Steindorff: Investment assessments for established and emerging projects are conducted to ensure each project’s team and underlying technology fit within the guidelines of our general thesis and pass our initial set of criteria to weed out superficial, low growth and fraudulent offerings. Upon approval, our researchers collect, review and analyze all relative qualitative and quantitative data pertaining to the project’s team, thesis, code, security, vision, momentum, partners, roadmap, operations, structure, geographics, cryptography, incentive design, applications, utility, compliance, industry specifics, token mechanics, economics, competition and growth potential. You have to remember there is no P&L, there is no way to calculate a present value of future cash flows for a protocol. Since many of these projects are essentially developer tools at this point we think some of the strongest signals come from tracking engagement and involvement on Github and the strength and passion of the developer community around a project.
FunFair (https://www.funfair.io/) is a decentralised gaming platform, and it is advertised as “The world’s fastest Ethereum casino platform.” Thanks to their breakthrough technology, FUN tokens will be used as chips inside the casino. This is the first platform that solves many big challenges other blockchain casinos have. They have a working proof of concept (POC). They are working hard at finishing the development, so we should expect to see a raise in the token’s value once FunFair officially opens.
There are also similar tools for the crypto market — for example, Cryptoindex 100 (CIX100) is an automated index calculated by a machine-learning algorithm which analyzes cryptocurrencies. This tool allows traders to build sophisticated portfolios of 100 coins with reduced volatility and risks. Due to automation, human influences are reduced to a minimum. After the portfolio is built, an investor can track coins via specialized platform services from time to time.
Bitcoin is further ingeniously devised to guarantee that on average, new bitcoins are only found every 10 minutes or so. It guarantees this by ensuring that the code that dictates the new creation of bitcoin automatically increases the difficulty of the proof-of-work system in proportion to the number of computers trying to solve the problem at hand.
Beyond that, for most people, the best (i.e. simplest) way to invest in bitcoin starts with setting up a cryptocurrency wallet. Some of the better-known sites where you can do this are Coinbase, Bitstamp and Bitfinex, although there are a number of other platforms out there, as well. Once you establish an account, connect it to your payment source — a bank account or a credit or debit card — via two-factor authentication. Of note: It’s important to use a tool like Google Authenticator rather than just relying on text-based authentication, which can be more vulnerable to cybertheft, when investing in bitcoin.
Bitcoin exchanges are pretty easy to deal with if you have traded stocks, but futures exchanges are alien territory for many ordinary investors and require a much deeper understanding of the issues that determine risks and returns, things like time to expiration, volatility and the day's news. Futures traders need to stay on top of the situation all the time and be ready to buy or sell on short notice.
This has been the traditional method of earning bitcoin however, the rise of bitcoin mining farms has made it difficult to compete with for the average person. Not to mention the cost and maintenance of the hardware. Cloud Mining is an alternative that let’s you essentially rent hardware that’s already been setup for mining remotely. Saving you the hassle and setup costs.
Bitcoin is often touted as an electronic currency that will change the world, but it is also a highly volatile type of financial asset. In fact, many governments don't recognize it as a currency at all. In spite of the many merchants now excepting bitcoin, a lot of the activity surrounding bitcoin comes from traders hoping to make money on fluctuations in its value.
However, the cryptocurrency is a varied and often contradictory, marketplace. There are well-over 1,500 crypto projects out there; people who bought bitcoin at $20,000; others, like the Winklevoss twins who got in at $0.08; hulking great-big corporations in financial centers like Hong Kong, London and New York preparing $20m OTC buy-ins, as well as middle-aged dentists in the American Midwest injecting $50 into obscure coins that they think might well have a chance.
Unfortunately, the FDIC is just as dramatically underfunded as banks are. As the FDIC itself acknowledges, it holds enough money to cover just over 1% of all the deposits it insures. In other words, if banks reneged on any more than 1% of all their deposits, the FDIC itself would also fail, and everyone would yet again be left in the dust without recourse.
