Part 1, a quick foundation in Crypto and overview of my research sofar into the top 8 crypto assets in terms of marketcap.

Dear Steemers,

A quick summary of the top 8 cryptocurrencies in terms of marketcap and how they overall compare in terms of a longterm view.

Bitcoin
Starting off with Bitcoin, the crypto that laid down the foundations of a decentralised, trustless, peer to peer digital form of money. (money as a network protocol like tcp/ip)

Bitcoin today, although still the longest chain and with that the most secure chain, is still developing a solution for the scalibility issues it has.

For those new to crypto, the incredible properties that make the underlying technology of Bitcoin most likely one of the greatest inventions of the 21st century.

Those properties are:

• decentralised
• borderless
• neutral
• zero counterparty risk

The fact that these properties can now be achieved through the use of some nodes (computers) and some software (bitcoin application) is what made Bitcoin unique.

the good old days
Before Bitcoin people had to rely on centralized thirdparty companies run by corrupt governments to make cross border transactions.
Those companies are referred to as banks, if anyone still believes our current financial system is a healthy one, try and google how debts have evolved in the USA and Europe and pretty much wherever a centralized bank is being used to print money.
It is a debt based system, the debt ceiling will grow forever no matter how the economy is doing, feel free to have a look at how the dollar has been losing value ever since it’s creation and how each born american year on year starts off with huge debts.

fiat currencies have a 99% failure rate
So before you decide to throw names like ‘pyramid scheme’ or ‘ponzi’ at crypto currency, you may want to ask yourself if it is worth doing proper research into a system that doesn’t require crooked banks run by greedy managers that are basically just doing their job. Making the numbers right to fit their bonuses.

adoption
Although it is hard to get a precise number, it is most likey so that less than 1% of people are in crypto. As with any new technologies issues arrise, in Bitcoin transactions that are made are being kept in a ledger.
This ledger is being kept on every node that participates in the network. So if you decided to start a Bitcoin application you start a node that is added to the network.

consensus
There has to be an agreement amonst all nodes that transactions are valid and can be added. In Bitcoin the longest chain, the one with most transactions is regarded as the best chain.
Transactions are broadcasted and through a mechanism all nodes compare the broadcasted transaction to the most trustworthy chain (longest chain) and are then eventually added to the ledger. The ledger is also called the blockchain. It simply keeps track of all this data in blocks of data. However it is important to understand that blockchain by itself is not that revolutionary, it is the way transactions are added that made Bitcoin unique:
Decentralised, neutral, borderless, zero counterparty risk.

Trilemma
The ledger also called blockchain, in case if Bitcoin consists of linked data blocks that refer to eachother. Each block in Bitcoin has a maximum size of 1 MB.
The issue that Bitcoin has run into is that if too many people are using the network, there are too many transactions to fit in 1mb blocks causing the system to become very expensive and slow.

The trilemma is the problem that describes that in order to scale Bitcoin you either have to give up on decentralisation or securiy.

Proof of work is arguably still the safest protocol out there

solution
Developers and supporters of Bitcoin had a different view on how to solve this issue, to cut a long story short. A hardfork happened and next to Bitcoin, Bitcoin cash was created.

Bitcoin’s solution was to implement segwith (it removes some info from the transactions to make the size of the transactions smaller)
This by itself improves scalibility a little bit, but doesn’t solve the issue of scalibility.
The second solution that is being worked on is implementing the Lightning Network. It involves a second layer like the internet is based on several protocol layers and allows for transactions off-chain as long as the channels are open.
When the channels is closer it will then write the transaction on the blockchain (on-chain)
The channels are opened using a transaction fee and the idea is that people will just have money on the channel which provides for liguidity, just like you would have on your bank account.
Without explaining how it works in detail (it is not tested on full scale yet), there will be a network of lightning nodes, that will have an incentive to provide liquidity on their nodes, an overall balance is kept between all these channels, if several channels are connect people can transfer money t each other via multi hops rather then having to setup a direct channel, as long as a multi hop route is available.
This also gives the extra advantage of privacy (it will be difficult to trace who sent the transaction)
Some of the question marks people have are that in order to keep a channel open you need to be online and if you are offline there will be thirdparty (watchtowers) that are used to eventually trust to hold that transaction until you come online. These need to be trusted as well as them adding a centralized element to the lightning network.

It is too early still to say if this will be a working solution, even though people claim so.
They have a working testnet and talking to some of the devs they believe it will work.

Bitcoin cash
The other chain of Bitcoin now has 32 mb blocks, allowing for a bigger scalibility right of this moment. Although these blocks are not used yet at that size, whilst more adoption happens, they reckon to be scalable for the next few years, based on a healthy adoption rate and taking into account hardware development.
The potential issue they run into in the future is that technological advancements are not as fast as hoped, so that ever increasing blocks will enventually become a bottleneck.
Bitcoin cash believers think this should not be in an issue.
The other potential problem is that only those with enough money are able to run full nodes , causing centralization.
However the creator of Bitcoin already realised that scaling Bitocin would eventually involve companies running the full nodes and that this by itself is still decentralised enough.

I think overall people agree that not all nodes have to be part of the consensus mechanism.

In part 2 we continue with comparing the top 8 crypto currency in terms of marketcap and how they should be rated in terms of longterm investment potential.

Feel free to correct me if I am wrong on certain statements but try to back your arguments up with resources and facts.

For a full comparison between Bitcoin and Bitcoin cash check out:

https://cryptoowls.com

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https://cryptoowls.com

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