Which Crypto Will Survive the Bear Market?


Bitcoin cash has fallen below litecoin for the first time since it was created as an endless sell-off continues amid slowing economic data in China, falling stocks and a brutal year long crypto bear market.

“Crazy” Fed keeps on strengthening the dollar which is now close to passing 100 on its index. Tether thus is now a top four crypto.

Top cryptos, December 2018.

The global crypto market cap is now close to falling below $100 billion, currently standing at $101 billion on trading volumes of $11 billion.

Bitcoin’s market share is not far off the December 2017 high of 65%, currently standing at 55%, as other cryptos fall more just as they rose more.

Ripple keeps on keeping that second position, eth not even trying. Other top coins now reduced to little tiny ones. Is this the end for cryptos?

For many of them, probably. We never found the time to go through the top 100 and guess which will wither and which will roar, but when the idea came and we had a brief look, except for bitcoin and eth and some tokens and maybe some niche coins, one couldn’t see much differentiation and thus use case and reason/s for them to be.

Yet what the market decides is difficult to predict, but are perhaps even bitcoin and eth in a crisis of confidence?

Bitcoin is the most liquid crypto with the biggest financial infrastructure. Eth for example still doesn’t have regulated futures, not that they’d want them considering what happened to bitcoin.

Bitcoin, however, is still paving the way when it comes to integration with the financial system. It is still the most used base trading pair for all other cryptos and even tokens. It is probably the most used for international payments, transferring on-chain about $4 billion worth a day.

It has certainty in regards to the 21 million limited supply. It has a fairly punk, somewhat ideological, somewhat ancap, and quite skilled, ecosystem. It has a certain spirit.

What is dead can never die, as they say. Bitcoin has died so many times that even if it does really die, no one would believe it. If it didn’t in 2011, then it probably won’t because in a way there is no potential alternative solution to the recurring banking crisis.

So even if its role is limited to keeping in check central banks’ fiat manipulations, then it probably would have some value at least as a hedge, while it so happens to be easily transferable, and be a bit like gold.

Ethereum is kind of the same as the above, but while bitcoiners can be described as “ree banks,” ethereans can be described as “wow new toy.”

They complement each other, quite a lot. Both would be perceived very differently without the other. They brothers, who happen to be best friends even if they scuffle now and then.

If eth goes, many would cry not just for the money, but because life would become a bit boring without all them new toys.

Eth is the land where hackers hack hackers. Where complex algos work towards a unique money pegged to prices, although that will prob be some time away.

It is in eth where you have the actual decentralized banks. Where the stock market and much else can be turned natively digital to the great benefit of everyone, including the young bankers. The old bankers of course are retiring so they can take their outdated views – which can’t comprehend this new world – with them.

Eth can’t die. Even dead it will live. Unless something better comes along, but that would be a somewhat lengthy transition because eth is just code so it can incorporate everything and because the newcomer will have to set-up all this infrastructure.

Eth of course has the second biggest infrastructure after bitcoin and the second biggest liquidity. It is is the only other crypto that acts as a base pair for tokens in particular, but also other coins.

For BCH, the answer is a bit more complicated. When BCH forked, bitcoin roared, so they’re complementary. Their focus on merchant adoption kind of feeds back into bitcoin. Good cryptos lift each other up.

BSV, however, is not a good crypto and has dragged BCH down and down to now below litecoin. Sad perhaps, or maybe BCH became too much of a mess to handle a bear market. Whether it will survive remains to be seen. There is a question of whether it can and maybe even whether it should under the current branding.

Perhaps both BCH and ETC should rename themselves, with the question of whether ETC can survive being even more difficult. Their one selling point might be as an eth backup, but you just fork eth and there you have the backup with now a bigger community since there is more shared history. Meaning the coin has no point.

Zcash might be far too niche with its tech incorporated in eth already through smart contracts. Not inbuilt privacy, but if that’s the only use case then that’s a niche of a niche. Same for monero and other anon coins.

EOS is a mess. Fundamentally flawed in that it requires trust because the miners/stackers or as they call em block producers (BPs), can and have colluded.

The idea there however isn’t too bad. The execution is. The idea there is that they trust these 21 entities and in return get capacity, speed and cheap transactions.

Same for Tron. Their problem is the design is very unfair and can’t compete with eth staking once it goes out from an incentives or realpolitik point of view.

That’s because in EOS/Tron, only these 21 entities get all the money – millions if not billions a year – as a reward for providing the capacity resources. In eth, it will be everyone who wants to lock up eth, giving it some real utility and an equitable design, although the more you have the more the reward, but also the more risked. So it’s not communism, but capitalism.

Meaning that if you were smart and you wanted to build a blockchain project, you probably wouldn’t be sure whether it would last in eos or tron since their long term use case might not be very sound in light of more equitable alternatives where incentives play their part to make people choose it.

Cardano is an academic project in development since academia begun. Yes, our readers are smart so we won’t mention we’re being edgy (from which we refrain because it can be too edgy and fall flat).

Anyway, their idea is to have a currency layer and a smart contract layer. So you have bitcoin and you have eth both in the same network.

What that means exactly isn’t very clear. There is the eth (bitcoin) layer and the smart contract layer in ethereum, so on the surface it sounds like just a marketing gimmick with the only difference being that they have peer-reviewed papers.

Eth has some of the best academics who have written some peer-reviewed papers, but they don’t need some guild’s paper certificate. Not that the certificate doesn’t serve a role to quickly signal, but where building the future is concerned, quick signaling might not be a feature as we’d rather have sound trust, but verify.

