When you look at a new project in the cryptocurrency space for potential investment, there are many factors to consider before you go all in and get a 2nd mortgage on the house (don’t do that).
Does the concept behind the project slap you in the face and make you say “Wow!”. I think the most important giveaway for a great project is the wow factor. The idea needs to strike you with its elegance and its ability to solve a real-world issue or use case. If you look in the top 100 coins on https://coinmarketcap.com/ you will see a lot of “solutions” that literally just pick any industry and throw blockchain at it. Yes, blockchain will play a big part in the future of almost every industry but do we really need a Dentacoin (dentist coin)? https://dentacoin.com/ is this an incredible breakthrough? Probably not.
The White Paper of a project in the crypto space is essentially a document that lists exactly what the project is trying to achieve. These are normally located on the project’s website and explain all the technical details of how they are going to achieve this task, what new solutions they are proposing and sometimes a time frame. A lot of these documents can be overwhelming in technicality and also can be hard to get through in their length and the crypto mumbo jumbo that goes over most peoples head, but you should push through this and if it still interests you enough to go further then look for the community behind the project to explain in lamens terms what was meant. Reading through the Bitcoin whitepaper https://bitcoin.org/bitcoin.pdf you will soon see what I mean by complexity. Even though most people do not understand the technicals, you can still grasp the concept and what it’s trying to solve.
The community plays a big part in the crypto space and shows how many people also see the potential that you have discovered. But beware! this is not always a good sign. This industry is brand new and scams pop up and disappear often, taking the investors money with it. A good example of this is the https://en.wikipedia.org/wiki/Bitconnect Bitconnect scam that took a very large amount of investors money and left a lot of people devastated with financial loss. This is where your spidey senses are needed, is there a lot of talk around the project that is negative? If so, can the negativity be justified? Try and play devil’s advocate here and list all the reasons why this could possibly be a bad choice. After doing your due diligence on the project look to see what the community is like. Is the community welcoming? Do the community managers answer questions with gratitude? These are some of the core questions you need to ask yourself and the community before jumping on board. There are a few main platforms that the crypto projects tend to communicate through including Reddit, Telegram, Slack, and Twitter
The progress of development within the GitHub repository can often be a bit overwhelming for the average investor. This can be summed up with slick websites that show nice little graphs that give you an idea of how active the project is, for example, https://coincheckup.com/analysis/github. This is not always an accurate read on the project, with changes being made that are not necessarily positive changes. This is where the confusion of having a large number of changes to a code base that are hacky and thrown together, compared the elegant coder that makes small changes with far greater influence and advancement. And back to the community is where you can figure out what is being worked on and what has been accomplished. A professional looking website with clear goals and points of interest is a great sign, be careful with projects that use a lot of industry keywords without actually getting to the core of the project and what it’s about, this is usually a good sign there is no fundamental use case.
Is this a good time to get in?
Yes, you may have found the ultimate project that ticks all of the boxes but where is the price per coin/token currently? Looking at websites like https://coinmarketcap.com/can give you a great idea in where the price is currently sitting. Almost every project whether good or bad has a huge spike in price that leads others to buy! buy! buy! But this is rarely sustained and almost certainly has a massive pull back to the original lower price. Avoid buying a token or coin on the FOMO stage which means Fear Of Missing Out, where the coin is pumped really high and then dumped on the last buyers getting into the hype. Maybe the coin has been pumped thousands of percent in price, but waiting to get in at a lower price is normally always in the near future. Do not try to play the market, almost every day trader that tries to buy low and sell high for profit barely breaks even unless they have extensive experience in reading the market fluctuations. Your best bet is to spot a project early that has great potential (and the Wow! factor) and buy as low as possible. Sit on the coin and monitor the progression in the background until the price rises naturally from demand as the real world use case comes to light. If your sitting on an investment that will ruin you if it does not succeed, you’ve broken the number one rule. NEVER INVEST MORE THAN YOU CAN AFFORD TO LOSE! These projects can sometimes take years to accomplish even the most basic functionality of the idea, so patience is key. If you feel like the project is losing steam and development has halted, It can be wise to get out, but that is not something you can draw a line in the sand for.
