Strategy to Store Wealth in Cryptocurrencies
For a long time I thought Bitcoin would fulfill this purpose due to it's reserve currency nature. I mean it looks like a safe bargain: it's deflationary, it's code is well analyzed, the softwares and services have been security reviewed, and the network is big and strong.
So for example if somebody's net worth is like 100,000,000 $, then maybe he would store 70% of that in Bitcoin, and then the rest of it in his investment portfolio spread around. Many billionaires usually keep most of their money in 1 place, like in government bonds or a fat bank account, where it's relatively safe.
So usually people like to keep a large chunk of their money in safe place, and not use it for investing, while they use only a fraction to invest, that they can afford to lose, obviously. I mean if you have 100 million $, you probably want to keep that wealth, and only use a fraction of it to generate income that you can use to sustain your lifestyle.
And this is what I thought would Bitcoin fulfill. I have even kept 80% of my money in Bitcoin for some time, and to my great sadness, I had to abandon Bitcoin, so now I had to scramble the money into multiple altcoin investments. Meanwhile I am searching for an alternative to keep a chunk of it in it.
Certainly this UASF hardfork that will happen on August 1, will put in question Bitcoin's reserve currency status, and I don't want to get caught in the middle of a tornado. So I have to look for alternatives.
For now I don't have one, I am just diversified into good altcoin investments that I think will prevail, like: Synereo(AMP) , Steem, Dash and others. Until a more safe and stable currency arises, I'm afraid I can't put all my eggs in one basket.
I usually think Dash will be the replacement of Bitcoin, but I am not certain yet. Ethereum is definitely too complex and the code is too open, so it's not safe in my opinion to store large wealth. Ripple is a joke. NEM is an asset platform, also too big. Litecoin is too correlated with Bitcoin, so Dash is the next in line.
It could be a split between Litecoin and Dash, however Litecoin is always lagging behind BTC. So if BTC fails, people will just rather move their money into USD in my opinion, so LTC will probably lose as much in % than BTC if not more, but both will lose relative to USD in this case.
I definitely want DASH to succeed. For example I have asked when will Dash have it's Electrum-Dash lightwallet fixed. Because it's not maintained anymore, and we need a secure lightwallet to store larger amounts, Electrum is perfect.
It turns out, that they have just voted on this, and the vote has passed:
So it looks like Electrum-Dash will be operational in the future. One month remaining before the payment is released to the dev, so in 1 month he will start working on it.
Ok so that will be very useful and it would certainly make DASH more safe to use. I don't like EXODUS wallet, since it's closed source. I want open source like ELECTRUM!
After the new wallet will be out and it will be carefully reviewed by the development community, DASH could really fulfill the role that Bitcoin once had.
Until then I think diversification is the key, keeping the eggs in multiple good baskets, but also making some money out of altcoin investments.
Disclaimer: The information provided on this page might be incorrect. I am not responsible if you lose money using the information on this page! This is not an investment advice, just my opinion and analysis for educational or entertainment purposes.
Sources:
- https://pixabay.com
- https://www.dashcentral.org/p/ElectrumDash
- https://www.dash.org/promotional-graphics/, License CC BY-SA 4.0
- https://bitcointalk.org/index.php?topic=1921886.0
I really don't see a future for DASH or XMR. Soon STEEM will have the privacy features of XMR. DASH + XMR have 0 use case right now. You talk to an everyday person and they are not interested in DASH. - Steem on the other hand I can see more people using long before DASH or XMR on a global level. It may be the coin that "on boards" people in to the Crypto world. Steem will end up making BTC and other alts more popular. I see Steem taking off way before DASH and the rest.
Dash is more than just private transactions. It has instant transactions (necessary for mainstream adoption), a governance system to reach meaningful consensus in a timely manner, self-generated revenue to promote adoption/fund projects, and a paypal-like interface (Dash Evolution) starting alpha testing this summer. Evolution should be finalized by the end of the year, and is another big step towards mainstream adoption. It will allow people like my very tech-unsavvy parents to use cryptocurrency without relying on a Trusted 3rd party (like Mt. Gox) to hold their funds for them.
I don't think that is how we should look at it. I think we certainly need 1 crypto that will be extremely secure, and simple, no extra features, just P2P cash system like satoshi wanted.
The problem with Steem is that it will never be as secure as a dedicated cryptocurrency, because it carries on a social media on top of it. So the number of attack vectors will always be higher than for a simple coin. Which elevates the risk.