The only thing that stands out about Ripple is their trusted consensus system which kind of works if you like trusting. Problem is you can’t verify much, so there’s too much trusting. They have no smart contracts, nor does stellar, so they’re bitcoin, but without the infrastructure, without the blockchain innovation and so on.

They may hang around because Ripple Labs has about 50 billion xrp to sell, but devs don’t have any xrp toys to play with, it’s boring.

For tokens, there are some decent projects, but it may be the case that any token which doesn’t have any actual utility – or doesn’t bring any actual benefit from an independent point of view – will perhaps no longer hang around as the token might be forked off.

OMG, for example, doesn’t really need a token for its Plasma. Now Plasma is a bit complicated, but it is sort of like the Lightning Network and LN of course doesn’t need a token. You can squeeze one in there, but if someone forks it off, then how do you compete?

MKR, on the other hand, acts as the banker of last resort for DAI. If things go wrong, then MKR holders have to move in to try and make them right again. You fork MKR, then you’ve taken out something that conceptually is beneficial, so you can’t compete. You can clone it, but that’s a bit pointless unless you’re adding some real benefit which MKR can’t incorporate for whatever reason.

Then there’s tokens like SAN. That gives you access to blockchain stats. If we were SAN, we wouldn’t have the stats part be open source because why should we. It takes effort to produce it and they are trying to run a business, or so you’d think.

For a token like SAN to make any sense, and we’re using SAN, lets be a bit more neutral. Lets say Trustnodes launches a token that SEC is cool with and everything, so allowing us to focus on the business aspect only.

Now we could for example make our paywall payable only with TN, but why should we limit our potential readers or more widely business customers? If they want to pay, they can pay with whatever they like.

So the token doesn’t have any utility in that respect if we want to make money, as in increase revenue and profits to allow us to provide more news, investigative reports and so on or for SAN more data, analysis etc.

The token here really is basically a share. The problem there is how to make it really be a share. As in you get parts of profits in dividends, you get voting rights and so on.

The token aspect is easy, but it quickly stops becoming natively digital when we’re paying employees and so on, calculating revenue, profits, or holding votes etc. On the other hand, once we manually calculate profits, it would be fairly easy for us to use some of those profits to buy x amount of TN and airdrop it to TN holders.

So there are benefits, there are efficiency gains and so on, but there are also some wheels that don’t need to be re-invented. We would for example, not have to but we would want to tell investors that revenue was x, x were profits, this grew and so on.

We wouldn’t want to do so if profits fell. Trustnodes would never, but there are some who would completely make up the numbers. So we would want something like SEC to threaten prison or civil proceedings, just as we would want a genuine start-up to be able to raise money from the public to the benefit of the start-up and the public.

So some wheels don’t need to be re-invented, but they do need to be brought to this century, to be refined and look cool, rather than stay arcane, made of wood, looking old and pfff.

These sort of equity tokens can survive and even thrive perhaps more than some stocks if they do objectively look at their business use case and do sort of behave honestly in dryingly informing their investors and do provide dividends.

Understandably right now many of them might not want to because growth is currently limited due to the limited capacity, but they shouldn’t dismiss the intelligence of their investors. Simply voluntarily revealing such information may make many of them look more closely.

The investors, moreover, are cryptonians so they would know one can’t expect profits at this stage or huge user numbers, but they might see trends and they might make their own decisions on potential future growth and so on.

Plus they would value the accountability and the feedback that revealing such information would provide because the project will then have to think of what they are doing, what has gone wrong, how they can get growth and so on, with investors able to give feedback.

Those projects that do take a more professional attitude in seeing what the token can add and where the token has no inventiveness (thus established practices should be incorporated), might be able to decouple by standing on their own two feet due to being judged by their own growth prospects.

Those projects that continue to pretend there is no need for accountability might whither because investors have learned their lessons and they do want to have some sort of idea of how the project is really doing so that they don’t shoot in the dark and effectively gamble, but instead make a calculated investment.

Finally, there are those tokens where the token itself is the business model, like BAT. These too do require yearly reports with raw numbers, but they are a bit different because at some point the system might run by itself.

We do not know how BAT’s ad model runs exactly. Presumably there will need to be someone that filters what ad is shown, at what price, and so on. That someone probably has more information than others, so should reveal how the number of advertisers is growing and so on.

One can also see a design where there’s some sort of form that advertisers complete and it’s all automatic. That however would have many problems in regards to not just illegal ads, but things we really do not want like virused ads.

Unfair to single out BAT, but someone has to stand out for this class and whether BAT does or does not recover probably would depend on whether their business model does make any sense. That would be shown by whether advertiser numbers are growing, whether people are viewing ads, whether publishers are seeing any difference to say adsense or direct ads and so on.

The conclusion ultimately is that there needs to be some sort of realism. That just having a token is not even the beginning as you then have to deliver value as judged by the market.

This realism is just about in time. As someone said, eth is currently just a prototype or as we’d describe it, current dapps are the MS Paint of 1995.

All these projects showed what can be done, but now they need to do it and properly. Get their house in order so to speak and get ready for hopefully 10x capacity this summer and then 1000x or more.

Reality in a way is sort of imposing itself and is saying you can’t debut like this to the world. You had your fun, you saw what can be done, but now you need to sharpen up because you might have been playing with say 100 users, but if we’re talking millions, you know, there needs to be responsibility, there needs to be accountability, there needs to be professionalism.

Those that can hear and do, will probably not only survive, but thrive. Others might wither. Which is which, time will tell.

Copyrights Trustnodes.com


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