It took ChatGPT for artificial intelligence cryptocurrencies to really see the light of day. Not sure we can keep a good count of every hype coin with an Artificial intelligence (AI) tag that zoomed off in green candles. A new way to launch a successful project in the crypto space now is to attach Artificial intelligence somewhere in your whitepaper…or just your Twitter bio. That’s all it takes to rake in a few million dollars. If you add “ChatGPT competitor”, you might as well create a multi-million dollar cryptocurrency project without even writing a good line of code.
No jabs at the reputable AI projects that have shown how decentralized Artificial intelligence solutions can be created. In past articles, we have featured Singularity (AGIX) and some projects from its ecosystem (Singularity DAO) and have also tipped the project to climb to the top 20 positions, alongside FetchAI. That prediction is still a bit far from coming to life, but there’s a wave and anything can happen.
Talking about ‘wave’, the crypto space has welcomed some ridiculously overwhelming waves. Meme coins, privacy coins, DeFi projects. We’d add ‘bitcoin alternatives’ but that will give way for an almost everlasting wave, ‘Ethereum killers’. Now hats off to every other wave, apart from meme coins…we are yet to unravel why they really became so important. Maybe this article can help though.
The AI concept is another tech-oriented wave and the big question is, has it really begun, or is it fading away already? A private opinion, but the answer to both questions is NO. A little controversial, it is inevitable that some over-hyped Artificial Intelligence projects will see a decline and complete fade-off whenever the crypto space sees a sell-off. But for the blue-chip AI projects, the wave is still setting in.
Privacy coins took a big hit due to the regulatory hinges that the crypto space will continue to suffer for all of its existence, meme coins will keep rolling the green candles as long as Elon Musk continues his pro-DogeCoin tweets and teasing his new Twitter CEO — Floki. DeFi coins, well, it all depends on the APR offered in the liquidity farms and staking pools.
A high-level info-bot was all it took to remind the whole world that artificial intelligence is the next level of technological evolution. Super software, humanoids, and learned protocols. These are the future, the present could be in doubt, but as stated earlier, the wave is just kicking in.
A valuation for a good Artificial intelligence solution? If a meme coin could hit a billion in valuation, then a good AI solution should get to multiple times more. It is hard to pick a project that makes it to this point, it’s probably not even launched yet but a few veteran Artificial intelligence projects have what it takes to make it to this level. Feel free to shill your favorite AI project in the comment section. Shilling is one of the most productive marketing plans anyways.
While many empty projects will surely emerge in the coming days with talks about AI and machine intelligence, the crypto space will surely house a handful of super successful AI projects and they will be there in the long term.
Andre Cronje in a tweet shared his ideas about Artificial Intelligence and blockchain technology. Even though he opines that blockchain technology and AI aren’t really a good match, there are numerous ways to bring both together, and a few projects are already exploring that…or exploiting, rather.
What’s your favorite AI project? Definitely, one that has made you a 10X return, but no worries, that’s the best feature any cryptocurrency project could have. Let us know about it anyway; someone might have a few dollars to spare, or a few FUD to spread.
Meanwhile, nothing said here is financial advice, always do your own research; and Follow us!
The internet has grown with other information technologies; arguably the most popular technology. With an infinite connection of people from different locations and backgrounds surfing the internet every day via the web, the internet presents a platform for information dissemination at a flash speed, relative to pre-existing means. Together with these pre-existing and emerging information technologies, the internet has made information spread at amazing speed.
Functioning as an application layer protocol running on the internet, the web is home to many ideas and many innovations, it has formed a huge part of the internet age. To many; the internet age is championed by the web. This is not far from the fact anyways.
Computer programming languages have enabled the creation of utilities on the web. It is hence not only a protocol on the internet, it has become quite home to everyone who has access to the internet, well-crafted gadgets have also been developed to enable more enhanced and efficient web functionalities.
‘The World Wide Web’ takes you to a world of infinite possibilities and opportunities.
During its first generation, the web was mainly a hub of information and ‘documents’. Simply, a platform hosting information written in the hypertext markup language (HTML), with little or no user interaction with the website.
The emergence of more advanced programming languages including HTML and also the evolution of the computer and the internet enabled the creation of web platforms with more user interactivity. A web platform where users can interact with the website to a very large and also with other users visiting the website, thus the birth of Web 2.0
Coined by Darcy Dinucci in 1991 to imply a second generation of the web evolution; the term ‘web 2.0’ is a collaborative and participative web platform that allows its users to perform social activities on the web such as generating their own content and interacting with content generated by other users of the platform and also with the users who generated this content.
Several web 2.0 applications have had a major influence on our everyday life. From blogging platforms to video hosting and sharing platforms where users can interact with content, generate and share their own content. With the web 2.0 resources, commercial applications have been built on the Web, and information from a web 2.0 platform can be distributed to and used by other platforms via information distribution algorithms such as web APIs and RSS (RDF Site Summary)
Web 2.0 platforms are hosted on a server with one entity controlling activities on the platform. This control is unlimited and spans almost every aspect of the platform including content generation and information distribution on the platform, personal profile creation, and personal profile details.
Owners of these platforms hence possess total control of the platform. This serves some positive purposes as owners of the platform can easily control activities on the platform to ensure that it complies with the terms and conditions specifications. This ability to censor content generated on web 2.0 platforms leaves users with the role of ‘mere participants’ who hold almost zero control over how they are treated on the platform.
On the dark side, owners of web 2.0 have in many instances misused their access to every activity on their platforms including confidential information about the users of the platform. Information about topics of interest has also been censored or put down by the controllers of these platforms in cases where such information is against their interests or gives put vital information on some issues which expose certain parties related to the platform.
