Welcome to last part of my 3-part mini-series on Top 10 cryptocurrencies according to Omni Finn! Sorry I made you wait so long but I have been busy with my night job and other things. Hope this will be worth the wait.
I am not a professional investor or a cryptocurrency expert and this is not investment advice. It is merely my humble opinion and (over)simplified view of how things are in the cryptoverse so take of it what you will and most importantly do your own research!
Since I'm a beginner myself, I will try and include informative links in my posts to help others who want to explore this magnificent field of investment opportunities. I am doing this for fun and I hope it can help others. If you think my information is not accurate or you would like to add something, please do so in the comments. I am always hungry to learn more!
If you would like to read more about how I became a crypto investor and what is my investing strategy, you can find the first part of this series by clicking this link and if you would like to read about my top 9-6 picks, please click here.
I have also written up a nutshell guide on how to get your first bitcoins and how to start trading altcoins.
I think that's enough with the disclaimer. Let's get on with the list! This post will cover my top 5 cryptocurrencies.
5. IOTA (MIOTA)| white paper | coinmarketcap | GitHub |
The name of IOTA comes from The Internet Of Things. Below you can find a short but very clear explanation of what that means.
Basically, it is the future network of daily objects sharing information and exchanging information with each other. For example, your vacuum cleaner could make a "contract" with your waste disposal system to empty its load when full and have it delivered to the waste handling unit. Or literally anything else. The sky(net) is the limit. Har har.
We already have many smart devices in our homes that allow for connection to the internet, such as printers and even fridges (imagine your fridge sending you a text to remind you are out of eggs).
IOTA is different from all the other coins in one very fundamental thing: it is not based on (a traditional) blockchain at all! Instead, IOTA uses technology that is called The Tangle. Basically, that means IOTA doesn't use miners to validate transactions like most coins do. This will allow for one VERY crucial feature of IOTA: NO TRANSACTION FEES! This will be great for frequent micro payments between devices.
It's worth to note that IOTA is currently measured in millions of IOTA (MIOTA) to allow for better scalability and micro transactions.
- Purpose | A unique system, that uses IOTA (MIOTA) to pay for information transactions between everyday devices via The Internet of Things. Nothing comes even close at the moment. A very promising technology.
- Proven | It is way too early for IOTA to be considered proven, in my opinion. However, the technology is unprecedented and as such, holds great potential. It does look like IOTA is waiting for its first real breakout. It could be soon if investors decide the concept holds enough promise, or it could be a while since there is no product yet.
- Sustainable | It certainly seems the technological development and "internetification," of our everyday lives and the things we use would pave the way for IOTA and similar technologies. IOTA could have the first mover advantage, but the development of IOTA needs to move fast because it is still far from a finished product and to be honest, the supporting technology of The Internet of Things is simply not there yet. One might still grab this while it's still under 1 USD (as of Apr 19th, 2017).
The Bad: Still on the concept level, backed up mostly by ideas and hype. I still believe in the idea and if it's not realized by IOTA, it will be by something else.
4. Monero (XMR)| Monero Research Lab | CryptoNote white paper | coinmarketcap | GitHub |
Monero (previously known as Bitmonero) is one of the first CryptoNote coins. It utilizes the same values every CryptoNote coin does – privacy, decentralization, and fungibility. Monero development is community-driven, based on donations and with a focus on decentralization and scalability.
To put it bluntly, Monero is the new criminal coin because it's totally untraceable unlike Bitcoin that is merely pseudonymous, which has lead to many criminals getting caught selling illicit goods in the Darknet.
Now, to be clear, I don't support or condone any illegal activities whatsoever but I think it is worth to note that selling illegal goods is not going anywhere and if Bitcoin is not safe to use for the transactions, what will? Enter Monero.
Monero doesn't ask any, I mean ANY personal details when you register at getmonero.org. You simply get your private key and whoever has that key, has your money. Just like cash.
All the transfers are "tumbled" by the inbuilt system in Monero so all the coins are mixed in a "pool" and no-one could track where each coin is coming from or where it is going (and of course I'm oversimplifying). Beautiful system, if you ask me, for I am a firm supporter of total web anonymity, especially when it comes to finances. I believe we should be the only ones to be able to access the information about our finances.