So some people might be confident storing larger amounts here, but what if you were to store 100-200 billion dollars, and the worlds most intelligent and best funded hackers will try to steal that. It could be a disaster.
Also Steem to my knowledge doesn't have an offline wallet generation software yet, nor an offline signing software. And we know that online wallets of any kind are not reasonable secure.
Keyloggers everywhere, javascript injection malware, and such. I would certainly not hold large amounts in Steem until these issues are addressed.
agree. Steemit is social network and Steem is rather it's shares than currency. Same is many other ICOs on Ethereum today. I personally support Steemit for the sake of ending FB parasitizing on people's content and take all profit for itself. @jerrybanfield brought me here and I believe his intentions are similar. Steemit is new economy movement already in practise. Hodl and steem on.
well i would argue XMR is used on dakrnet markets! and thats why so many people ovote for it oontwittter those are all the internet drug dealers lol they brag aboit how they can show a xmr transaction and show how you cant reveal anything significant about the transaction, same with bytcoin, i dunno think all crypto has a use, its all usable as a store of value
The Great Crypto Jellyfish!
but yeah steem will dominate when it has privacy feature!
yes steemit Onboards people to crypto! steemit can allow ANYone to join the blockchain! My friend read what he saw when i walked im through steemit registration and he read to me, "Ok it says, Wellcome to the blockchain" and that alon is powerful! steemit makes it so easy to get in the bitcoin world and i just now tell people steeit pays you in bitcoins because for alll intensive ppurposes, you are earning bitcoin here, steem is exchangable for bitcoi, so if they wanna use steemit to just earn bitcoins they can! but i always explain YOUR example of YOUR acount as the WHY they need to have steempower , how you onteven post artices and u just make thousands a month off comments and upvotnig!
Whenwill the steem privacy features come out?
widely distributed, massively redundant, highly parallel....my favorite thing.
What does massively redundant and highly parralel mean?
massive
exceptionally large.
"massive crowds are expected"
redundant
(of words or data) able to be omitted without loss of meaning or function.
highly_
in this case it means a 'whole bunch'
Parallel in this usage means 'if that way is blocked, go around it on a parallel path.
do you need help with 'widely distributed network' too?
I think I understand now.
I would just call it decentralized ,adaptive, and very very simple. Usually you get security through simplicity.
Like how encrypting a piece of information on a paper beats an army and a safe vault level of security. Digital is a new level of adaptation versus physical assets.
simple on the surface, easy to use...does NOT mean the innerworkings are simple..
try an appendectomy at home..notice how COMPLICATED your insides are?
yet it seem very simple on the surface...just skin.
Yes, that is how cryptography is, very complex math on the inside, simple 1 push of a button on the outside.
But what I meant was simple and smooth logic. Like for example even if a crypto algorhtm is complex usually it's more secure if it's smooth, like SHA based mining instead of something very complex and probably flawed.
like rot-gut whisky..
very smooooooo (cough)ooooooooth.
I like red wine better, it's smoother.
Great points u bring up. Do u mind explaining the difference between open and closed source? Also I think Ethereum has a great future and believe if anything will replace Bitcoin that It will be Ethereum. Just my 2 cents.
Open source is when the source code is known, closed source is when it's hidden. Open source software can be compiled by yourself, knowing that the code it's running from is safe (if you or other devs have inspected it beforehand). In closed source you have to completely trust the dev that the software he is providing is not malware or doesnt have a backdoor in it.
A closed source wallet software is a horrible idea. It could either have a huge bug in it that is hard to detect by their small dev team, instead of publishing it so that everyone can analyze it. Or the devs could be scammers and insert a backdoor in it, that will steal all your coins later.
Good strategy! Diversification is key no matter what you invest in. It's unwise and risky to put all your money into one stock just as it is now with one cryptocurrency. While having a fair percentage of your crypto wealth in Bitcoin is probably not a bad idea, spreading the rest out among other top crytpos is smart as no one knows which one (or ones) will do the best and still be around 5 years from now. Right now I love Dash and hope it succeeds, but ETH, ETC, LTC, and XMR are also good bets I think as well.
I would put most of my money in 1 place if I would know that it's secure, but we are not in that stage yet. All of this technology is still experimental, we don't even know if the underilying encryption is secure even (quantum computers).
Plus the number of zero day bugs and such still make these coins risky. Maybe in 10 years we can say that those that will be around will be reasonably safe.
Totally agree. Important to take some profit here and there too in case crypto all blows up one day!
I'm a new investor in cryptocurrency and I've never been this excited about it. :) Thanks for sharing!