Having known the enormous influence information has on the audience, parties directly concerned with a subject and other interested parties tend to modify information reaching out to the audience as regards the subject. Putting away some aspects of the information going out, modifying it to suit their interests; and in most cases Suppressing others who have access to more knowledge about the subject from sharing this information. If there’s any specie in the information age that has been endangered by web 2.0, it is the freedom of speech.
While the centralized internet has arguably created a healthy internet, its dark side is big enough to override these imagined regulations. Cryptocurrency speakers and enthusiasts are currently having a rough time with video hosting platforms as well as blogging platforms. Articles and videos related to cryptocurrency are being censored and put down and in some cases, their profiles on these platforms are banned or restricted as the case may be.
This simply attacks a topic of interest that people needs to have the right information about, while topics like this do not pose any threat to human life or negatively disrupt existing information, many harmful activities and contents are left to float on these platforms.
Failure of web 2.0 in these aspects has once again left internet users scrambling for a healthier environment where they hold some or at least, total authority over how their generated contents and personal information are handled by the administrators of the platform — a decentralized platform where users are in charge of themselves and others have almost no direct control over their activities.
In a decentralized internet; each user is like a well-fenced building in an estate and each building is fenced individually with another common fence protecting the whole estate. This depicts an independent platform where the users are independent of the administrators and other users as each profile is hosted differently on the platform.
In contrast to centralized platforms, decentralized web platforms present a disseminated governance system where each member has tangible control of their activities. Decentralized web platforms are also known as WEB 3.0 platforms.
Web 3.0 technologies redefine the back end of the web. They distribute equal rights to each user while the web front end remains relatively the same and the front end works as usual. The back end of the internet is structured to serve equal rights to users.
The web 3.0 revolution is led/enabled by blockchain technology. The blockchain is a ‘chain of blocks’, Blocks are permanent stores of immutable data/information. These include information such as agreements between the parties in the transactions; the name of the sender, name of the recipient, and the amount transacted.
Web 3 platforms are powered by the blockchain technology Source
A block could store just any information, in cryptocurrency transactions which is the most popular context of blockchain applications, a block holds records of all recent transactions.
For new information to be stored, a new block must be created. The new block is referenced to the previous block, information cannot be added to the previous blocks and its information cannot be edited.
Each block contains a record of data and an identical hash (a cryptographic code) that identifies the block. To ensure more security and stability of the blockchain, the blockchain servers (node) are run by each user of the blockchain, every user running a node verifies each block before it is created.
Web platforms built on the blockchain copy this concept too. Each user who creates an account on the platform owns an account that runs on the blockchain. Activities by each user are verified by other users and are stored on the block. The block is immutable, hence these activities including contents generated by the user and the user profiles are stored permanently on the blockchain and cannot be censored or removed completely from the blockchain. This solves the problem created by the centralization of the web in web 2.0.
Web 2.0 platforms continue to wallow in centralization and censorship by administrators of these platforms as complaints from content creators on these platforms continue to rise. Emerging web3 platforms on the other hand have delighted their users with their immutability and decentralization. Content creators on these platforms are rest assured of the safety of the content they generate as well as the safety of their platforms which they have worked so hard to build.
Web3 platforms offer immutability and censorship resistance, one would wonder how it regulates unhealthy activities on the platform…
Web 3.0 technologies create multiple points of entry to platforms and as well, multiple control units. These units are in fact controlled by the whole users on the network. It employs specialized algorithms and technologies such as Artificial Intelligence (AI) protocols to ensure that the system works for the users just the way they (individually) want it.
Like a ‘plug and play’ system, connecting your wallet to a platform is all you need to experience a world of possibilities. Web3 platforms preserve user identity and data.
That being said, most web 3 platforms also offer a flexible means of remuneration — Cryptocurrency. Depending on the blockchain platform where a Web3 platform is hosted, participants in the network can be rewarded using native cryptocurrencies.
Cryptocurrencies are cryptographic tokens that run on a blockchain. They are flexible stores of value. Most blockchains, enable users to access certain features of the blockchain. These tokens can be easily transferred from one user to another. In contrast to certain web 2.0 platforms, this flexible means of remuneration relieves the users of the huge stress they go through to monetize the contents they create on web 3.0 platforms. Given the ability to monetize (most forms of) participation on web3 platforms, interactivity on the web is enhanced as every user is incentivized to participate in form of creating content or interacting with the platform itself.
The future is ‘decentralized’. Some Web 3.0 projects are developing decentralized versions of existing internet facilities including VPNs, SDKs, and Routers. This extra equipment in synergy with websites built on distributed networks will power the next generation of the web and internet.
A major barrier to web 3.0 adoption is the complexity of these platforms and the fact that most blockchains currently do not (or poorly) scale. The pronounced complexity makes it hard for average tech enthusiasts to use these platforms. Blockchain as a concept is still emerging and a majority are yet to grasp how it actually works.
Unable to scale, most blockchains are ‘heavy’ and get even heavier as more users adopt their technology. This decreases efficiency…a major turn-off. Nevertheless, there’s still a long way to go for a concept as young as Web 3.0
It’s safe to say that Elon Musk facilitated two very interesting trends; electric cars and meme coins. To the moon! But before that, how much have you earned by simply holding ‘baby’ tokens? Only very few ‘blue chip’ projects are yet to get a ‘baby’ token which yields their holders some dividends in parent tokens for holding the spinoff tokens.
