On the cusp

The last two weeks in the cryptosphere have been incredibly exciting. Bitcoin is setting new price records practically every hour, Ethereum just blew past the $200 mark, and formerly little known NEM beat out well established Litecoin to take the 4th position on CoinMarketcap. Steem has rallied nicely and even silly Dogecoin appears to be making a big comeback.

This is all great news if you happen to have invested in any of the above named coins (and the other top coins) say a year ago. But what if you didn't? What if you are brand new to the cryptocurrency scene and couldn't have possibly known about those winners? Or, what if you've been around but for whatever reason didn't invest back in the day? Did you miss the train?

The cryptosphere is a rapidly growing industry with numerous opportunities still to be had. That means there are some seriously undervalued coins just waiting to be discovered. While many are scouring through CoinMarketcap's top 100 to see which of those is most likely to land in the top ten a year from now, I want to draw your attention to two coins that are not even in the top 100 yet but which I believe have a solid chance to being winners in the next few years.

What makes a good coin?
This is by no means exhaustive, but when I'm making my first quick evaluation of a new coin, a few characteristics I look for are strong community, regular communication from the development team, longevity (the undervalued coins which started out in 2013 and 2014 are generally more interesting to me than the ones that began last month), supporting infrastructure (it can not be just a coin), good incentive to hold the coin, and intentional buy support on the exchanges. A coin doesn't need to have all of these characteristics to be considered a good coin, but I will not even consider investing in a coin that doesn't have most of them. A well written whitepaper helps. Back when everything in crypto was happening on the Bitcoin Forum I considered the length of the coin announcement thread to be a great indicator of the coin's viability. Now with so many other online gathering places for cryptoenthusiasts that's not as good an indicator as it used to be, but it's still worth noting.

Without further ado, here are my two picks. Keep in mind that nothing I write here is to be taken as investment advice. Do your own homework and only invest what you can afford to lose. I also need to disclose that I hold both of these coins. My purpose in writing about them is so that you will know they exist. It is up to you to decide if you would like to own them.

DNotes: Bridging the gap between the centralized and decentralized
DNotes was founded in February of 2014 by Alan Yong. Although at first glance the coin seemed like any other Scrypt coin (there were plenty back in the day), DNotes set itself apart by not only developing the coin with its block chain and wallet, but by systematically building up value added infrastructure around the coin. Not only that, DNotes took the lead in the altruistic mission to educate women about cryptocurrencies so that they could get more involved. The CryptoMoms Forum became a hub for men and women to gather and learn about all things crypto. CryptoMoms was soon followed by the DNotes Vault, DCEBrief, The Four Pillars of Business Success and more.

The DNotes team raised the bar on professionalism in the cryptospace. One of the glaring characteristics of the early days of the cryptocurrency and block chain industry was a noticeable lack of grace and courtesy in day to day interactions. Many coins that might have been good were sunk by tense human interpersonal issues which all boiled down to lack of basic professionalism. Alan Yong and his team noticed this and made a conscious successful determination to run DNotes and all its supporting infrastructure with impeccable professionalism from day one. The original DNotes thread on the Bitcoin Forum became known as a fun and upbuilding place to hang out and where all questions (and even some trolling remarks) were addressed with the utmost respect.

Block chain technology has come a long way since DNotes got its start, and Scrypt coins requiring tons of computing power are becoming outdated. DNotes is adapting and this summer will be rolling out DNotes 2, which includes an adapted Proof of Stake method of creating new coin, coding written in C# which is a more broadly used programming language, and an array of financial services to make using DNotes easy and attractive for people who aren't currently into cryptocoins. The easiest way to handle the transition is to store coins in the DNotes Vault, where the entire transition to the new version for account holders will be handled by the development team.

DNotes is currently number 114 on CoinMarketcap and is priced at around seven cents a coin.

Diamond (DMD) the crypto store of wealth that pays dividends
Diamond Coin has been around since 2013, but underwent a major change in mid-2014, going from a Scrypt coin to a Groestl coin. Scrypt and Grostl refer to hashing algorithms. Its mission is to be a reliable store of wealth in the cryptospace. Diamonds are rare--there will only ever by 4.38 million of them--and they are meant to be stable. The stability is provided in part by the related cloud mining operation where investor dividends are paid out in Diamonds which are purchased on the exchange.

Diamonds currently mint at a 25% APY rate of return. This means that if you own 1000 DMD and keep the wallet open for minting, after one year your wallet will have minted an additional 250 DMD! The wallet works very well, minting like clockwork once the required nine day coin maturity period has been reached. This makes DMD a great coin to buy and hold, and if you need to sell for cash, you can limit your selling to the newly minted coins and never touch your principal. In order to avoid some of the security flaws common to proof of stake coins, Diamond currently runs as a hybrid Proof of Work/Proof of Stake coin. This means that not only can you also mine the coin if you are so inclined, the network does not depend on Proof of Stake wallets running constantly.

When I first started buying Diamond Coin sometime in 2015 the price fluctuated between 15 and 30 cents. Not too long after I finished acquiring all the coins I wanted to make up my principal, the price started climbing and is now at $1.39 per coin. Part of this dramatic price increase is a result of just about every altcoin experiencing a dramatic price increase. I believe another reason is that as the volatile nature of cryptocoins hits home, people are looking for a coin that is stable and reputable to invest in as a way to preserve wealth. Diamond can be that coin. Not only do I expect it to hold its value long term, it will also continue to mint new coin, not only preserving wealth, but adding to it.

Just like DNotes, Diamond is going to be upgrading in a big way this summer. The proof of work part of the network will be replaced by supernodes, which can be set up and run by anyone holding 10,000 or more DMD, and the proof of stake part will be updated to reflect improvements in technology. The upcoming updates will be so sweeping and dramatic that the development team will issue a new whitepaper for Diamond.

The Diamond community is longstanding and loyal. Diamond is not much of a speculating coin (although some people do speculate on it). It's a buy and hold coin. The market is not very liquid, which means that if you want to buy or sell at an agreeable price you will need to place a limit order and then wait a few days for it to fill. The community also enjoys some fun. Every July when Diamond's anniversary rolls around there is a cake decorating contest with prizes in Diamond coin for the winners. One of my children entered it last year and took third place and a prize of 33 DMD, which back then was worth around ten dollars. And of course, we got to eat the cake once we'd submitted our entry.

Diamond serves a niche within the cryptosphere, and it's all about being a store of value. I would recommend that everyone hold at least some Diamond. I would also recommend that you only sell off newly minted coins, but never your original investment. It's the difference between selling the golden eggs and killing the golden goose.

Diamond is currently ranked at #174 on CoinMarketcap. The development team's goal is to get Diamond back in the top 100 (where it used to be), and they have every expectation that this will happen within the next year.