Crypto and blockchain is the new magic word for opportunity but there's 3 things every newcomer and vet should keep in mind always.
Crypto coins are valuable ONLY proportional to the public believing 3 things are true.
- The nodes are distributed enough.
- The cryptography is safe ...enough.
- It's accessible and used by others.
They have to have a reason to want it and a way to use it.. these are the precursors to value.
For value to grow it must have room to grow in one of these categories, or it's not currency.. it might be more like a stock have some other redeemable value already committed to each token. But then you must limit yourself by the same considerations of that other value.
For value to crash it just takes 1 failure or risk to be widely accepted. (Quantum hack, 51% attack , exchange bans or regulation, rising fees. Etc )
You must remember,. If one leg falls the value can go to zero while you're at dinner. If your coin of choice doesn't have a track record in all three areas, at best you must consider it a gamble...startups, the market, and the internet are all places where having the best idea does not guarantee survival..and access can disappear in a moment. Buyer Beware.
In future posts I hope to expand on the strengths, risks and trends of specific coins and DAPP technologies in each of these categories.
Like this introduction my goal is to keep each installment concise and easy.
Until then:
- Is it safe?
- Is it secure?
- Is it usable?
Eazz as that