The crypto space offers a free market opportunity where concepts sell according to market demands. Regardless of intrinsic values, a project’s valuation could steam from numerous factors; ‘luck’ included. DogeCoin’s transition from a ‘joke’ fork of the bitcoin blockchain to a top ten token in a Two-trillion-dollar sector with tons of other relatively ‘more useful’ projects, goes a long way to portray the randomness of the crypto space.
Well, that’s not the first time this space has looked ridiculous; and not the last time either. If you bought some Safemoon and sold it off at its all-time high, then you’d probably be in a realistic moon currently, same if you invested in a number of meme coins.
Meme coins hold one thing in essence, ‘communalism’. Interesting, to be fair; group marketing creates enormous hype and could drive a huge buy pressure on the concerned project. Meme and moon coins utilize this idea a lot and make tangible price and community success thanks to the correct use of this strategy.
Hype marketing has played out well for a good number of cryptocurrency projects. Well-planned shills by a group of people could create thrills and lure potential investors into investing in a project despite having no clear information about the project. These projects sometimes involve prominent cryptocurrency influencers and mainstream celebrities creating these shills.
If done well, hype marketing could override utility and push a project to tangible price levels regardless of the proper utility it presents. This growth despite being organic is actually built on ‘unverified beliefs’ and bloated utility.
Memes are cool, but are they worth over 40 billion dollars? Well, arguably. The doge army would present reasons why they think dogecoin should actually overthrow bitcoin at the apex, lol. Regardless of how convincing these reasons may be, meme coins owe a majority of their success to well-planned hype marketing…and Elon Musk.
Alright; you might not be a fan of jokes and memes, and communalism either, but passive income is an idea everybody fancies; well, most people. If that’s the case, then you’d fancy some of the ‘baby’ coins being filtered into the crypto space.
Baby tokens reward holders by selling contract taxes to buy parent tokens and distributing these tokens to holders according to the proportion of tokens they hold. Dividend tokens are usually allocated in a 1:1 ratio and enable automated distribution of the concerned parent token. These protocols are all embedded in the smart contract. Tweaks and ‘hacks’ are possible anyways. Well, I’d say ‘technological exploitations’
Actually, it doesn’t matter how the rest of the crypto space feels about these tokens, they skyrocket at launch. Only a few of them manage to maintain this speed for a while though, most others falter as the hype falls. Nevertheless, they make a bold statement about marketing in cryptocurrency and the world outside it.
A true businessman knows the value of marketing; however, the same cannot always be said about a nerd who prefers to push code bits to GitHub and deliver clever solutions. Disproportionality between marketing and technology has seen mediocre projects with good marketing climb the stairs in terms of market capitalization while plausible projects languish at the bottom and most times, die off.
You probably have your reservations about ‘marketing coins’ and hype marketing as a concept; but there is no denial about the fact that they shine a light on subject many projects ignore — marketing. Successful cryptocurrency projects are built by properly marketing good utility(ies). When done so well, one might offset the effect of the other.
Well-developed utility, successful hype marketing? A project might survive by having just one of these. The perfect strategy is a combination of the two, many projects with solid utility and tokenomics miss out on the latter.
A lesson to learn? I’m not sure if these other projects are willing to learn from memes and ‘baby’ tokens.
Ridiculous fees apart, using decentralized exchange services has been really fun! Using DeFi services on platforms where fees and efficiency issues are fixed brings a true feel of decentralization.
The comfort, the security, the speed…oh well, just many things! DeFi protocols are mavericks and make centralized exchanges look so ancient despite being just about a decade old, lol.
My frequency of using centralized exchanges has decreased over five times the initial. If we can get rid of fake volumes, centralized exchanges are obviously bowing down to decentralized exchanges; in terms of volume, user base, and application.
The fact is, centralized exchanges aren’t even real competition to contemporary decentralized exchanges the difference is clear. Mainstream trading system will probably get usurped by DeFi protocols.
In addition to decentralization, security, and efficiency; Automated Market Maker, the protocol powering trading on decentralized exchanges is the main technology poised to put centralized exchanges to rest. AMMs are built to ensure organic liquidity and create real-time trading effects. Unlike centralized exchanges, AMMs are all shades of good. In the real sense, it’s AMMs Vs CEXes!
Despite years of efforts and modifications, fake volumes have continued to bite down on the reputation of centralized exchanges. Aided by exchange officials or solitarily, cryptocurrency projects could easily fake buy and sell orders to lure investors who are attracted by high volumes as proof of demand and liquidity.
This fake liquidity and high demand would quickly dry up as soon as the manipulation ends. Well, if the manipulation was able to lure enough investors and traders, then the decline will be gradual. If the project is unable to drive real demand, the liquidity dries up once again. Investors are only left to mourn their losses in cases like this…the ripple effect continues.
Apart from projects luring investors with these volumes, exchanges as well adopt this strategy to boost their numbers and attract users. Exchanges or cryptocurrency projects…I can’t tell who did this first.
Trading and liquidity manipulations on centralized exchanges also tarnish the organic effects of buys and sell. High volumes of huge buys, yet the very little effect on prices. Unfortunately, these positive effects are wiped away by relatively lesser sell orders. Everything looks programmed! For unstable projects, this phenomenon is even clearer.
The inability to estimate the depth of the liquidity pool and the effects of buys and sells on the price makes trading harder and less fun. I’m no trading expert, but being unable to access the originality of the trading activities for a particular token makes trading unthinkably tough.
Centralized exchanges and their technology have served for the time they dominated the space. No doubt, they flourished due to the incredibly handy services they offered. In essence, these services were the best available.
