IDENTIFYING CRYPTO INVESTMENTS
When identifying the solutions to problems it is best to start at the root.
What is my goal?
The goal of making an investment should be to get a positive return on the medium of exchange that you value most.
If that is USD then you need to get a better return than inflation and/or any interest rates that you are paying due to borrowing
If that is a cryptoasset or cryptocurrency then that is dependant on the economic model of it.
Ex: I value Bitcoin more than I do the USD because of its ‘decentralized’ network, the size of the network, the growth of the network, the acclaim that it has, the amount of open source development on it, the security that it provides, and the limited supply. So I want my investments to increase in the value of Bitcoin.
Once your personal goal of a base return is found you need to identify the risk that are ok with and then create techniques to reduce it.
How do I determine risk?
Simply put you need to know how much you can afford to lose and how to reduce risk to not lose anything
A way to find how much you can lose is to know how much you make each year and subtract that from expenses. Expenses being, necessities, and cost of the lifestyle that you chose to live. That will give you an Idea of how much you can lose.
If that number is negative, then create larger revenue streams or cut off unnecessary expenses until that number is positive .
If that number is positive then that is amount that you can afford to lose.
Ok great, I have excess funds now! This Bitconnect thing looks promising should I invest?
No, we are not done with risk.
After you know what you can lose, you need to know what you are investing in.
Identify what the use case is, who is building it, what their skills are, who is already supporting them, the magnitude of the project, and the correlation to all of the qualitative features to the industry trying to be seized.
These each have values tied to them and weighted in terms of importance because some become more important than others when it comes to return.
Some can be quite misleading when it comes to return as well.
Ex 1: Project is trying to bring all the moving parts of real estate onto a blockchain and the CEO is a professional race car driver and the development team has no blockchain coding background instead are all professional LoL players. The partnerships are the National Football League, and the Ex-POTUS Bill Clinton is investing.
Ex 2: Project is trying to bring all the moving parts of real estate onto a blockchain and the CEO is a macro economist with a New York Times bestseller on Real Estate investment, a long list of successful real estate investments and the development team has blockchain coding background and worked at NASA, IBM, Intel, and Amazon. The partnerships are the National Real Estate Investors Association and they are invested in by Jeff Bezos
So (Ex 1) has an excellent use case, the builders are very accomplished in their lines of work, they have exceptional computer skills, the NFL is a huge corporation with millions of weekly viewers, Bill Clinton has a name with a lot of acclaim, the magnitude grabs a huge industry with tons of volume and moving parts, But none of the qualitative features line up with the industry being seized.
SO THIS IS VERY HIGH RISK.
While (Ex 2) differs in skill set and correlation to match what is needed to seize target market so the project has LOWER RISK.
I think I get it; now tell me about 0chain.
0CHAIN
0chain is striving to make fast free and flexible blockchain for IoT, enterprise, and decentralized applications.
How they plan to do this is through their various innovative protocols: 0-cost decentralized cloud, self-forking, and 2D Byzantine DPOS.
The goal of the team is to allow for apps to use their blockchain protocol as an added benefit as needed.
An application can be built on any other blockchain and still use 0chain for computing and data storage.
PROS
The flexibility of the protocol decreases the first to market advantage of other chains.
The innovative protocols are truly intrinsic pieces of tech
The team is well experienced and has had some big advisors jump on board; also, many public YT influencers such as OhHeyMatty and Ian Balina have come out in support after viewing their demo.
0chain also has applied for several provisional patents so securing the protocols will ensure for intrinsic value of the chain.
The tokenomics of the project are also very lucrative with only 1% of the total supply being released the day of token distribution. Then the next 180 days the supply will inflate 10% total circulation. After the 10% is in circulation the mining protocol will begin and is designed to to take 100 years to reach the max circulation
Max Supply- 400,000,000
Cons
The main cons that this project has is the grandeur of the project. Meaning if they can actually follow through with that witch they set out to do.
The project is very ambitious and means difficulty of success will be increased.
And could be tough if other chains implement features of 0chain. There are a lot of similarities between it and some other larger chains so a change to a larger chains protocol could be adversarial.
All in all the biggest challenge to face is the getting other projects to place computing and data storage onto their chain.
CONCLUSION
Really think 0chain will be a project that surprises a lot of people.
They have have some obvious challenges with execution but they are doing all the right things.
The way the team has professionally handled menial FUD has really impressed me in such an unprofessional space.
Excited for more news from partnerships coming along soon.
Stream of consciousness’d this out will be improving as writings come out further
NEXT POST
Will be doing a review on Xtrade next
Thanks steemians,
MW