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My rapidfire thoughts on some emerging alt-coins

Thoughts on alt-coins

I made some comments on some of the leading alt-coins on a Slack channel yesterday. People found it useful, so this is an informal quick and dirty paste of comments for reference. I might add more to this post later.

FCT – I like Factom, have just recently started holding them. I like that the project comes from a founder deep inside an industry working on a solution rather than the other way around which is the norm for crypto projects. You can see this playing out with industry players coming onto the technology, including government departments

XMR – I weary of it because its a privacy coin, I’m weary of all privacy coins for long term holds as I see privacy as a feature not a platform. We will be seeing privacy layers on BTC and ETH soon and this will be a bearish signal for XMR and others. You have to build something more to bring people in. I don’t think people really think through the practicalities of the use case. Passing through a private currency to buy stuff does not increase its value. People need to hold it, and people won’t hold a currency to later spend if it is too volatile. If you crunch the volatility numbers as Vinny Lingham has BTC needs to achieve $40b market cap / ~$3k per coin to be a currency people will feel comfortable holding to spend.

MAID – I hold this token but I’m a realist here. 10 years of propellerhead engineering. They are missing the hustle and have not demonstrated they can build enough hype to attract an excited dev community (see Ethereum’s ability to execute in comparison). Right now, they are even struggling to raise the amount Exodus has for the BnkToTheFuture crowd equity round, and that’s from a much larger community of supporters. I’ll hold some for a moonshot and will trade it till the cows come home, but I’m willing to accept there’s a long hard road ahead. Even if the tech works it could still die as adoption is key. Missing the right stuff there.

DASH – I also like and hold this one because it’s a functioning DAO showing much promise. That’s akin to startup investors backing a good team even if their product plan is shit. Dash is going for payments, that’s before its time – they’ve got a chicken / egg thing happening here. Merchants are waiting for users, users are waiting for merchants. When BTC hits $40b, it may have the economic signature for user adoption to have a decent shot at doing payments, but even then it may another 3-5yrs further along the track to win serious merchant support. BitPay and other payment vendors are all struggling in this before-its-time area. Dash? I dunno, but I put in a bet as it’s always good to back a good team that can execute, a DAO system with $1.5m per year annual budget spent well by a fervent community is nothing to be sneezed at. They got Dash into Exodus and Jaxx right?

XRP – People don’t understand XRP’s use case works off a buy/sell couplet. Each transaction generated by banks generates equal buy/sell trade orders. So adoption does NOT equal token value increase. Thus it’s a speculative coin, with traders deciding the value, no different from trading a shitcoin. Ripple Labs may make money with their bank support deals, but the token is just a working fluid that’s agnostic to the platform growth.

LTC – “Litecoin is the silver to bitcoin’s gold”. In tech I don’t believe there’s need for a silver to BTC’s gold. Instead we see network effects play out, we have Facebook but no MySpace as silver. I think historically LTC was the BTC hedge if something went wrong, but that’s more likely Ethereum these days. A coin needs a use case beyond store of value / investment / speculation as all crypto-coins are candidates for this purpose, the ones that attract holdings on another dimension gets an advantage. For example in Ethereum you have to buy ETH to power a dApp, and similarly can we see how CounterParty’s is mooning since they announcement that XCP going to be burnt to power their version of the Ethereum Vitual Machine?

I have a lot of brain-farts on crypto-currency. For more farting, follow me on Twitter @dangermouse117

BTC Tips: 1KrYzd8y6gnJekibZpb4ixif4nJYbaaZct

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One Comment

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