In contrast, Automated Market Markers, despite not being without their own shortcomings are programmed to be highly organic and responsive. Like a real-time trading system, every bit of supply and demand creates a relative effect. Traders and investors are handed efficient tools for making decisions and projects are represented for what they truly are…at least for that point in time.
Thanks to liquidity pools, AMMs provide a basket of exchangeable assets to enable unrestricted trading for the period in which the liquidity providers wish to leave their assets on the pool. The transparency of the liquidity pool allows traders to make their decisions.
AMM protocol ensures that every buys and sells effect reflect relatively on the asset price. AMMs are not completely resistant to manipulations, this is evident in the rampant rug pulls. But on the brighter side, these actions are transparent; an important feature of blockchain technology.
Smart contract technology also creates an avenue for ‘liquidity locking’. This solves rug pulls to an extent. Liquidity locking ensures that provided liquidity cannot be removed for the period of time specified in the locking process.
It’s not just centralized exchanges; trading systems around the world will surely adopt AMM strategies sometime in the near future. In my opinion, it is the future of trading and exchange.
What’s your biggest attraction towards GameFi projects? if we are being honest, play-to-earn will form majority of the answers…probably 100% of the answers. Axie infinity’s success quickly influenced an outpour of decentralized gaming projects with earning opportunities for gamers and investors alike. Binance smart chain’s ‘Cryptoblades’ posted astonishing price gains as users flocked to the platform to play the game which rewards them with tradable tokens and Non-Fungible Tokens.
Success stories from players littered the crypto space as more people flocked to the platform. A ton of other similar platforms would quickly emerge, a new trend was birthed! A lotof users testified to earning more than their annual salary from simply playing ‘games’ on the blockchain.
Hypes, disappointments, and inefficiencies; many of the new and existing blockchain-based games failed to meet up with users’ expectations; financial and technological expectations. Technically, most of these games were far from properly developed. Users would describe them as ‘3D casinos’.
You’d expect these shortcomings for projects built on an impatient community of users with high hopes of turning their financial conditions around by simply playing games on blockchain platforms.
“It’s a scam!” says users whose expectations weren’t met by the new game released by developers after just three weeks of development. But technical issues are hardly the main disappointment. Lamentations steam mainly from users’ inability to earn as much as expected from the games. In some cases, users run into losses leading to more intense ‘scam’ allegations.
GameFi projects easily suffer huge price losses and endless backlash. Investors, disappointed with the low earning potentials continue to air their views in the sternest way, further confirming the fact that cryptocurrency enthusiasts are in fact more concerned about the earnings, and not the gameplay itself.
The direct juxtaposition of gaming and earning in GameFi projects haven’t really worked best as normal human greed gets the better of these projects. little shortcomings result in heavy price drops and loss of interest. In a space where investors are quick to suspect ‘scams’ (and rightly so); emerging technologies like GameFi face a huge war between good and Bad…and the ugly.
But, how far has GameFi gone exactly? I’ll say, ‘very far’. Unfortunately, this is hard to realize when players are more focused on earning and will gladly shove aside a good game if it doesn’t offer a good earning opportunity. Passion aside, GameFi platforms have attracted more users in a very short period of time than most popular games.
EA Sports’ FIFA21 recorded an astonishing 31 million players on both PC and consoles, an additional 6 million players from its previous record. Taking into consideration, the rate of adoption and resource availability, GameFi platform has outperformed even the most popular football game. Axie infinity has reportedly recorded an excess of a million daily players!
This impressive growth is, however, influenced by earning opportunities as human greed comes into play once again. Despite the enormous number of daily users, players on GameFi platform hardly complain about technological shortcomings if the earnings are good. To be fair, most people would do the same, why complain when the money is good? Rhetoric with a simple answer.
While most mainstream games don’t have direct earning opportunities, players develop a way to make external earnings by contributing to the games’ growth. Popular ‘Call of duty’ players make tangible income from showing their gameplay on streaming platforms. Game critics and analysts make good incomes as well. In plain words, players flock to these games for the real fun they drive from just playing the game.
In contrast, GameFi’s Play-to-earn gets rid of the fun and users care least about the gameplay and how fun they are…the money will bring the fun, lol.
Will GameFi do better without play-to-earn? Well, YES and NO.
Withdrawing earning opportunities from decentralized gaming platforms will allow faster technological growth, however, an opposite effect is expected on adoption as fewer people will play without earning; very few.
NO, for short term, and Yes, for long term. Taking off earning opportunities will inevitably reduce participation, but on the brighter side, the pressure to deliver in a short period will be taken off the shoulders of game developers. Project development will as well move more smoothly as price talks won’t impede development. In the long run, the release of well-developed games with really fun and interesting gameplay will drive even more users.
Remember the scenes from the 2014 movie; ‘A million ways to die in the west’? I’ve lost memories of most of them. However, I still remember the scene where a dollar bill was put up as a wager for a shooting challenge. ‘Take your hat off boy, that’s a dollar bill!’ The excitement, the respect, it was a whole dollar bill. Fast forward to our contemporary society, dollar notes and every other fiat note are nowhere close to commanding that level of value and respect.
Years of continuous use by an ever-growing population of people, years of continuous printing by an ever-running printing machine; the value of fiat currencies has suffered so much from inflation and poor economic practices.
Staying true to its initial value is a losing war that it is tired of fighting and has given way to a steep-speed fall in value. The United State dollar remains the most widely used medium of comparison to the other fiat currencies, but despite this wide use and good economic backup, its value has been on a free fall over the past couple of decades.