One could essentially exchange any of their other coins to Monero, put them in their wallet and no-one would ever find out where that money came from. The anonymous Monero could then be used to trade back into any other coins, obliterating all traces of where the money originally came from.
Of course, there are many competitors, such as Zcash and Dash, which both have big support bases, so go have a look and let me know what you think! But as for my experience, Monero is the most user-friendly and also the most proven in what comes to anonymity.
Can't see a way you could lose money by investing on something the drug lords of the future will need to stay in business. And of course, there is protecting your own privacy in increasingly controlled and monitored world of the internet.
- Purpose | The go-to option to achieve true anonymity in online transactions for now. I don't know any coin that does it better. In fact, one should keep an eye out which coin is used most for illicit activities to get an idea of which one is the most secure. A no-brainer over here, really.
- Proven | A long track record what comes to altcoins. Monero has been around since 2014 and it broke out over a year ago in Apr 2016 and it has been steadily climbing up ever since. Totally proven.
- Sustainable | As long as the criminals keep using it, there will be a huge demand. If they, for some reason stop using Monero, it will be because either the coin is compromised (unlikely) or there will be a better alternative (much more likely). But for the time being, I consider it sustainable, even with competition.
The Bad: The stigma that comes from using a "criminal coin" I guess. Although money is without heart and morals so why would anyone care?
3. Litecoin (LTC)| Litecoin Wiki | coinmarketcap | GitHub |
Litecoin is an easy inclusion on this list, sharing many of the great features (and some even better) than Bitcoin itself. Think of the relationship between Bitcoin and Litecoin as that of Gold and Silver (Litecoin, of course, being silver in this analogy).
Both Bitcoin's and Litecoin's primary function is to be a cryptocurrency. So digital cash. That's it, nothing fancy here. And that's precisely the strength of both coins.
The most interesting differences are to do with Litecoin's name: It is faster in transaction times and it's more efficient to mine (due to Scrypt instead of SHA-256 algorithm). Also, the maximum supply of Bitcoin is set to 21 million, whereas Litecoin's is set at four times higher at 84 million. These features would suggest that it is better suited to everyday purchases than Bitcoin (at least before the possible Lightning network update goes live).
- Purpose | It's the silver coin of the digital world, where Bitcoin is the gold coin. Enough said I think.
- Proven | Litecoin has been around since 2011 and has had its ups and downs. The general direction lately has been up, though and especially this year, we have seen a new explosion in Litecoin interest around the same time Bitcoin shot up from 900$. The only cryptocurrency I consider more proven is Bitcoin, actually.
- Sustainable | It is possible that a better suited "everyday coin" will surface or possibly already has (Omisego). However, this is not what I see the as main use of Litecoin. I think Litecoin is best suited as a store of value, much like Bitcoin, gold, and silver. Despite the gold market, there is a demand for a cheaper asset (silver) so will there be demand for a lighter crypto to hold. After all, the inbuilt scarcity is lower in Litecoin, which makes it an ideal store of value for investors who don't have a lot to invest in the beginning (such as myself). Also, the branding is already done to represent the silver coin, which would make it hard to compete against it in this particular use. Count this one absolutely sustainable.
The Bad: It is possible that Bitcoin's future updates could make Litecoin Obsolete, but given that they both support each other like gold and silver do, I find it very unlikely.
2. Steem (STEEM)| white paper | coinmarketcap | GitHub |
Since we are all here already, it probably won't surprise you that Steem is pretty high on my list.
For those of you that don't know yet, Steemit is the future Reddit, Facebook and Youtube melded together where content creators get paid according to the likes and shares. It is kind of like a free market for social media.
Before you wonder, no, you don't have to put any money in Steemit to start using it. In fact, every new user gets a small donation in Steem Power to get started. For this reason, there is a phone verification (via text message).
The great thing about Steemit is that it is decentralized, which means Steemit posts can't be censored or taken down by anyone for any reason! That's why there are very interesting authors such as @nakedbakers. (yes, it is exactly what you think.) That being said, Steemit does have a flagging system that can be used to hide unpleasant posts and strip them off rewards if enough users flag a certain post. This is an important part of curation. After all, Steemit runs entirely off content creators' and curators' free will, which is fantastic to me.
