Which Crypto will ultimately win the horse race?

Every day that goes by, there are new and promising crypto assets and a lot of shitcoins as well.  Discerning which ones to put your valuable fiat into is no easy gambit.  The trick in my opinion is to look what makes them truly valuable and then rate/rank them.

The main issue is what is your time horizon?  Since I’m a long term thinker and not a gambler I’m going to discuss what will provide value over a long time horizon.   I’m putting my money into cryptos that have the following qualities:

  • Deep Market:  Need to be able to easily buy and sell.  Regardless of how quickly a coin goes up, if you cannot sell due to lack of volume, you don’t really have all the profits.
  • Hashing power:  If you  don’t have large computation security, then you will eventually get hacked
  • Development:  Does your crypto have a dedicated group of individuals who are passionate about the project?
  • Decentralization:  If your coin can be hijacked by malicious power bases then it’s not truly safe
  • Fungability:   If all coins are not equal, then you could get a “dirty” coin and not be able to spend it

Of the qualities above, I believe decentralization is most important, because without it you will always have group trying to control it.  Once a coin/crypto is controlled then it’s only as strong as that group.  When a government wants to know who owns what coin or wishes to shut it down, there is an easy attack vector.  Find the controllers and apply pressure/wealth/fame/torture until it gets them to do as the government wishes.

Next, it has to be fungable.  If all coins are not treated the same then the system falls apart and people will leave for value, anonymity and security.  If you’ve been paying attention, you can see the struggle that bitcoin is currently having.  There are groups all fighting to control its future.  If BTC can shrug it off and continue to become more decentralized then it may win the race.  If one of the groups becomes dominant, then it will fall in value and stature and the next horse will pass it and win.


Thoughts on why there is a war in the Bitcoin community

War in Bitcoin is due to the fact that everyone is acting in their own self interest, which is what Satoshi intended.  Unfortunately, interests started to veer apart when entrepreneurs started looking for volume to make their businesses succeed.  Due to the network effect, bitcoin has become better used a store of value, it’s why everyone talks about Hodling.

As segwit gets locked in and the layer two protocols become enacted, we will start to see how bitcoin can be used for rapid and low cost payments.  This may be accomplished via the lightning network systems or a sidechain or something totally new.  Time and talent will determine the winner in scaling of bitcoin.  I believe that once we have the layer 2 scaling solution then entrepreneur’s interests will once align with the hodlers, coders and miners and the storm that is called bitcoin will start to clear.