A look at three cryptocurrencies that show tons of promise.
June 2017 has been a wild month for cryptocurrency. First, Bancor set the industry record for the largest-ever ICO at just over $150 million. A week later, Status.im (SNT) raised $275 million in under 3 hours during its ICO, contributing to an Ethereum “flash crash.”
And those are just two examples among many. Amid all the hullabaloo, it might feel hard to figure out which cryptocurrencies are worth investing in. So I sat down with Lucas Hendren, CTO of SimplyVital Health, to discuss the most promising cryptocurrencies to watch in July.
Without a doubt, the name that’s hot on every crypto-enthusiast’s lips this month is Tezos, “a new decentralized blockchain that governs itself by establishing a true digital commonwealth.” With its ICO occurring July 1 (yep, that’s tomorrow), the buzz of speculation is inescapable. Jeremy Epstein of Never Stop Marketing recently heralded its ICO as the “Netscape of the blockchain”—in other words, the ICO that inflates the blockchain bubble by capturing the attention of the broader public. Naysayers point out that, while the ethos of Tezos is sound, it won’t be able to hit critical mass in the face of a stronger and more established competitor. Proponents cite its robust security, capability to scale, and emphasis on true decentralization as natural next steps in the evolution of the ideas laid out (and arguably, confirmed) by Ethereum.
“Tezos could theoretically have all the abilities of Ethereum—but in addition, it’s switching straight to proof-of-stake,” said Hendren. “The idea behind proof-of-stake is that it’s much less energy and time intensive, which would lead to faster transactions at a lower cost.”
By launching the system with a proof-of-stake model from the onset, Tezos could sidestep some of the growing pains that have faced Ethereum. Furthermore, the governance system Tezos has built into its system gives it the capability to grow over time.
“Tezos allows for a much easier way to upgrade and manage the system and insure that it has constant upgrades,” said Hendren. “If you’ve been following Bitcoin and Ethereum, a big problem they’ve been having is how they go about upgrading. With Tezos, if you join part of that system, there’ll be a periodic vote to determine if they’re going to upgrade the system, and if so, what they’re going to upgrade it to—this is a massive simplification of it—but if a certain quorum is met and a vote passes, the entire system upgrades.”
As to the “Tezos vs Ethereum” argument, Hendren expressed confidence in both, citing Tezos’s upgrade-ability as a cause for genuine excitement.
“Long-term it very well might be a competitor with Ethereum, but at the moment the space is so large and empty that there’s room for both of them to grow,” said Hendren. “The main reason to be excited about it is that they’ve potentially solved the problem of upgrading that many of the other blockchain networks have had.”
Golem purports to be the “new way the Internet will work,” and when you start to look under the hood, you realize how and why they can make such a bold claim. (And if you’ve kept up with the latest season of Silicon Valley, it’ll sound eerily familiar).
“The whole idea behind GNT is it allows you to sell your processing power,” said Hendren. “That basically means that you as an individual—if you have, say, any laptop that you aren’t using—you can sell your laptop as a server and make money from it. So you end up with this massive distributed computing network; it basically turns into the world’s largest supercomputer in a decentralized format. I think that is a very powerful idea that has a lot of potential.”
GNT has already ICOed, but will entering its Alpha in very short time (very likely this month)—and that Alpha is aiming to make high-intensity computing tasks like animation and CGI rendering much easier and cheaper.
“Their Alpha will allow you to do CGI rendering and other animation rendering on their Golem network, potentially at a much cheaper cost than normal,” said Hendren. “And that’s going to be released very soon—making it something to watch right now. There’s a very high chance that GNT could gain a lot of value.”
MaidSafe (MAID)
On the flipside of the computing equation, MaidSafe offers users the chance to sell their computer’s storage on the network.
“MaidSafe allows you to safely secure your assets on a distributed network and distributed applications,” said Hendren. “So it’s similar to Golem but it’s more set up for data storage than it is for processing, and that is also a very useful, powerful idea.”
The idea here is that there’s tons of storage going to waste right now, and MaidSafe lets users “sell” this storage the same way one might rent out their apartment on Airbnb.
“If you have a laptop, you can sell your storage space on this network,” said Hendren. “This is a simplified version, but: I have a laptop in my room I’m not using at the moment—I could load my computer up to this network and store data for other people for money.”
For hopeful investors, Hendren explained that the next month will be the best time to “get in early” before MaidSafe enters its Alpha.
“One big reason to watch it is that they’re releasing their Alpha on August 12,” said Hendren. “Whenever I advise tokens I usually advise you to go read the white paper and do your own research—but if you want to get in early for this one, you have til August 12 to get in.”
By letting users store encrypted data in a distributed format, MaidSafe effectively offers user privacy and autonomy in a way no current cloud storage solution does.
Hendren also advised newcomers to these markets to adopt two strategies when it comes to investing.
“The main thing right now for everyone in there: in my opinion, you should try to avoid technical analyses,” said Hendren. “If you buy into something, you should plan on either holding for a long time or selling it at a certain point you’ve already planned out.”
Why? Hendren references last week’s flash-crash as one example.
“The reason for that is because this market is so young and immature, which is also some of the reason you can get great returns,” said Hendren. “There a few fish that have a massive amount of these currencies just waiting to sell that can basically move the market singlehandedly in any direction they want to. Any single event could have a massive influence on these things. My advice is not to be emotional, to buy in, sell out, buy in, and sell out again. Otherwise there are large sharks out there that will destroy you.”