A rather logical stuff, considering the fact that a higher percentage of dollars in circulation today were printed over the past five years. Other currencies have seen similar irregular inflation as the global economy continues to show instability. You’d agree that the current global economic system is imperfect, I’d say it is almost ‘completely faulty’. Despite surviving for so long, the fiat system and centralized currency issuing scheme haven’t really been so efficient. The parabolic fall in value over the years is a result of these shortcomings.
While dogecoin is taunted as the currency of a new world out of earth, bitcoin has surfaced in arguments over a healthier medium of exchange on earth. Could both work? Elon Musk has a better answer for the former, I’ll share my opinion on the latter.
Bitcoin; it’s been one concept against tons of relatively older systems. The banks, the fiat system, the valuable metals, altcoins…dogecoin. For a concept that has seen such audacious growth in the past decade, it is not a surprise that bitcoin is constantly in many arguments. Thanks to the bitcoinners too; these maximalists find a way to throw bitcoin into every financial argument. To be fair, many of their argument over the superiority of bitcoin as an alternative to many contemporary financial systems is valid to a large extent; even though I don’t agree with bitcoin’s perfection.
Bitcoin’s technology flaunts generality and portability. If you’re not running a bitcoin core node, then you just need a lightweight application to manage your financial activities all by yourself. While this is convenient in the normal sense, it is not without certain shortcomings. Regardless, this shifts the power to the users in contrast to the current system where the ‘managers’ in the custody of your assets hold the upper hand.
Decentralization and ‘personalization’ put you in charge, a concept growing in acceptance in our contemporary world. In this case, bitcoin offers what the current generation longs for. Superior? In this case; bitcoin wins over traditional systems.
Bitcoin’s generalized value creates a global value system and a uniform currency. But how healthy is this? It is hard to say what a currency backed by a globalized financial system will look like, but if bitcoin succeeds at becoming one, then it will be an exciting experience. A financial system of this nature is largely unsustainable.
The segregation of national economies serves a good purpose itself. Placing different countries in charge of their financial success isn’t bad. Bitcoin’s generality contests this, an idea I don’t buy. Bitcoin doesn’t tick all the boxes for me; this is one of them.
‘There will ever be twenty-one million bitcoins’. Bitcoin’s fixed supply is regarded as a fix for inflation. For me, that works. Yes, it does. The global economy is riddled with unregulated inflation. Millions are printed from the tin air, just like the tether machines. Seriously, the tether system depicts the global economic system to a large extent.
Bitcoin cannot grow in total supply, circulating supply may vary as a couple of millions of bitcoins remain unmined and thousands of bitcoins are being lost to mismanagement and accidents. Instead of growing in supply; bitcoin can only grow in value, we have seen this play out very well.
Price stability? We all agree that bitcoin has a very huge work to do as regards this. Volatility is a huge turnoff if bitcoin or a similar technological solution will make it to the top of the global financial system. Despite an over 97% loss in value since its inception, the dollar has remained ‘relatively’ stable. Yes, compared to bitcoin the annual variation of the dollar’s valuation has remained constant. Exceptions to this are special periods like wars, pandemics, and related global or national situations. In contrast, bitcoin loses significantly when Elon Musk tweets, jokes apart!
Speed and cost-effectiveness? If the lightning network works the way it is proposed to, then bitcoin will have little to worry about as regards the speed of transaction confirmation. Lightning technology presents super-fast bitcoin transactions. However; if it fails to live up to the bidding, the bitcoin blockchain’s current speed isn’t fit for use on a large scale.
Imagine waiting for minutes to have your coffee after paying in bitcoin as transactions must be confirmed before your purchase is handed to you. A really tough situation. With fiat in your hands, you can pay for tangible commodities without having to pay a fee each time. This is different with bitcoin as well as many other cryptocurrencies. Paying a fee every time? There must be a better way to do it! Bitcoin doesn’t solve this.
Eco-friendly? Bitcoin is not any better than the current financial systems as regards this. While it is not necessarily worse, it is not better. Intensive use of fossil energy for bitcoin mining and intensive use of similar energy for running financial activities in today’s systems, both systems fail at this. However; if bitcoin is dubbed as a ‘perfect’ fix for global finance, it should address energy use and environmental compliance.
Bitcoin has made a bold statement. This statement is largely price-wise, apart from this it hasn’t progressed so much in technology and adjusting to fit the reputation of a better alternative to the global financial system and even a store of value. Relative to its competitors it is still in its early stage and has enough room to grow. With clever minds piloting its growth, it stands a chance of penetrating the global financial system; actually, it’s safe to say that it’s already done so. But this is just the beginning of a very long journey.
A couple of disclaimers on cryptocurrency investment advice and endless warnings, ‘cryptocurrency investments are very risky ventures…and the earth is flat’. Well, one is a fact; the other is probably another way to look at facts. A little focus will tell you which is which…just a little teaser there, but that’s by the way.
Alright, fact is, the earth is a sphere, and cryptocurrency investments are very risky, but that’s just another way to look at facts. Risks and rewards are related, sometimes this relationship could get toxic. The crypto space has been buzzing for a while now, anyone who took the risk before this time must have reaped from that audacious move. Recent strives by cryptocurrency and blockchain technology have once again flared the hunger to invest in decentralized solutions, but many are still scared to join the bandwagon
It’s human to get scared, but it’s mastery to stay in complete control of these fears and ride against the waves. While some investors are hardly overpowered by their fears, others would need tons of advice to make a choice.
