Weiss Ratings, an independent rating agency of financial institutions, today released grades for many of the top cryptocurrencies on the market. They claim their ratings are based on several factors including price risk/reward, blockchain technology, security and real world applications and potential.
This was a highly anticipated report as it's the first of it's kind for the crypto industry. After some alleged website hacks, and confusion Weiss eventually released the report and at first glance, I have to question the legitimacy of their analysis. It seems to me they've misjudged several of these currencies. An example of this is Dogecoin... They gave Dogecoin a 'C' rating which suggests a 'hold' position. Doge was created as a joke coin, and is a platform that hasn't been worked on in 2 years. The founder of Doge was interviewed recently and expressed his shock at the raise of the Doge coin; so for it to get a 'C' grade, makes me question their ability to review the market properly. My concerns continued as I read through the report. Here's a look at their ratings, with the top two coins getting 'B' grades (Ethereum and EOS).
Although I do believe in the potential of their top two coins, I wouldn't put a lot of weight on their rating system. Regardless, it was interesting to see this type of review, and I expect more reports will surface throughout the year ahead.
I threw up a quick poll on Twitter to get a general impression of what the twitterverse thought about the Weiss Report - Valuable or Garbage. After only a few minutes and 200+ votes, the results seem overwhelmingly one sided 72% Garbage, 28% Valuable. Let me know your thoughts and opions in the comment section below!
In my previous post I laid out my personal thoughts on the cryopto currency market and what we can expect for the year ahead, including some extreme volatility. Less than a month into 2018 and volatility is already rearing it's head, as we saw a significant downturn in pricing last week, seeing many coins lose 40,50,60+ percent. Most of them quickly bounced back and are now stabilizing again, for hopefully another push upwards; although that remains to be seen. Regardless of which direction the immediate future takes us, I believe these types of swings will continue to present themselves throughout the year ahead.
I've allocated a certain amount of funds to invest in this industry and have broken it down into three categories:
- blockchain stocks that trade on the stock market
- crypto currency coins purchased on the open market via crypto exchanges
- mining rigs for producing coins and supporting the blockchain infrastructure. Blockchain Stocks
It's no surprise that companies are coming out of the woodwork release press statements attaching themselves to cryptocurrenies and blockchain in general. I'd offer words of caution when reading these announcements, as many of them tend to be a lot of smoke and mirrors, discussing the huge potential of blockchain tech, but fail to provide significant information about how their company is using it as a revenue generator. Just because a company implements or gets involved with blockchain tech, doesn't mean their revenue is going to skyrocket. Do your own due diligence.
Similar to the .com boom and bust, many companies announcing internet associations took off simply because of the hype and band wagon investors. Companies like Pet.com went to ridiculous highs, and then rode the rollercoaster right back down. At the end of the day, we want to be left holding the 'Googles' of the industry, not the 'pet.coms'.
In terms of publicaly traded companies, I've identified only one, that I believe to be tried, tested and true within the crypto/blockchain industry, and that is HIVE Blockchain Technologies. HIVE sets up and manages crypto mining farms at strategic locations around the world, including Iceland and Sweden, where cooler temperatures are ideal for mining as well as energy costs are low. Furthermore, Hive has several facilities up and running, and as such has established a track record and a roadmap for an expandable business model. What further strengthens HIVEs long term model, is the back-end proprietary technology they've developed for managing a crypto mining farm. Without going into too much detail, this is a huge stumbling block for new companies expecting to launch a competing business. HIVEs backend software manages equipment, monitors performance, temperature levels, equipment technicalities and more.
One of HIVEs biggest partners (and investors) is Genesis Mining, the worlds largest crypto hashpower producer. Genesis is working along side HIVE in the growth and development of more facilities and in advancing the mining technology. Here's an interesting video introduction to the Genesis and HIVE solution:
I believe HIVE has a solid foundation and has already worked through the growing pains involved with the expansion of large scale tech companies. I love their structure as well as the future potential. As their farms continue to open and expand, we'll start to see the related revenues included in financial quarterly reports.
Crypto Currency Coins
I've spent a lot of time reviewing dozens of coins along with their technology, infrastructure, management team, partnerships etc. Admitedly, it's an overwhelming amount of information to review, and it's tough to stay on top of it all as there are so many new coins hitting the market on a daily basis. As I mentioned above, my goal in review coins is not just to find a coin with a clever application, but to find the ones that will be the foundation of the future of blockchain technology. In my (amateur) opinion, I strongly believe Ethereum is the most sound technologically and offers the largest potential to emerge as the industry leader.
From the research I've done, if I had to select one coin to back, it would be Ethereum. They are proving to be the foundation of the industry. With the use of their technology and 'smart contracts' Ethereum can be implemented into many transaction based industries, including the recent announcement from the Canadian Government to conduct a trial project based around the implementation of the Ethereum platform. Many of the new crypto coins hitting the market are actually based on the Ethereum network, meaning their transactions on the back end go through the Ethereum blockchain. It is these types of scenarios that makes me believe that Ethereum is currently and will continue to be a trend setter in the industry; providing the blockchain building blocks for companies to use.
