There are Basically Four Categories of Cryptocurrencies and Blockchains
There are Basically Four Categories of Cryptocurrencies and Blockchains that you should keep in mind before investing:
Bitcoin Alternatives: these are pure currencies, their goal is to solve bitcoins scalability and environmental challenges before the bitcoin community does. The benefit is they can try out new hashing algorithms, encryption types, block sizes etc. without having to have the entire bitcoin community take the risk with bitcoin proper. These to me are risky as an investment because successful alternatives will likely have their features adopted into bitcoin or in a bitcoin fork so there’s an incentive to just hoard bitcoin till a fork with all the best features airdrops you your winnings.
Sidechain Platforms: basically these are blockchains of blockchains like Ethereum, NXT, Waves, ARDR, Bitshares etc. that are trying to create the best platform for creating, distributing and trading custom token assets for capital raising, in-game currencies, gift cards, smart contracts, etc. I think these are my favorite investments because the success of tokens made on these platforms create demand for the platform and the platforms internal currency (Ethereum/Waves) and a few successful tokens can create a home for the platform for time to come. RSK and Omni are platforms built on top of existing blockchains.
Privacy Coins: These are coins who are mainly trying to figure the best method of privacy while at the same time be convenient and scalable. There is a demand specifically for anonymity in the black market and from privacy hawks that I put these in whole separate category because I expect the dominant currency coins will be lot less private than these particular consumers will want.
ICOS/Token Products: Non-currency tokens meant to act as symbol of an investment or for redemption for a particular good or service. These are the riskiest as they are built for niche applications and lot of them are scams. This is where Steemit, Dtube, Sola, etc fall into unfortunately. Recommend you read the associated white papers and know the product.
Generally if I can’t fit a token into one of these categories I don’t think twice about investing in it.
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Upvoted because I found this concept of different types of blockchains to be interesting. Not sure what to think of your analysis of Steemit, Dtube, etc. You kind of have me worried and wondering if I need to re-read the white paper?
I'm not saying it's a scam, per se. Just know the value that is behind the app/token.
I'm favorably investing my time in Steemit, not so much in sola or dmania.
His analysis of Steemit is flat out incorrect. It is in no way an ICO token.
There are more ways to break it down, but I like this. It seems pretty simple. Resteemed for my newb friends.☺
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Have you investing anything in NXT or Ardor. I'm waiting for Waves to come back down. I'm not sure if these guys can compete with Ether or EOS.
I have not. I do think the security aspect of NXT is fascinating for the 'child chains' it wants to nurture. Lots of possibilities!
Yeah NXT looks like the buy for now. Missed on Waves and my Ether is making me bank at the moment anyway.
I think you need to significantly rework your categories - they are in no way distinct currently. Privacy coins fall entirely under the umbrella of Bitcoin alternatives - ie. Monero's goal is to be used as currency, and it works towards being the money it can. It has a focus on privacy because to be good money it has to be fungible, and a public history of coins (like Bitcoin has) is anathema to fungibility. You have NXT/ARDR listed as a sidechain platforms, disregarding the fact that their initial distribution happened through an ICO.
You are also wrong on BitShares - it is not a sidechain platform. It is a decentralized autonomous bank - a direct evolution of coins that intend themselves to be used as currency. Instead of using BTS as money, the decentralized autonomous bank/exchange issues price-stable coins (such as bitUSD) which can be used as currency - this solves the probelm of volatility.
Wrong again on STEEM - it is not an ICO token. Original distribution happened via mining.