Being decentralized also means that and it gives the value of each individual post directly to the author and their curators. Whereas platforms such as Facebook give you nothing for your content while making mad profits and to top that off end up with all the rights to your content. So essentially you are creating free content for big corporations such as Facebook when you could be posting at Steemit and making (however little) money for yourself.
At the Steemit platform, it's a good idea to follow only users that you really like. Otherwise, your feed will be filled with uninteresting and useless crap that you never want to read. Then you might also miss out on some really interesting stuff. Following only authors you truly like will help you curate the best content and help the platform to develop further.
When you submit a post, you have the option to take the possible rewards 50/50 in Steem Dollars and Steem Power or 100% Steem Power. If you are serious about posting in Steemit (as you should), it is always a good idea to power up. It's merely a question if Steem Dollars are traded below or above 1$. Sometimes they are traded over 1$ and that's when you want to take 50%50 because you can get more Steem power by trading Steem Dollars into Steem by yourself outside the platform.
One should always promote their posts in other social medias (and Steemit Chat) that they might be using anyhow to spread awareness of the platform. More users, more value to your Steem Power!
Curators, you ask? Yes, you can actually make money at Steemit by simply resteeming (sharing) other author's posts. If they get more upvotes after you already upvoted and shared, you will get a curation reward in Steem Dollars.
What about Steem Dollars? Ok, I know this can be a bit confusing. It was for me at least so I will do my best to put it simply.
First of all, let me be clear: Steem is the name of the coin and Steemit is the name of the platform that uses the coin for various things (like Steem Power) that I am going to go through next.
Steemit = Decentralised social media platform that pays its authors and curators
Steem = The coin that can be traded and used to Power Up (turn Steem into Steem Power)
Steem Power = Your influence on Steemit platform. The amount of Steem Power determines how much your upvotes are worth. With great power comes great responsibility.
Steem Dollars = Some of the rewards will be paid in Steem Dollars (SBD). Steem Dollar is a smart contract based on similar technology as Ethereum that will always guarantee you can trade it into 1 $ worth of Steem within the inbuilt exchange. Tip: When Steem Dollar is trading below 1$, it is a good idea to opt to take 100% author rewards in Steem power rather than Steem dollars unless you are looking to cash in the Steem Dollars into Bitcoin or fiat money right away.
I listed the basic steps to get you started. Introducing yourself can be very lucrative, so don't skip it!
And do remember to take a selfie holding a handewritten Steemit sign with your username and the posting date. This is to confirm you are a real person and will greatly contribute to your success on the platform.
Steemit is the future!
Users who hold large amounts of Steem Power are called whales and (at the moment) the whole platform is kind of about catching the attention of the whales because they possess the power to reward your post with hundreds of Steem Dollars with a single upvote!
Powering up with Steem can be seen as a long-term support for the platform, as if you want to "power down" as in convert your Steem Power back to Steem, you will have to do so in 2 or so years in small increments.
Steem is a proof-of-stake coin (in opposed to Bitcoin's proof-of-work), which means Steem is mined simply by holding it (Steem Witnesses) which is very efficient compared to proof-of-work.
Steem has an in-built yearly inflation rate of 100%, which is a lot compared to other coins. However, if the user base grows to something even close to those of Reddit's (250 million) or Facebook's (2 Billion), I don't think the inflation matters that much. 90% of the newly released coins are distributed amongst the current Steem Power holders every year.
- Purpose | The main use is to Power Up the Steemit platform and to distribute rewards to other authors through curation. The concept is unique at the moment and I find it hard to imagine there would be a better platform anytime soon.
- Proven | Steemit is still in Beta, but the rather small user base (around 300 000 to date) is very active so I have high hopes that through active new users, the platform will gain more traction and we will see an explosion in mainstream adoption within couple years. This could be the next Facebook, people!
- Sustainable | Depends entirely on mainstream adoption. If Steemit won't go mainstream within the next two years, I feel it is going to fail. For the time being though, it seems very promising and it would be nice to be a part of the next possible Facebook. What do we have to lose?
The Bad: 100% yearly inflation is brutal and there is a chance that the platform simply won't survive, in which case the value of Steem will go to 0.