All that said, there are many other crypto currencies worth reviewing and evaluating. Too many for me to get into in this post, but some to consider are: Ripple - Stellar - IOTA - Bitcoin - NEO - STEEM - DASH - Monero - EOS - Bitshares
Mining Rigs
Rigs are the lifeblood of the blockchain technology. Not only do rigs generate crypto currency for their efforts, but they are responsible for processing all transactions put there all cryto networks. I believe this to be one of the most commonly misunderstood pieces of the industry. Rigs earn their income by processing transaction. Every transaction processed through a network has an associated transaction fee attached. By solving these equations, that is how rigs are rewarded. Without rigs, the blockchain doesn't exist.
As such, with this type of investment, you're not strictly tied the price of coins. Regardless of the raise and fall of currency pricing, your rig will continue to produce coins. So, if you believe in the longevity of the industry, this is (in my opinion) the best option.
There are several methods for mining various coins, which I'm not going to get into in this post. As I mentioned above, my primary interest is the Ethereum network and as such I'm most interested in supporting that platform. This will change however in the coming months as Ethereum changes away from Proof of Work over to a Proof of Stake algorithm. When this happens, I'll have to look at an alternative coin to mine.
If you don't want to have a rig in your own house, you can alternatively look at cloud based mining, where you can lease mining equipment from large scale operations such as Genesis Mining. As always, my recommendation is to do your own due diligence, as there are many companies popping up claiming to operate mining farms, with little proof of their operations. At this time, Genesis Mining is the only one I'm prepared to recommend.
Conclusion
So this in a nutshell is my approach to the crypto industry for the year ahead, including a combination of my own mining rigs as well as investments into blockchain industry leaders on the stock market (HIVE) and the accumulation of various coins. As I've mentioned, always do your own due diligence when determining what opportunities are best for you. This is an extremely volatile industry, and you've got to be prepared to ride the rollercoaster both up and down.
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Tuesday, January 9, 2018
2017 was a year of explosive growth for the cryptocurrency industry, with Bitcoin leading the charge. We saw various currencies reaping over 1000% returns gaining the attention of the media and the general public. Now, the big question is, what will happen to this industry throughout the year ahead.
As more people start to wrap their heads around the industry in general, in the early part of 2018, I think we will continue to see the rise of cryto currency, including the mainstream coins (bitcoin, ethereum) as well as the various smaller 'alt coins' (reddcoin, dogecoin etc). As the worlds population continues to flood into the market, I believe this will create an extremely volatile scenario. Crypto prices are very subjective in the first place, but add on the fear and greed from the general public and it could be the recipe for a steep rise and fall for prices.
Although I am a huge believer in cryptocurrency and believe that it is here to stay, I can't say that it won't be without significant price volatility. As this continues to be a trending topic gaining more media attention, the general public will continue to dive in head first. Just like the stock market, more and more, pricing of cryptocurrency will be driven by human emotions such as fear and greed.
Because of the popularity, we're seeing new coins (ICOs) flooding the market all claiming to have huge potential and real world application. My belief is that may of these coins will vanish as quickly as they showed up.
Is Crypto Industry in a Bubble?
People often refer to cryptocurrency as being in a bubble, similar to the '.com' boom and bust. and I tend to agree. Although there is a revolutionary technology at play, the craze of the masses are inflating prices, and people are putting money into smaller 'penny stock' companies without doing the proper due-diligence. This mentality is driving prices way higher than is technically justifiable. Wit that said, out of the '.com' fiasco, some of today's biggest companies emerged including Google, Apple, Microsoft and Amazon. I believe the same will happen as we come out the other side of this cryptocurrency craze. Companies like Bitcoin, Ethereum, Ripple as well as others who solidify their place in the market will establish themselves as some of the biggest companies in the world.
There's a reason why Bitcoin and Ethereum are the leaders in this space, and I believe they are setting the foundation for the future of the industry. The more I read and learn, the more I'm growing to love the Ethereum network, their technology, and what it is capable of achieving. As it turns out, many of the smaller coins hitting the market are based on the Ethereum platform using what are called Ethereum 'smart contracts'.
Throughout the year ahead, I look forward to continuing to grow my position in various cryptocurrencies. Placing the bulk of my investment into a select few currencies I believe have long term potential to withstand a potential crash. I'll also continue to evaluate some of the new, smaller coins in hopes of finding some diamonds in the ruff, and through a bit of money into them in hops of short term gains.
This is my two cents, and I'm excited to see how things unfold throughout the year ahead. Good luck to all!
One of my goals for 2018 is to build my personal network. Although I'm extremely active online, it often takes place behind the scenes of various brands and companies, creating content, managing social media etc. As much as I love that, I'd like to take some time to share some of my experiences, which will include sharing information on my various passions, branding, technology, drones, cryptocurrency and blockchain technology. I've been fascinated and involved in these industries for a long time and I'm excited to share my thoughts and experiences with the www.
Through this website I look to share my insight into various topics introductory information as well as more specific information about the technology, specific coins, trading platforms, available wallets and more.
If you have any questions/comments/suggestions, please feel free to post in the appropriate comment section below any post.
