's public blockchain are usually coded to fulfill a specific function, such as triggering an event, allowing access to or assignment of others rights. Therefore, these tokens are not created as "units of measurement". Accordingly, I advise investors to evaluate these tokens based on the overall validity of the system in which they are used, using investment criteria such as the state of the technology, the team's experience and the product market. Good starting points for finding an investor are the LinkedIn profiles of the team members (for qualifications) and the activities of the project's GitHub repository (to monitor progress). The positive signs are teams led by technologists and depositaries previously successful with the development of the code that goes back over a year.

Bitcoin

The Bitcoin blockchain and its currency bitcoin (the lowercase letter "b" distinguishes the currency from the blockchain and the concept), is identified by its original creators in their 2008 white paper on currency as electronic money (registration is required). However, unlike the fiat currencies that are continually created and according to need by governments, the total supply of bitcoins is limited by the code to a total of 21 million, making bitcoins intrinsically poor. Although some of the major currencies accept bitcoin as a form of payment, most signals seem to suggest that bitcoin is purchased primarily for its "value shop" function. I therefore recommend that investors approach the purchases of bitcoins in the same way they would approach the purchase of gold: as a hedge against their stocks or stocks

Pure Cryptocurrencies [19659004] Some virtual activities have been created for the specific purpose of functioning exclusively as cryptocurrency. These cryptocurrencies include Zcash, Dash, Monero and Bitcoin Cash. Zcash publishes transactions on its public blockchain, but the currency privacy features allow users to hide the sender, recipient and the amount subject to transactions. Dash launched as "Darkcoin" also provides privacy functions to users and uses a self-governing organizational structure called a decentralized autonomous organization.

The value of any currency is determined primarily by the soundness of its monetary policies and inflationary tendencies. Investors seeking to add cryptocurrencies to their portfolio should familiarize themselves with the government blockchain models on which these assets are created and follow their specific use cases, which can generally be found in the white papers published by these projects. Adoption mainstream, as when well-known traders accept currencies and when US exchanges like Coinbase add them, it is also a positive signal for investors to watch while they build a portfolio of cryptocurrencies.

Conclusions [19659004] I believe that blockchains and their applications, such as cryptocurrencies, will probably play a central role in the future of any investment strategy. However, investing in these activities is not yet well understood. This is probably partly because of their nascent history and because of the contradictory management by US and foreign government agencies that seem to mistakenly confuse cryptocurrencies with other blockchain-based resources and functions. I advise investors to examine the individual merits of each blockchain project. They should use standard venture capital investment criteria, such as the team or community that supports the technology, the size of market opportunities and the current state of product development, differentiating cryptographic currencies from cryptographic resources.

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