Discovering Hidden Alt-Coin Treasures: A Proven Approach
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Chapter 1: The Landscape of Alt-Coins
As Bitcoin takes a pause, alt-coins are gearing up for their next potential surge. If you're new to the world of cryptocurrency, you've likely encountered names like Cardano, Chainlink, DogeCoin, and perhaps Polkadot. But do you understand the innovations they offer and their levels of decentralization?
When Bitcoin experiences its current correction and potentially dips to around $43,000, expect a shift of funds back to alt-coins. However, it's important to note that while some alt-coins may thrive, others, particularly the speculative ones, may falter during this period.
Consider where you plan to invest your funds. Are you aimlessly scrolling through Twitter in search of obscure names like Unobtanium (UNO), chasing airdrops, or engaging with multi-level marketing schemes? Alternatively, are you prepared to invest in projects led by dedicated teams that prioritize product development over mere hype?
I contend that genuine value in the future will lie in those alt-coins that are poised for maturity and longevity. Back in 2019, I made strategic investments in several alt-coins that yielded substantial returns, employing a method I will soon elucidate. All it took was patience through the prolonged crypto winter.
Are you prepared to adopt a similar mindset?
Investing in alt-coins is akin to discerning fine wine that improves with age, as opposed to a cheap Lambrusco that dazzles but leaves you regretting your decision if you don't sell promptly.
Here are the essential parameters to help your alt-coin portfolio flourish. With time, you'll be rewarded with impressive gains down the line.
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Section 1.1: Understanding Price, Value, and Mining Difficulty
Price serves as a crucial indicator of value. What price are you willing to pay for an asset? Our current economic landscape, where banks seem to create money at will, highlights the importance of a fixed market cap in establishing a new form of currency.
To avoid past mistakes, new cryptocurrencies must feature a capped supply, ensuring that only a limited number of tokens are minted. This mining, farming, or minting should be anchored in real utility; otherwise, you're merely replicating a centralized currency pyramid where founders wield the power to inflate the token supply at their discretion.
Scarcity is paramount in a fiat currency system that lacks a solid foundation. Nick Szabo coined the term "Unforgeable Costliness" to describe the scarcity resulting from the difficulty of mining tokens coupled with a maximum cap. According to Szabo, Bitcoin exemplifies unforgeable costliness due to the substantial electricity required to produce new bitcoins, a trait not shared by fiat currencies or alt-coins without a supply cap.
Let's delve deeper into the price-value-mining difficulty relationship by examining compelling research conducted two years ago.
PlanB analyzed five alt-coins to assess their viability as digital stores of value. To their surprise, one alt-coin outperformed Bitcoin: Decred, which features an innovative consensus voting model.
My first hidden gem is Decred (DCR). Remember, this research dates back to March 22, 2019. Decred's price skyrocketed from approximately $19 on that date to its all-time high of $180 on March 14, 2021—a staggering 947% increase.
Section 1.2: Team Dynamics, Decentralization, and Core Values
I was part of a team involved in a decentralized storage project. We aspired to transition from traditional hierarchical models to circular structures that empower individuals to take responsibility. While our project remains relatively low-profile, it is operational.
Looking at the broader picture, humanity seems further than ever from a world characterized by innovative, decentralized economic models for exchanging goods, services, and value.
When exploring alt-coin projects for hidden gems, consider these questions: Is the team united in their vision?
Assess the strength of the team behind the project—it’s a vital criterion. Are they still clinging to outdated pyramid structures, potentially with a single founder at the helm? For instance, Tron’s price heavily relies on founder Justin Sun's public perception.
That said, strong leadership can indeed foster value. For example, Ethereum’s Vitalik Buterin inspires countless young developers to contribute to a better world and create applications on the WEB3 network.
What are the project’s core values and mission? A dedicated team that prioritizes product development over marketing efforts is a promising sign. This philosophy is why I believe in the potential of the startup I worked for—it always prioritizes the product.
ThreeFold (TFT #1027) represents the decentralized internet of the future and is my most closely guarded secret gem. Its price recently surged by 20% while Bitcoin declined.
ThreeFold has consciously chosen the Stellar Blockchain, exemplifying a non-profit organization inspired by Thiel's vision to "Make Money Better." Their commitment to empowering individuals is clearly articulated on their foundation's website.
Another noteworthy team is Zilliqa’s, which emphasizes teamwork. Based in Singapore and London, Zilliqa has introduced sharding and hosts numerous young developers. They actively engage on social media and seek feedback for improvement, showcasing transparency and a strong work ethic.
My next two hidden gems are Zilliqa (ZIL #53) and Stellar (XLM #14).
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Final Thoughts on Investing in the Future
When evaluating projects, focus on the product. If you sift through the initial 2018 crypto ICO frenzy and navigate the multitude of failed scams, you’ll find CoinMarketCap.com.
Be honest: do you merely skim CoinMarketCap, check the top 10 cryptocurrencies, chase free airdrops, or engage with CryptoTwitter and YouTube in hopes of striking it rich with alt-coins?
That's perfectly fine, and luck might have favored you if you timed your entry well.
Instead, consider supporting a cohesive open-source team that resonates with your values and offers tangible utility. This is why I invested in BAT, Stellar, Decred, and Zilliqa—because they represent a stake in future-oriented products that I can actively use, like the Brave browser.
I must touch on the current NFT craze. While there is potential for hidden gems within this space, it remains largely speculative. The NFT market is gaining traction and some insiders predict it will eclipse the physical art market.
Justin Sun has adopted the TRON blockchain for NFTs, capitalizing on the success of unique digital tokens in gaming. The initial hype surrounding Cryptokitties marked the beginning of this trend—creating and owning a unique virtual kitty validated by a token.
I also see promise in fusion projects like Aavegotchi, which combines DeFi services with elements of the Tamagotchi toy. DeFi is not a fleeting trend; it is set to expand.
My last hidden gem is Aavegotchi (GHST #459). Each of these sectors faces challenges in delivering authentic innovation, and numerous projects are diligently working toward this goal. By applying the parameters outlined above, you can develop a checklist to identify projects gaining traction.
In conclusion, the digital information revolution took about two decades, and we shouldn't expect the monetary revolution to fully manifest within five years. Considerable infrastructure must be established to replace outdated systems, such as edge data storage, which may take decades.
Blockchain technology is paving the way for genuine disruptive innovation across various sectors of our lives, and it’s likely that even smarter solutions will emerge.
We must allow the industry some room for errors, as decentralization will prevent new pyramid schemes from dominating the landscape.
The future will emphasize cooperation, accountability, and a redistribution of wealth, gradually bridging the gap created by the previous system.
The intense rivalry among various coins and projects will not aid this evolution. We are all integral to this monumental shift, and what we need most are vision, conviction, and patience.
Your optimal alt-coin investment choice? Channel your resources into the future you believe in, armed with the insights, tools, and advice presented here.
Lucien Lecarme
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Disclaimer: This is not financial advice. Crypto is my passion, and I encourage you to conduct your own research.