But that’s by the way; Cryptocurrency just like most other investments is a very risky venture, there’s unarguably a more pronounced risk when it comes to cryptocurrency. The outrageous fluctuations and nerve-spinning volatility give it a good place amongst ‘a thousand ways to die in the west’…that wasn’t meant to scare you! For experienced investors and risk-loving individuals (like myself!), volatility is a very tasty stuff, but sometimes it might burn hands.
Before you bought your first stock, you probably made a couple of research and calculations, a very good number of investors do clever research before putting their money on the road; a very important step in investments. Venturing into the crypto space, the scenario is almost the same. But in general, blockchain technology that powers cryptocurrencies glitters with many enticing features which are just too good to be ignored. ‘All that glitters are not gold’, yeah, I’m sure you said that to yourself at some point, but if gold glitters, then you’re closer to hitting gold if the glitters get more enticing.
For a technology, blockchains are one of the most interesting inventions of the past couple of decades, the ability it poses and its numerous applications are certainly one to look out for. Cryptocurrencies aside, blockchains are one of the most advanced computing protocols which are unsurprisingly gaining mainstream attention. An immutable store of data, a flexible network for building almost anything on the internet, the list is endless. Venturing into the crypto space is as good as swimming in the oceans of blockchain technology, getting used to what has been a tangible offset of traditional ways of data storage, internet, finance…to mention a few. Regardless of the risks, these features should make you give it a try.
The Future.
A very quick follow-up to the aforementioned point. The features of blockchain technology are currently under-utilized and for any attentive investors, this technology is just starting to gain global recognition, and the only way is ‘up’! the future of cryptocurrencies and blockchain technology may be speculative, but that’s a common step for inventions poised to change the way things are done globally, taking a look at the bigger picture, cryptocurrencies, and blockchain are one for the future, the limits are beyond reach, better said, there are no limits and impossibilities are just weak words thrown around by people who find it hard to chase dreams. This is the same for cryptocurrencies and blockchain technology.
Cryptocurrency investments are risky, but it is even riskier not to take a close look at the future and your biggest regret might be not securing a part of the future. Stocks will still be a part of the future, same as digitized precious metals and fiat currencies, but cryptocurrencies are poised to be the newcomers and might be an important part of the future. Shaun the risk, secure a place in the future, try making your way into the crypto space.
The Fortune.
I seriously resent the idea of cryptocurrency investments as a “get rich-quick scheme”. But it is hard to ignore the fact that cryptocurrency investments make mouth-watering returns. For investments in the last decades, cryptocurrencies have made the biggest return on investments, posting up to 20X gains. The ‘fast money’ idea is surely an unhealthy one and an investor who really wishes to be successful in the crypto space must first get rid of this orientation and embrace the technology and avoid being over-expectant of their crypto bags. Regardless, there is an already proven fortune in cryptocurrency investment, but just like every good thing, this takes a lot of time and requires some good level of patience and persistence.
Your Tesla stock might have made you some good gains over the past five years, but most cryptocurrencies have made way more during this same period of time, this is unarguable. With more risks come even more rewards, dive into the ocean, take the risks, give it some time, reap the fortunes.
The Freedom
Stocks are great, digital gold are good investments too, but what about an investment that gives you total control over what you own? Decentralization in cryptocurrency gets rid of third parties and middlemen in handling some core financial activities such as blockchain-level send and receive. The freedom of being able to send a store of value across to anyone anywhere and not worry about exchange rates and delays due to the banks not processing payment, or even decline of payment because of some blurry reasons is something you should really pay some attention to.
Cryptocurrencies come with some enticing level of freedom and privacy in the management of your finance and performance of some core financial activities. Probably this doesn’t sound so clear to you, but here in the crypto space ‘you are your own bank’, guess that sounds better! You don’t need a stockbroker to help you invest in cryptocurrencies, the simplicity makes it possible for a total noob to invest in cryptocurrency and manage this investment. Decentralization in cryptocurrency cuts off the middleman in most core management procedures.
Still need to be convinced, you certainly have your reservations, but if anything can change your opinion, it’s one of these four…
Whether you are here for the ‘quick bucks’ or for the technology; one thing is certain, you wouldn’t want to lose your investments to price crashes and the constant fluctuations in the values of cryptocurrencies. Regardless of one’s financial status as an investor, good profits delight every investor. But making profits in cryptocurrency sounds easier than it could actually be…well, sometimes it sounds harder anyways.
“Buy low, sell high”; or better still, “buy the rumour, sell the news”. A couple of phrases have been coined to insinuate the best time to buy cryptocurrencies…and the best time to sell them. Either you are buying when the price ‘appears’ to be crashing or you are buying before an official ‘exciting’ announcement by a cryptocurrency project team. For an investor, any of these two times is presumably the best time to invest in a cryptocurrency project. A huge majority of cryptocurrency enthusiasts are in search of times like this.
But if there is any sector where rules don’t exist, the crypto space will surely be one, if not the only. Price movements, use case valuation, projects’ permanence…you name it. Every aspect of cryptocurrency is highly variable and there are almost no experts and everyone appears to be Predicting. These predictions could go either way.
In the same vein, the “best time” to invest in cryptocurrency projects has been a popular gamble. When to buy, when to sell; it would have been very interesting if anyone could tell for sure the best time to do these. Whenever you have a satisfactory gain or when you’ve had enough of the loss, you can sell off your cryptocurrency holding, hence, the best time to sell is way easier to decide.