This is critically important precisely for incredibly volatile speculative investments such as cryptocurrency, and plays into the fourth mistake I mentioned above, day trading, as well. More than possibly any other market I’ve seen, short term price movements for cryptocurrencies are oftentimes absolutely mystifying and nothing short of mind boggling. Highly anticipated events, such as halvings in bitcoin’s reward per block mined, come and go without any real perturbation in price. Other times, things rise when reason seems to suggest they should fall, and fall when they seem to have every reason to rise. For instance, bitcoin’s price collapsed to $200 after the bubble popped in 2013, and stayed stagnant at those levels, despite massive development in bitcoin infrastructure and significant growth in the adoption and usage of bitcoin over that same period of time.
Consensus Method – One of the main differences between cryptocurrencies is their verification method, and the oldest and most common method is called Proof of Work (POW). A computer has to spend time and energy solving a difficult math problem to gain the right to verify a transaction. But the problem with this method is that it needs a huge amount of energy to operate. On the other hand, Proof-of-Stake (POS) systems try to solve this issue by letting the users with the largest share of the currency verify the transactions. These systems claim faster transaction speeds and require less processing power to operate. However, concern over security means that few coins use an entirely proof-of-stake-based system.
Digression aside, that sums up most of the thoughts I have about the primary things to be cautious about when it comes to bitcoin investment. There are a few more practical matters to be extremely cautious about (namely, how you store your cryptocurrency), but I’ll address those in the next part, which will be an actual how-to guide showing actually actionable steps for those interested in getting into bitcoin investment.
Bitcoin Investment is a private investment company focused on companies in high growth areas or high growth opportunities in mature industries. We provide investment-brokerage and asset management services to private and corporate entities. Bitcoin Investment manages assets of private individuals, pension plans, trust accounts, institutions and investment companies. The main priority of our enterprise is the maximum availability of our services to the investors of all levels.
In addition, we have other financial institutions trying to build up their crypto portfolio while the price is still low. Goldman Sachs setting up a 100% dedicated cryptocurrency trading desk, Bloomberg’s Galaxy Crypto Index Fund, Coinbase’s custodial services now set up for large institutional investors, Susquehanna getting into the mix trading millions of dollars of bitcoin for their wealthy clients, and now Blackrock, the world’s largest investment fund manager is looking to also get into the mix.
Steindorff: QTUM is an emerging smart-contract platform with a strong team and promising future. You can think of QTUM as a bitcoin/ethereum hybrid in the sense that the platform enables smart contracts to be built atop bitcoin’s UTXO blockchain. This is an important technological achievement as it enables mobile and IoT compatibility for smart contract backed decentralized applications, a feature not currently available with Ethereum. Mobile compatibility will accelerate the proliferation of smart-contract adoption among businesses while simultaneously broadening its use case as a digital currency via mobile friendly QTUM wallets. Additionally, QTUM has shifted away from the Proof of Work consensus model (Bitcoin/Ethereum) and instead leverages the Proof of Stake model which rewards QTUM token owners for confirming transactions via “staking” instead of “mining.” Without getting into too many details this method is both more environmentally friendly and less prohibitive for individuals to participate than the Proof of Work method. Since launching in early 2017 QTUM has garnered a massive community throughout the Asia-Pacific and the United States. We believe the QTUM team is unrivalled in Asia and their protocol stack has the potential to become the dominant Smart Contract platform of Asia.
According to Tolstoy, what lay behind the successful repelling of the French was not the genius or leadership of Russia’s leaders but rather the acknowledgment that victory could not be attributed to one or even a group of factors but quite simply, everything. To Tolstoy, the role of the individual in history was inevitably subservient to the greater panoply of events within which that actor operated.
Government regulation is a looming threat for many in the world. It is quite easy for a government to ban centralised cryptocurrency exchanges. They will not be able to control decentralised exchanges. This means that cryptocurrency investors should be able to trade freely on a decentralised cryptocurrency exchange, even if there is negative regulation in their particular country.
Going back to my personal story, ultimately the crash from $1200 to $200 for bitcoin was the best thing that could have ever possibly happened to me. At the time, of course, it certainly didn’t feel that way. It felt like I had made an absolutely stupid, foolish decision, and had lost all my money. In fact, I did make a stupid, foolish decision, but not for the reason I thought at the time. I didn’t make a stupid, foolish decision because the price had cratered to $200. I made a stupid, foolish decision in deciding to invest in bitcoin and altcoins without actually having done my research and without really knowing anything about them.