Are you ready for the big one? Are you excited?!1
Because I sure am...
1. NEO (NEO)| white paper | coinmarketcap | GitHub |
My name is NEO (formerly known as Antshares).
This one has slipped under many investor's radars most likely due to its recent rebranding in June 2017. NEO used to be known as Antshares (I know, right, horrible name). The technology has been developed since 2014 (as long as Ethereum) but the branding and coin philosophy has been way off. Take a look at the old Antshares logo. Yeah. No.
Since the rebranding and change of the platform philosophy as well as the launch of the new website and new wallets such as Neon Wallet that I like to use at the moment, The price of neo has almost skyrocketed.
NEO is dubbed as the Chinese Ethereum by many, which I think is pretty accurate in many cases. Mostly due to smart contracts. However, there are very big differences, which this article explains very well. I will try and summarise the most important points on this post.
This could soon be NEO vs. Mr. Eth... I mean Smith!
One thing that sets NEO apart from Ethereum is the fact that one can program NEO smart contracts using almost any existing programming language whereas for Ethereum smart contracts one would need to learn a new, dedicated programming language. This should significantly lower the cost and effort required to program for NEO, which should lead to an explosion of NEO-based projects in the near future.
The important thing to understand about NEO is that it is essentially buying you shares in a company that is trying to bridge the gap between old and new finance using smart contracts.
Let me clarify. NEO uses fiat currency (CNY, USD, EUR etc.) as its internal currency instead of NEO cryptocurrency. If this feels confusing to you, think of it this way: By buying and holding NEO, you are buying and holding shares of a "company" called NEO. And the company's goal is to bring smart contracts to the everyday world we live in right now. That is huge.
The NEO "company" then pays dividends in NEO Gas for holding NEO. NEO Gas is another fully tradeable cryptocurrency.
One of the great things about NEO is that it's mining is done by dBFT over proof-of-work or proof-of-stake. It is somewhat similar to proof-of-stake but is, for example fork-proof.
Due to the way NEO "mining" works, one makes money simply by holding NEO. In fact, many of the wallets have already included a "claim Gas" -button that lets one claim their dividends in NEO Gas every 5 minutes. Pretty neat when one starts to think about compound interest on that. A NEO Gas calculator may be used to get an estimate on how much money staked NEO can generate. Essentially the more one holds, the more one makes.
NEO has in-built inflation like most coins. What sets Neo apart is that it's inflation will stop once all the coins are released, just like Bitcoin or Litecoin. It just happens much faster. At first, the maximum number of Neo is set at 50 million and that amount will double within five years. This means Neo is actually scarce, which will make it great for holding in the future.
In the long run, NEO may not be the savior that frees us from the matrix, but it might be the system we need right now to start solving everyday problems with cryptography to pave the way for the financial paradigm shift (crypto becoming mainstream, changing the way we transact every day).
One probably wouldn't want to miss this train.
- Purpose | NEO are shares in a company that attempts to bridge the gap between the current world of finance and the new world of crypto finance. Whether one believes this is something we should be doing, should dictate if one decides to invest.
- Proven | NEO (Antshares) has been developed since 2014 and the rebranding did wonders for NEO's public image. The technology still has many unanswered challenges and possible vulnerabilities. The team behind NEO seems very competent and motivated and on top of that, NEO enjoys Chinese government's support (to some extent).
- Sustainable | NEO might not be sustainable in the long run but on the other hand, it may revolutionize the financial world as we know it. And it probably will. In the short-term it would seem like a slam-dunk in every crypto portfolio.
The Bad: The companies using NEO will have full control over their private chains, which enables the possibility for fraud. The NEO team is hopefully working on this issue because simple blacklisting doesn't seem sufficient knowing how many big Chinese corporations do business. Despite this, and many others problems, I consider NEO technology the best one for the world's need right now and that's why NEO made it to the top.
Thank you so much for taking the time to read my post!
If you liked my post, would you leave a comment so I can add you to my network? If you don't like it, would you please tell me to spend my free time on something else down in the comments? Thank you!
All photos are my originals, except the GIFs and the first one that is by my good friend Photographer Veli-Matti Kantonen. And the IOTA infographic is free to use stock image.