However, this is different when it comes to buying/investing. Investing in projects at the ICO level is one of the options. Altcoin projects sell several tokens to raise money for the projects’ development and marketing. Tokens are sold at a relatively low price. Investors predict low chances of tangible price drops below ICO levels. Well, this is the case some of the time, but the story could be very different some other times. Several projects have struggled after their ICO and impatient and unimpressed investors move to sell their stakes below the ICO price. For an investor who bought at the ICO price, it wasn’t the very best time to invest.
What’s another ‘better’ time to buy? Dip time? Well, learn to buy the dip…I’m finding it too hard to learn that, lol. When cryptocurrency prices dip, the market is only allowing youto invest. Dip times allow you to buy more at lesser prices, sell pressure overpowers the buying pressure and the market comes crashing. After a 10% price drop, buying the dip looks tasty, depending on how exciting a project’s fundamentals are, investors swarm to get some cheap tokens from weak hands dumping their stakes. However, the 10% drop might just be the first of many to come. When this is the case, prices keep crashing and the dip continues, and yes, the dip continues…lol. When this happens, your “best” time appears to be just a ‘good’ time if at all the project completely recovers from the dip.
Well, ‘buy the rumour, sell the news’. The crypto space is not only an innovative zone, it is also home to the biggest marketing hype and propaganda. When in obscurity about a pending announcement, influencers and holders tend to hype a pending announcement. A SpaceX collaboration? A merger with Tesla? Lol, you could see rumours like this fly around in suspense. But these could lead to huge price jerks running in multiples, the actual announcement most times is unable to impress the already elated investors who hope their investments become the project that flips Ethereum…or bitcoin. Investors take advantage of this to buy before the rumour spreads and sell just before the actual announcement. Sometimes the news is worth the hype and the price uptrend continues, but an investor should have less to complain about if the gains were good.
The best time to invest is relative, largely personal and determined by your willingness to hold on for dear life or to sell at a loss, or profit. It doesn’t get any worse than a terrible price drop, but investors stand a chance of recovering if they can hold on till when the price recovers — if it ever does. It is hard to determine the best time to put your money on the road, but it is easier to develop patience for your investments regardless of when you invested or where the price is at the moment. Cryptocurrency investments are risky and good research only lessens your chances of hitting the rock with your investment, but a good HODLing attitude increases your chances of striking gold with your investments.
Prior to the hard currency era, the barter trade system attaches value to real goods. Even in that era, real goods become a token of exchange. The valuation of an item depends on its availability and the demand for it. Tokenization is as early as ‘exchange’ itself.
A Token is a store of value attached to a concept, an event, or a project. Tokens attached to a project tend to embody the value of the project itself. A token hence is a representation of the value of the concept it is attached to. In simpler terms, a token derives its value from the concept or project it is attached to.
Tokenomics in plain terms is Token economics. Broadening this definition, tokenomics, it’s the science of token valuation, it encompasses every financial aspect of a token attached to a project and every effort of the project which affects the value of the token.
With the pitfalls of the barter system over-shadowing its advantages, concerned governments sort better ways to exchange and ease the burden associated with the barter system. This gave birth to our present-day idea of Tokenization. Introducing many solid materials as a store of value, and finally issuing Currencies as a store of value, these governments not only tokenized the market and the commodities traded, they tokenized the country/community as a whole.
Tokenomics in cryptocurrency
Blockchain technology has gained numerous applications. As a versatile technology, it supports several use cases depending on how it is been developed and the applications built upon it. For some of these applications, it is used plainly as a blockchain.
However, for most blockchain projects, cryptographically generated tokens are created to allow their users to perform some activities on the blockchain. Such blockchain projects are said to be Tokenized. cryptographic tokens assume the role of a token in its real sense.
Cryptographic Tokens attached to blockchains are generally known as cryptocurrencies. Apart from enabling users of the blockchain to perform activities on the blockchain, it incentivizes the users and represents both the financial and technological strength of the project. Cryptocurrencies reflect the value of the blockchain project which is attached.
What’s in the economy?
Token generation and distribution
Scarcity breeds value, this is a prominent idea in tokenomics. Cryptocurrencies are not indifferent to this. The rate of generation of blockchain tokens and the distribution scheme affects its reputation and subsequently value. Cryptocurrencies are generated via mining or staking as the case may be. Smart contracts blockchains also allow the creation of separate tokens for applications running on them.
For Proof-of-work blockchains whose tokens are generated by mining, miners are rewarded with tokens for solving puzzles and mining blocks. The number of tokens rewarded per block determines the rate at which the tokens are generated and this also affects the distribution. Blockchain developers introduced the concept of ‘halving’ to reduce the mining rewards over time hence reducing the rate of generation and distribution in order to build value. Projects with pre-mined tokens are often discriminated against as this is already a poor tokenomics practice.
Proof of stake blockchains rewards their users for locking up a certain number of tokens in their wallets or in a staking pool. This is a passive way of generating tokens. The number of tokens rewarded to each staked depends on the number of tokens they have locked up in their wallets or in the pool. Proof of stake blockchains also meets some discrimination as a passively earned token hardly earns enough reputation. Users are more eager to sell off passively earned tokens.
For the above reason, proof of work blockchain tokens usually get valued more than proof of stake blockchain tokens. There may be exceptions to this due to reasons mentioned below.
The functionality of the blockchain and utility of the token
Regardless of the generation and distribution scheme of any cryptocurrency project, the functionality, and utility of the blockchain is paramount. This simply explains why ripple sits third on the market capitalization ranking with over forty (40) billion tokens in circulation. How does the blockchain work? and what use is the blockchain? A good cryptocurrency investor must first ensure that the project answers these questions satisfactorily.