The short term price movements of a stock shouldn’t concern a long term value investor in the slightest, as a value investor doesn’t care about what the market has valued the price of a stock at, but rather only about the intrinsic value of the business behind the stock, and its future potential value. Only after coming to a conclusion about the actual value of a company and its future potential value, should an investor then look to what price the market has assigned a stock, in ascertaining whether or not a stock is a good purchase.
Litecoin was developed in 2011. While it has faltered of late in value with the other cryptocurrencies, if it gains back that value, it will be because of its strengths in comparison to bitcoin: Significantly faster transaction time (one major complaint when bitcoin exploded was that the increase in users slowed down transactions tremendously) and a larger number of crypto tokens.
Josiah is an assistant editor at CCN. A former ancient and medieval literature teacher, he has been reporting on cryptocurrency since 2014. He lives in rural North Carolina with his wife and children. He holds investment positions in bitcoin and other large-cap cryptocurrencies. Follow him on Twitter @Y3llowb1ackbird or email him directly at josiah.wilmoth(at)ccn.com.
The Bank for International Settlements, the central banker for global central banks, has warned that cryptocurrencies in the future could become a "threat to financial stability" if regulators aren't vigilant. U.S. regulators appear to be playing catch-up. As of Feb. 6, the cryptocurrency working group put together by Treasury Secretary Steven Mnuchin had held a single meeting.
Guy Hirsch, the US Managing Director of the trading platform eToro, recently shared his thoughts on the future of cryptocurrency index funds and ETFs, as well as the different aspects of institutional investment in cryptocurrency in an exclusive interview with ETF Trends. Hirsch told ETF Trends that institutional investors understand blockchain’s potential, adding the U.S. [...]
Hey Jhon, I haven’t found a crypto yet that is really related to my hobbies – Crossfit and backpacking – but I would actually advise steering clear of investing in things linked too closely to what you’re passionate about; whilst insider knowledge of an industry is really valuable, it’s important to trade without emotion and if your trading a coin that is linked to a great love of yours, that becomes harder.
There are already a number of proposed solutions to this issue, such as the implementation of the Lightning Network, but in order to implement these solutions, the majority of bitcoin miners must agree to update their bitcoin software. Many bitcoin miners are reluctant to do so, in large part because high transaction fees are good for miners, at least on a short term basis, as it means they earn far more per each block mined. The implementation of the Lightning Network and other solutions threatens to take away this extra revenue stream. Hence, users of bitcoin and miners of bitcoin find themselves at odds with a very understandable conflict of interest. It’s unclear as of yet how this will be resolved, though it seems the community is pushing forward towards a resolution, and I’m of the personal belief that they’ll get there eventually.
If the underlying blockchain won’t be the one to be used, the application is definitely doomed. If, for example, Ethereum fails to scale, its applications will fail to deliver. I do believe that the utility tokens that will enter the mainstream will do so by creating a service that’s much better than anything we have right now. These will be the so-called “killer applications,” whose returns will be beyond imagination. High risk, high reward.
Coinbase, for example, has been such a popular bitcoin investment app that its CEO posted to the company’s blog last week a warning that the sudden influx “does create extreme volatility and stress on our systems,” which can create a lag for users. The Chicago Board Options Exchange, on which the first bitcoin futures trading took place this week, warned that a flood of traffic ahead of the launch was slowing its site.
DISCLAIMER: Recommendations and Information found on Cryptopotato are those of writers quoted. It does not represent the opinions of Cryptopotato on whether to buy, sell or hold any investments. Investors should be cautious about any recommendations given. All investors are advised to conduct their own independent research into individual coins before making a purchase decision. Use information at your own risk.
Opportunities on this scale only seem to come about when the world is going through mass technological change. Yes, i’m likening bitcoin to the dot-com era and the thousands who made bank because they chose to become early adopters of the technology. They saw opportunity and took a risk which paid off immensely once the rest of the world got over their prejudice and realised the value.
Bitcoin fundamentally changes this equation. Unlike even gold, bitcoin is nigh impossible, when stored correctly, for anyone to confiscate without consent. The addresses at which bitcoin values are stored are protected by ‘private keys’, which can be thought of as a password or a key to a lockbox. Without this private key, it is generally impossible to steal the bitcoins held at the public address to which the private key corresponds. So long as you keep this private key secure, your bitcoins are secure.
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