Bitcoin has been all over the news lately, and with all the hype it can be easy to forget about some of the more fringe cryptocurrencies. The following is a discussion with four investors about their favorite cryptos.
What are your favorite cryptocurrencies at the moment?
Elton Brauer: Waltonchain, NEO, OmiseGO, Request Network, Ark
Jacob Bushmaker: Litecoin, Qtum, Metal, Lisk
Colin Adams: Lisk, Stellar Lumens (XLM), Litecoin, Monero
Jorn Van Zwanenburg: Lisk, Waves, OmiseGO, Iota, Substratum, Voxels
What made you choose them initially?
Elton: Hard to retrace back to the first purchase, since I have been in and out of various coins. The initial reasons for choosing them were related to strong fundamentals – specifically, I was looking at the team, feasibility of the idea, practicality and use-cases in the real world, investor servicing, community, professionalism, partnerships, etc.
Jacob: Litecoin was probably the first cryptocurrency I bought, though admittedly that was only about six months ago. Though I’ve bought others since then, these four seem to be the ones which I keep going back to and investing more in. For the most part what draws me to them are their technical improvements over their competitors, the potential reach/impact of the coin and the vision of the leadership team.
Colin: Each token obviously has a slightly different appeal, so I try to focus on fundamentals and take a holistic view of each coin. A few specifics: I like Litecoin’s simplified mining process and speed. I like the enormous potential represented by Lisk’s SDK. I like Monero’s extensive privacy features (ring signatures, stealth addresses, etc). And lastly, I like the implied altruism in the Stellar Lumen (XLM) mandate.
Jorn: I’ve been following cryptocurrency market developments and dabbled in investing for a long time. By July of 2017, I had enough confidence that the bear market was gone, and I was ready to invest more seriously. I had been doing research for about three months prior to this date, and I came to the conclusions that a coin has to have the following characteristics before I invest in it:
- Blockchain technology is the most appropriate technology to solve the problem a coin is made for
- Potential network effect (the more people use it, the more people will start using it)
- Solving a real world problem
What potential do you see in them? Is there anything interesting about the company?
Elton: Out of those coins, I see most potential in Waltonchain due to the range of applications its technology has. I strongly believe it is set out to change the way we collect and use data, operate businesses, make use of smart contracts, and overall change the way the economy works (and all of this while maintaining decentralization and trust). The most interesting aspect about their ecosystem is probably the capability of real-world data collection with their RFID technology and blockchain integration, which is set to disrupt most industries if they ever reach mass penetration. It is also interesting how they are consistently able to grab innovation and technology rewards alongside giant companies like Sony, Huawei, China Telecom, etc.
Jacob: Each coin has huge potential. Litecoin has many technological advantages over Bitcoin, which leaves it in an interesting position to eat away some of Bitcoin’s fame. Qtum and Lisk both have great teams and potential reach in the smart-contract space; at the same time, they’re going about it in different ways, so I don’t think the success of one will necessarily ruin the success of the other. What I like about Metal is how they are focusing on the recreational marijuana industry. Growing up around Seattle and living only a few blocks from Uncle Ike’s (Seattle’s most popular marijuana store) near Capitol Hill has shown me just a piece of how popular this industry is and will become.
Colin: I’m a big fan of Lisk. While Monero, XLM, and Litecoin have many pluses, I’ll just focus on LSK for a moment. I think the promise inherent in Lisk is tremendous and two-fold: infinite scalability and a blockchain that helps anyone create other blockchains with the intention of bringing ease of use to the masses. Lisk is also building a toolkit that will be usable in one of the most popular programming languages, Javascript. Once this is released, serious growth of the Lisk ecosystem should finally be realized, and I think Lisk can then become a real leader in smart contracts. The Lisk team (and community) are solid, and their head-on approach to fundamental blockchain problems is something to get excited about. Further reading: The Lisk Platform Explained.