You are your own bank
There are no reverse transactions or a “Head of Blockchain Department” you can go running to if you make a mistake or get hacked from not being wise about your investment. If you are investing over $500 into the scene then you would be wise to purchase a hardware wallet. These are designed to keep your investment safe and is worth every penny that normally stings you $100. There are a couple of lead companies involved in this space which are LedgerNano and Trezor. They provide a safe environment in keeping your crypto keys safe from attack through some clever mechanisms that prevent you from getting hacked or losing your private keys, which are the secret passcodes to access your coins/tokens. These are great devices and are making the mainstream user more confident in safely using cryptocurrency, but be cautious, these are not idiot proof in terms of the user. Yes, YOU! if you send your Bitcoin payment for your shiny new graphics card to the supplier but accidentally use the wrong address those coins are GONE. You are your own gatekeeper and with great power comes great responsibility. Be wise with your new found technology and investments, double check, even triple check every transaction you make. Run updated virus scanners, keep your computer up to date with software installations, run software like MetaCert to prevent getting phished, do not use public computers and never carry large amounts of crypto on a software wallet like Mycellium that is installed on your phone. If you follow these steps and get used to your new found paranoia, your gonna have a good time.
This is where I say: This is just an educational article and should not be taken as financial advice. Do your own due-diligence.
People do not think twice about money. They want it but they do not understand it, or in most cases wouldn’t care if they did. What is value to you? A $20 dollar bill in your hands? or maybe a gold necklace? When a country is brought to its knees from hyperinflation like Venezuela is right now, who do you point the finger at? People, who work for the Government? maybe… or should you point the finger at the underlying technologies that run the systems currently in place?
The move from gold coins to IOUs written on paper and signed by the first “banks” before they were called banks was a natural transition. New technologies are created in steps and the transformation of paper holding value as an IOU was a logical step from carrying your heavy gold bars around. But when a system has reached its final stages before the complete collapse of a civilizations means to transfer value, a new and better method arises. This is Bitcoin, and for the average joe who does his 9 to 5 and works for the weekend, while following all the rules that are set in place by people who know better, is just a way of life. He could not care less about some nerds internet coins because he has cash in his hands and can spend it anywhere. Yes this is true, Bitcoin is not accepted everywhere but can you imagine going up to someone in the days when shiny rocks like gold and silver were the main form of currency, and saying to the man with three fish for sale “Heres a piece of paper with a scribble on it, you just need to go see Frank over the hill at the bank volt, he will give you the gold bars for the paper” A look of shock and laughter would have followed. Every advancement in the evolution of value and money faces the same criticism. Imagine now if Frank over the hill was now creating more pieces of paper with scribbles on it than he had gold bars to back them up with? Now, how much value does your piece of paper hold? I imagine Frank would end up in a lot of trouble sooner or later… or would he? If everyone came at once to get their gold bars, in exchange for their pieces of paper, he would fall short and a lot of people would be left without any gold bars.
This is literally the system that the world is running on right now. A whole lot of empty promises, in fact, 21 trillion dollars worth is the USA national debt! The government prints more IOUs to pay for more things it can’t afford. This is INSANE! but was an eventuality of giving pieces of paper real-world value. The system would have seemed revolutionary when it was first conceived, but when the bank found out it did not have to have the gold to pay for things with the paper, things got a bit out of hand. This is the classic dig yourself out of a hole trick and you’d think it would be illegal to create wealth out of nothing, well it isn’t when its the government doing so and they legally print more and more money to “spend” where they feel fit.
These issues were created in the evolution of money, but there’s a new technology called Blockchain. It solves the double-spend problem, this is to say that if you give me that IOU piece of paper that represents the gold bars, how do I know you haven’t just created the IOU paper without depositing the gold bars? If I turn up to Franks bank and he says “Unfortunately that’s not one of our legitimate gold backed IOUs OR one of our own fraudulently created IOU’s, so I’m sorry to say it’s worthless”, I can imagine you’d be pretty pissed. Isn’t that incredible that the bank can create fake value but if old mate Jimmy down the road gets his printing press out and starts printing cash, he goes to jail!
When I first really started to understand how the world runs on empty promises was when I discovered Bitcoin. Bitcoin uses cryptography and an open source code base to ensure that the IOUs are not being fraudulently created and if it detects a transfer that attempts this, it rejects the attempt and goes on its merry way. This is REAL VALUE and is, in fact, a form of deflation, not hyperinflation, which is what the governments and federal reserve (and is, in fact, a private company! That has never been audited?!) does by pumping more fake value into the system which literally steals from your back pocket and legally diluting the money supply! This is the point where I laugh at myself for how religiously converted I am with cryptocurrencies and their underlying technology, but at the same time, very convinced that all the elements are there to back up the conversion. It’s not blind faith, because the evidence is freely available to view code.
The last economic collapse was in 2008. It took the taxpayers money to bail out the banks who created this mess with over lending at 700 billion dollars, and by 2009 the Federal Reserve committed 7.7 trillion dollars (with a T!) to rescue the financial system from complete collapse. Imagine the scenario with Frank and his bank situation used above, Frank has done everything wrong and caused the collapse of the bank and its fake promises and worthless pieces of paper, but instead of the people getting their just value back and withdrawing their gold bars, the village elders say that instead, you have to give some of your IOUs back to the bank to make it whole again.
