Is Cryptocurrency a bubble and it’s too late to invest?
With the ups and downs of the value of cryptocurrencies, many people are asking if it is only a bubble and the time for investment has now gone.
This answer comes from banking institutions who might feel threatened by the rise of cryptocurrencies and also from the many individuals who might have invested without fully understanding the technology and ultimately lost money.
It is impossible to look at cryptocurrencies without using the investing in Bitcoin as an example. BTC basically dictates how the market reacts as most coins are purchased using BTC. There is also the fact that a high number of investors are unable to see past BTC as an investment opportunity.
Many people forget how new the cryptocurrency market is and BTC is still new itself. When asked is Bitcoin a bubble?
The answer would be no at present as the main part. The second part of the solution would be an investor has to choose the right time to invest.
The reason for this is the high gains that have attracted so much attention might have gone, and newer altcoins are coming to market that is better suited to the correct vision of decentralized currency.
This means that BTC might be a bubble in the future, at which moment in time that will be is anyone’s guess.
What Else is There
BTC is plagued with many flaws and a while back they had a fork where Bitcoin Cash was introduced. This fixed some flaws and made things a little less energy intensive for transactions.
To a certain degree, it is still BTC although a little better. If BTC does have a bubble or loses market share, this coin might quickly follow.
Some alternatives are chomping at BTC’s heals and offer something a little different than merely a payment system. Many other altcoins have looked at the flaws of BTC and tried to fix these while adding some purpose to what they offer.
The first cryptocurrency one should look at is the main competitor of BTC and see what it offers to make sure that it isn’t a part of a cryptocurrency bubble.
When we look at this coin, we have to understand how data is stored on the internet. Personal information, financial information, and passwords are some types of info that are stored on other company’s servers.
These can range from Facebook accounts, Amazon buyer and seller accounts and even Google all retain a part of our digital identity.
In one form or another, many of the companies that store this information charge for the privilege of this cloud storage.
As we have learned, as much as these companies try and secure our data, there are times when they become hacked, so there is always a vulnerability there.
Ethereum has gone a step further than only being a payment system and aims to be a world computer that is decentralized.
The cloud and the company servers are replaced by nodes which are spread around the globe. This levels the playing field for everyone and gives them an equal opportunity to have the same functionality as everyone else.
Apps we currently used are held and curated by any company we connect with and download their software. Users are at the discretion of these companies to maintain these apps or if these large companies become targeted through the net neutrality repeal.
Being a distributed Blockchain network, ETH focuses on running application code (smart contracts) of decentralized applications.
This coin is an RTGS (real-time gross settlement system) which is an integral part of currency exchanges and remittance networks. Their ledger is managed by a network of independent servers which validate transaction records using consensus rather than coin mining.
These servers can be the property of anyone ranging from an end user all the way up to a bank.
Ripple aims to make transactions almost instantaneous between two parties where any currency can be exchanged while avoiding fees and transaction times.
XRP is not a Blockchain as it uses HashTree which summarizes the data to a single value which is then checked across all the validating servers.
Compared to both BTC and ETH, XRP is more efficient and faster in operations per second
This cryptocurrency is touted as being secure, private and untraceable. This is more in line with what a decentralized currency was supposed to be. To do this Monero uses a unique type of cryptography to ensure its transactions remain untraceable and unlinkable.
With XMR comes a couple of unique properties. First up is the fact your currency is yours. You are responsible, and as an aside to this no one can see who is paying you or what you are spending your crypto’s on.
Second is the fact it is “Fungible” this means any coins which are circulated and have been linked to bad dealings retain full value unlike BTC where they become tainted and blacklisted (can reduce their value) in the public ledger. This blacklisting stays with the coin forever due to the nature of the open ledger.
There are persistent questions asked about the scalability of BTC or lack of it. XMR has no block size limit which could lead to miners who have malicious intent to clog up the network. XMR though has built in a block reward penalty.
This automatically prevents blocks that appear too large to have block rewards imposed against them.
There is Still a Problem
When looking at all these crypto’s, there is still one problem they all face. If you delve into the technology further, you might come to a conclusion and think is it too late?
Cryptocurrencies have made their impact yet they are restricted, and with net neutrality, they might be hampered even further.
For a significant number of crypto’s, this will be the case. There are over a 1,000, and none have anywhere near as many benefits of the coins mentioned.
These crypto’s come and go each month and is only created to hop on the back of the cryptocurrency bandwagon.
So far we have only mentioned first and second generation cryptocurrencies. What happens when the third generation are introduced?
So now the second generation is only just making an impact, and they are found to still have flaws or are impacted by the same weakness most other coins are restricted by.
They all run on the current internet infrastructure. Surely being decentralized means, they are free from this? Yes, it does, and no they aren’t, so to a certain extent none of these cryptos are fully decentralized.
What is the Solution?
As was just mentioned, all these coins run on the internet as it is. To get around this and be fully decentralized would take a new form of internet. This is true, and this is where the latest, and what might be the answer to your, what cryptocurrency should I invest in question.
By taking a huge step back and starting again while watching the crypto world SKY has come up with solutions which fix not only the many flaws of BTC but also they have found a way around the centralized aspect of the internet. Throw in the part about not being affected by net neutrality and Skycoin looks pretty amazing.
A coin isn’t able to do this on its own, so the developers (BTC and ETH developers) have created a new network, or to put it in the correct phrase it is a “New Internet.” It follows on from the nodes of ETH and has dedicated nodes which are not a part of the internet.
These nodes (mining rigs) interconnect with each other wirelessly. ISP’s can be bypassed as connections are made directly to the miners and the mesh-network.
This mesh net is entirely peer-to-peer so connections are direct and no data or information has to be held on central servers. Skywire also provides security as data is broken into chunks and routed many different ways which make the network highly secure and fast.
You might wonder how SKY fits into this as a payment system for transactions. Coins require no mining so are instantaneous and are fast enough to be used at store checkouts. Added to this there are no fees.
Payments are made by bandwidth used and passed to the miners for providing this service. The new algorithm and Blockchain which has been developed fixes the problems with BTC. It is scalable as it gets better as the network grows and becomes more secure.
If any malicious nodes are found these are easily disconnected from the system, while not affecting any services.
For a high number of crypto’s, there could be a bubble. Some of this is of their own making, or from their success and it has been forced by investors and the FOMO syndrome. When developers address the problems and the needs of the world and what cryptocurrencies are really about.
There is only one solution. Empty drums make the most noise and the cryptocurrency world there are plenty of them banging around.
A new internet and a new future are in the making. It hasn’t been shouted about, and the developers are letting their actions and their faith in SKY and Skywire to do their talking.