Jorn: Currently, I see the most growth potential in Substratum. This is because Substratum is trying to create a decentralized, censorship-free internet. Net neutrality is their core focus, and with net neutrality recently being thrown out the window in the United States, Substratum’s timing couldn’t be better. Their Alpha test was successful, they’ve been doing a great Christmas marketing stunt, and they’re building momentum. This is one of the blockchain projects I’m eagerly waiting for to use myself. Another largely unknown coin I’m super excited about is Voxels. The company is focusing on Virtual Reality, and their cryptocurrency will be used for in game purchases, wagers, and many more VR features. They’re diversifying as well, focusing on educational VR software, corporate training VR software, and ‘The Hunt,’ a battle royale, free-for-all type of game. The average budget to create a VR game is around $250,000, and with the current value of Voxels, the company has an enormous competitive advantage in terms of budget.
Do you see it as a good investment for beginners?
Elton: I guess it depends on whether the investor is there to make a quick buck or truly support a world-changing technology. For instance, I believe Waltonchain integration will take some time, but the patience will probably be massively rewarded when they are able to deliver even some of what they set out to do. Therefore, if the investor is interested in backing something revolutionary, I definitely think Waltonchain is a good start. However, it might be quite difficult to fully understand the scope and technicality of their ambitions.
Jacob: I think you can’t go wrong with Litecoin. It’s probably also one of the easiest alts to get started with because you can buy it pretty much on every exchange. As Bitcoin’s popularity rises, so will Litecoin’s. I also think (or hope) that once cryptocurrencies become more accepted worldwide, Litecoin will become common for daily transactions due to some of its technical improvements.
Colin: As a blanket statement, many people tell beginners to buy Bitcoin, Litecoin, and Ethereum, and I don’t necessarily disagree. Of the coins I’ve mentioned, Litecoin is definitely the most approachable and easiest to buy. For the slightly more ambitious investor, Lisk, XLM, and Monero are all good bets, in my humble opinion.
Jorn: Absolutely, because I’m convinced blockchain and cryptocurrencies will be socially integrated on a large scale in the not-so-far-away future. If you start investing, your heart will be more into it and you’ll start doing research, which will lead to a stream of new knowledge on economy, finance, tech, and investing. The world is rapidly changing, and if you want to keep up and play a role in the world of tomorrow, knowledge about these matters is of the utmost importance. Just invest an amount you can afford to lose, do your research, and HODL.
What is the risk?
Elton: The risk, as with any investment, is whether the company will be able to deliver what they set out to do. Aside from that, there are some concerns that need to be addressed before mass adoption, which you can read about in the article I wrote: Waltonchain: An Interconnection Between the Physical and Virtual Ecosystems.
Jacob: With every cryptocurrency out there there is substantial risk, so don’t let anyone tell you otherwise. There is and always will be the risk of exchanges getting hacked, technical problems, regulations, new coins beating out yours, or just the risk that maybe cryptos won’t catch on like we all hope. I don’t think that will happen, but nothing’s for certain. Be smart.
Colin: Investing in crypto comes with all kinds of risks. Beyond the simple challenge of maintaining custody of your coins, the entire alt market is volatile and highly unpredictable. In the end, a lot more coins will likely go bust than to the moon. If you consider the early days of the internet, many of the first companies/technologies through the door were not the ones that ultimately became household names. Herein lies the primary risk – so be cautious and don’t overextend yourself.
Jorn: You could lose most of your money. The biggest risk right now are regulations by the EU and the US government. If they decide to outright ban cryptocurrencies, we’ll see a dotcom-worthy crash or even beyond that. You could pick the wrong coins, which simply don’t deliver on their promises or are outcompeted and become worthless. And blockchain and cryptocurrencies could be outcompeted as a whole by a new technology, like IOTA’s Tangle. Or Satoshi Nakamoto could be Donald Trump.
Do you see this as a long-term investment, or more short term?
