Cryptocurrency markets are no doubt the most volatile of all. Partly because Bitcoin and other cryptocurrencies, as well as tokens based on “smart-contracts”, have amassed a flood of amateur wealth-seekers into the financial markets. Overnight millionaire stories have become more common. But within this fledgling niche, it is not so unusual to hear about epic failures too.
The potential of Cryptos
The DLT(Distributed Ledger Technology) is the sort of breakthrough that would change the world. The concept of “Blockchain” revolves around core principles of DLT. Let’s not get into technicals too much. In a world where the governments are corrupt and people have to bear the burden for the false doings of banks; techs such as DLT could be our only hope for a stable future. So be assured, change is coming!
It is no secret that fiat currencies are doomed because the central banks have been and continue to create money at will, out of thin air. The only alternatives that do not involve an intermediate entity such as central banks to govern their ecosystems are cryptocurrencies.
With only around 466 billion market cap (at the time of writing) and with the whole world eagerly awaiting these solutions (both knowingly and unknowingly), the growth potential of Cryptocurrencies as a sector is incomprehensible.
The evolution of Cryptosphere
For a long time, I thought Bitcoin was the ultimate solution and there was no room for improvements, innovations or evolution. I was wrong!
While Bitcoin successfully solved some of the inherent problems of fiat currencies, there are still some major issues, such as transaction-speed. Hence, Bitcoin is now considered as a store of value rather than a currency for day-to-day transactions. However, there are many other projects that have been put forward that claim to solve these issues.
Blockchains like Ripple and Dash are aiming to solve many intricacies of Bitcoin. Then there are the likes of Ethereum and Neo that go beyond the scope of a currency and serve as platforms to create and manage tokens based on smart-contracts.
Since the inception of Bitcoin, the core principles behind it has been put to good use by many projects across a variety of industries. According to Etherscan, there are 44011 (at the time of writing) Ethereum ERC20 token contracts. I know, the quantity does not mean anything. But assuming a tiny percentage of them (e.g. 0.25 = 110 approx.) go onto disrupting the industries and markets they represent, a few years from now, how much of an influence would cryptocurrencies have in our lives?
There are cryptocurrencies targeting almost every industry that you can imagine. They are all competing for mass adoption, but not necessarily against each other. Some of the popular projects have massive communities built around them.
So it is obvious that there are many useful real-life applications of the DLT and Blockchain technology. Although many coins and tokens are trying to implement these technologies in various industries and sectors, none of them have been able to achieve mass-adoption yet. At the current rate of growth, it might not be so long before a healthy percentage of people start using some of the coins and tokens for “normal transactions” (actual transactions pertaining to the relevant use-case of the coin or token), on a regular basis.
Cryptosphere is still in its infancy. Currently, there is a lot of speculation affecting the price and volatility in the market. Besides, most of the projects (blockchains, platforms, and tokens) are either in conceptual and/or beta stage. Very few have a tested and working technology in its’ alpha version.
Considering all things, a long-term based minimal investment is my preferred plan of action. I have witnessed the total market-cap fluctuate approx. 30 billion USD, in and out of the market in a matter of a couple of hours. That tells me that there are some big fish manipulating the markets very heavily. So day trading is definitely a NO for me.