For national currencies, the GDP and financial stability of the nation play major roles in its valuation; for cryptocurrencies, it is the functionality of the blockchain and its use cases. The problems a blockchain solves and the population which adopts it (or will adopt it) is enough to drive the value to the moon or to the mud, regardless of how it is been generated, the amount in circulation, or how it is been distributed.
Developing a good use case for a blockchain project and working towards building a flexible blockchain that achieves this is the master key to a valuable blockchain token. A good generation and distribution scheme adds even more taste to this. A good example is bitcoin which sits first in the capitalization rankings with just over eighteen (18) million tokens in circulation.
Viability and the overall reputation of the project
How active a project is and the reputation of the project, the community or team behind it, affects the value of its tokens notably. The XRP army or the bitcoin maximalists? these are two very popular communities in the crypto space. The role they played/are playing in driving the value of their associated cryptocurrencies rings a bell across the crypto space.
A community standing behind a project and propelling its success has proved to be of value over the years. A good tokenomics practice may include building a great community around a project. However, this cannot be achieved without at least a promise of a potential good utility for the token.
This promise backed up with visible proof of hardwork from the team towards achieving this goal and also sincerity and transparency from the team is the first step towards attracting a good user base. The user base builds the community, and continued dedication and good practices by the team grow this support and solidifies the stance of the community on the project.
Considering a project’s tokenomics as an investor/enthusiast
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The crypto space has a very dynamic atmosphere, with new projects springing up frequently and existing ones striving to gain ground in this very competitive industry. Each project comes in with a new concept and a proposal that aims to solve an issue. Written carefully in their whitepapers are plans and road maps towards achieving this stated goal. Each paragraph comes with a promise and a vision.
Despite these promises and carefully crafted proposals, a higher percentage of new projects fail. Most existing projects are merely struggling to retain their investors, stay in the game and make progress. This is always below the expectations of the investors who are compelled to invest in these projects because of the visions…and promises.
Each project which fails to live up to its promises incurs grave losses on the investors and drums home the importance of careful investigation prior to investment. Taking a deep look at the tokenomics of a cryptocurrency project cannot be over-emphasized.
A project which fails to present a feasible use case and a flexible functionality is a huge gamble. Having a good branding, token generation and distribution scheme may appeal to the shallow view of investors. For a clever investor, a shallow view appeal should be a mere attraction. A closer look at the feasibility of the proposals and the abilities of the project team is paramount to building trust and making careful investments.
You’ve been told to keep throwing in more money on your crashing asset to reduce the average purchase price. Saylor bought over 20k bitcoins at an average price of about $34,000. Considering the difference between the highest and lowest prices he bought them; that’s a long journey and a whole lot of Dollar Cost Averaging (DCA).
Dollar Cost Averaging?
What does that even mean? Well, if you have the habit of buying more of a particular asset even as its price keeps falling down the cliff, then you’re Dollae Cost Averaging, without even knowing the general term for what you are doing. A majority of cryptocurrency investors do this a lot, myself too. A pure show of belief and dedication…or just greed.
Even your favorite Twitter influencer told you at least once to “fill your bags at these prices”. Even as the price goes lower, you still fill ‘those bags’. Dollar Cost Averaging and hoping for better days. Sometimes they come, other times…well, bagholding is also part of the game. If you are an active DeFi participant or a meme token connoisseur, you probably have tons of tokens you might never sell again. You kept buying down the molehill and now there is no way back up the dark pits. It happens.
In a space filled with thousands of projects claiming superiority, it is easy to lure investors with well-crafted promotional pieces. Everything runs down to why you should invest and continue doing that even when it all looks dark, or at least hold on to your investments and not exit the market even when you’re in gains. Influencers use bold words and appear more experienced than the larger majority; sometimes they really are. Other times, they are simply putting out their personal opinions and perceptions. This space still remains the most unpredictable investment option.
The main factors guiding your choices should be your personal convictions through detailed research and experience. External suggestions are only resources to help your research process and shouldn’t form the main basis for your decision.
That being said, Dollar Cost Averaging is a brilliant move…when done right. Getting it right isn’t a mathematical issue too. But consider these…
Before buying more of a crashing asset, questioning the reasons for the loss in value might be important to your decision. Getting greedy when others are fearful is unarguably a good move, but sometimes this could also backfire; in reality, this move is always risky. Taking time to make certain considerations before ‘getting greedy’ increases your chances of averting some disasters. Price may dip badly in cases of irregular acts by the team behind the project you are invested in, this always drives the price nuts and could possibly dip to its last point.
If a crash isn’t due to some extreme reason which affects only the project then there are chances of making a recovery. Pulling a recovery depends on two factors; the project making the right moves and the market reacting positively to its move. Recovery cannot happen without these two factors being met satisfactorily.
Taking a good at the team behind the project and their reaction to the dip is surely an important move to make. How the team is reacting to the drop in the value of their project and how they hope to get out of the ditch. In a situation where the team is already ‘exit scammed’ then this might not be possible. ”Almost impossible” is a better way to put it. Well, ‘impossibility’ is an illusion in space. But if a project team is gone for real, recovery is far-fetched.
Alright, there are chances for recovery; but to what extent? Certainly, if a project is determined to keep working harder after a huge price drop, it is poised to pull back some losses, sometimes the pullback is not relative to the drop. For a project which experienced a 70% price drop, making a 70% gain from their current position still keeps them below their former top level. This indicates the extent to which a project needs to go before a complete recovery. Well, sometimes it is easier to go up from the bottom.
While DCA is plausible and you’ve been advised to invest what you can lose; considering some or all of these also goes a long way to reducing your potential losses…at least.