Elton: Definitely long-term – however, we should see a lot of traction already in 2018.
Jacob: For all of my investments, I take the long-term approach. I try to buy good coins with strong teams and a lot of potential. Then I attempt to not worry about the price.
Colin: A long-term approach without question. After due diligence is complete, if things feel right I buy in with a plan to hold for an extended period of time.
Jorn: Short-term for gains on altcoins, then I take profits in the form of Bitcoin and hold Bitcoin forever.
What is the riskiest project you’re invested in?
Elton: To be honest, probably Waltonchain, and that is because I invested in it when there was a lot of uncertainty and “scam” rumours out there. It was also in the middle of China banning cryptocurrencies, so definitely a judgement call there. It did, however, turn out to be my least risky investment over time once I received confirmations to all my judgement calls, and definitely one of the most fundamentally sound projects in the cryptosphere currently.
Jacob: Probably some of the more risky projects I’ve invested in are Ubiq, Salt, and BAT. They all have a lot of potential, but have a long way to go. Ubiq has some very stiff competition to overcome, most notably Ethereum, which is just miles ahead right now. Salt and BAT, on the other hand, don’t have a lot of competition in the cryptocurrency world, but are going after huge, well-established worlds of digital marketing and loan financing, which have a lot of corporate power and vested interest in making sure no one challenges them. The team is there, the ideas are good, but whether or not they can pull it off remains to be seen.
Colin: I’m actually pretty risk-averse when it comes down to it. That said, I’ve been thinking about taking a punt on Maidsafecoins. Maidsafe is a sleeping giant, and if the team can ever deliver on their vision of a decentralized internet, the current price of Maidsafecoins would be an absolute bargain. With the coming releases of Alpha 3 and 4, there may be price upticks to be capitalized on. But again, this is a long-term hold and I wouldn’t advocate it as anything other than highly speculative.
Jorn: Definitely Voxels – not many people have VR sets yet, and their team is basically some Argentinian guys programming around the dinner table. Because of this high risk, I’ve followed every step of the company through Twitter, Reddit, Youtube, Slack, and their website. With the expansion of their team, an upcoming partnership with a VR hardware company, and a rebranding, Voxels is becoming less and less risky.
And the least risky?
Elton: Refer to last answer.
Jacob: I think Litecoin is the least risky of the ones i’ve mentioned. It’s one of the oldest alts out there, and the most established. And I really believe in Charlie Lee – he’s the man.
Colin: Lisk is relatively low-risk. LSK price has not exploded yet, making initial buy-in amounts affordable, plus there is a strong team, a degree of transparency, and a lot of capital behind Lisk development.
Jorn: Bitcoin.
What upcoming ICOs are you keeping an eye on for 2018?
Elton: None. The cryptocurrency world is already risky enough, so investing in ICOs is a big no-no for me. I just don’t feel like any ICO has provided enough information to make a fully informed decision, which is why I generally just ignore them and wait for the legitimate ones to mature a little before investing.
Jacob: I don’t really mess around with ICOs. I know there are lots of stories of fabulous gains, but for me to do it right it would take a lot more time of researching than I am willing to give. Most of the established altcoins are already risky, so with some ICOs you might as well be playing the lottery.
Colin: I must admit I’ve been tempted to jump into a few recent ICOS, but ultimately I decided not to. A good rule of thumb is to invest in real innovation and potential (or ideally existing) use-cases, not a token piggybacking on something else. Unfortunately, most ICOs don’t cut it in this sense. If I did invest in an ICO, at a minimum, I would be very methodical about it and do tons of research.
Jorn: I see a pattern here, but I’m not really investing in ICOs either. The only one I’ve invested in so far was Cobinhood, and it took a lot of convincing. Cobinhood has been doing quite well, and this is tempting me to invest in more ICOs, but I’d have to do an excessive amount of research first. As soon as there is an ICO that combines 3D printing and blockchain, I’m in, though.