Bitcoin may not be the final solution and there may be something better that comes of this technological breakthrough which overcomes the double-spend problem, but for now, this technology has been running since 2008 without an “I’m sorry the networks down, you can not use your credit card right now”, since the day of inception when Satoshi Nakamoto released the software into the wild west of the internet, packed full of hackers and code breakers which have not devised a way to successfully break the Bitcoin code. That’s a pretty good track record, and I’m thankful to be able to witness this shift in the way we transact. Don’t trust, Verify.
Youtube, Google, Facebook, and most importantly Memes! are among just a few examples of the groups of people or companies that will be affected by the new directive that has passed through the European Union.
What is this directive and who passed it? Essentially in lamens terms, this is a group of countries and their representative individuals that connect to pass laws that are applied to all counties involved, “world lawmakers”. The particular parts of this new Copyright law of the European Union that was passed, kills the fair use laws that currently exist. This is completely ridiculous! and creates a hypersensitive internet that cripples the current infrastructure based around sharing content worldwide for open reuse or collaboration. Imagine every single Youtube video of old songs or movie clips being removed because of this, or even google having to delete millions or even billions of links as the content has been auto-moderated to not come from the one particular artist. I’m absolutely astounded the countries governments involved think this is a realistic or achievable thing to pull off. This link for example https://creativecommons.org/2018/09/12/with-the-european-parliament-vote-on-the-copyright-directive-the-internet-lost-for-now/
is an illegal connection on the European union’s new laws eyes. Article 11 and Article 13 from the passed derivative are the two main changes that are so controversial. Imagine not being able to share content with your friends on Facebook, maybe a favorite movie clip on Youtube, or a Meme that has a screenshot of a movie scene in the background!
THIS IS NOW A REALITY!!
An example of the old free open use was taken from a license creator here https://creativecommons.org/choose/ where you can let the reader of your content know how you wish for it to be used in a CC license, while picking and choosing certain criteria about using the content with specific use cases, including not being able to profit from the content shared or be able to change it.
The days of a free open internet are slowly becoming censored by the government binding together to pass laws that the people do not want. This is why you have not heard of this until today. The officials very quickly and sneakily voted today and won, 438 votes for the new directive to 226 against the changes as shown in the image below.
So, what if you don’t agree with this new way of the internet being governed heavily? Move to a country that does not follow the European Unions international laws or go underground.
This is a circumvention that the crypto world is already working on. There are plenty of projects (including the Oyster Shell network) that are currently working hard in preparation for this change. An over-governing big brother getting its hands into every aspect of the value of information is a bad thing. Restricting the free sharing of information will slow down the advancement of positive change and not being able to communicate on a free-flowing medium like the internet for fear of prosecution, is a horrible step back in what the internet has allowed us to do as a single collective.
As one network of communication is shut down by authorities through “laws”, another will rise better and stronger through technological advancements like decentralized networks.
This looks like a simple QR code advertisement in a window, which it is… except for the technology behind it. There are 4 QR codes displayed on a screen outside of a cafe window each with the current price of the coffee updated in BTC, in real time. Let’s say you want the “Blockaccino” for $4.60, you simply open up your smartphone with a Lighting Network Bitcoin wallet, scan the QR code to make an instant payment and walk inside to retrieve your order. This is perfect for the anti-social basement Bitcoin geek, you don’t even have to talk to people to grab a coffee!
This is a combination of every brilliant advancement in blockchain payments to make instantaneous and essentially free transactions between two parties and all without an intermediary bank saying its OK.
How this all works is incredibly simple for the end user but involves some brilliantly crafted decentralized software called the Lighting Network. A 2nd layer protocol that runs on top of Bitcoin providing instant payments with other Lighting Network participants. A high-level look at how this works is by creating a payment channel that Bitcoin funds can transfer from account to account inside for free until the payment channel is closed and a broadcast is sent to the blockchain settling the exchange of bitcoin. A simpler way of imagining this is to have a group of friends standing outside of a bank, they have cash and are making bets on a dice game, while freely exchanging money back and forth as much as they want to play the game. When the players agree they want to stop playing the game and put their cash into the bank they all agree and deposit the funds into their respective bank accounts.
The QR codes are generated automatically every 217 seconds to ensure Bitcoin prices match the dollar equivilant. If a payment is received before the time is up the transfer is accepted and a receipt on your smartphone or device is generated for proof of purchase. All the customer has to do is walk inside and wait for their order number to be called out.