Cryptocurrency Investment Market

The general consensus right now is that the currencies are in a gigantic bubble. That being said, I am personally heavily invested in cryptocurrency. They are the future, nobody can deny that, so then it is more of a matter of figuring out which one you want.

My favorite is Steem. I like that it allows me to get payed for my blog posts, but more importantly it has an underlying value (the value of the content). That helps to stabilize its market. I also like that it works more like a traditional market system, rewarding those who are already holding the most of the currency, further raising the stability.

Bitcoin is classic, and due to its popularity, I see it increasing in value for a very long time. I would worry about it being replaced by a newer, better currency, but Bitcoin is a social icon. Furthermore, the issue cap has pretty much been reached.

Ethereum has been seen pretty widely as the next-gen version of Bitcoin, especially as their smart contracts would greatly increase the potential of cryptocurrency. However, some people are pointing out a few issues.

ONE:CRYPTOCURRENCY ICOS ARE A RISK

Even though virtually every company or project looking to raise money wishes to conduct an Ethereum-based ICO, these >crowdsales can have negative repercussions. A lot of these projects will eventually liquidate the amount of ETH raised and >dump it all on the market. Not only will this affect the Ether price negatively, but it also shows Ethereum is merely a facilitator >to raise funds, rather than technology in which these companies believe.

It is only a matter of time until the influx of cryptocurrency ICOs backfires on the Ethereum ecosystem. There is no guarantee >that any of these projects have legitimate intentions, and any bad PR will automatically taint Ethereum’s reputation further. >While it is true that Ether allows people from all over the world to invest in ICOs, there is never a guarantee for success.

TWO: EXPLOITS AND WEAKNESSES

Even though many companies have joined the Ethereum Enterprise Alliance, they are not necessarily aware of the issues this >network has. We have seen two major exploits discovered and used, both of which resulted in massive amounts of funds >being stolen. The first exploit was the DAO smart contract bug, and the second exploit showed how Ethereum has no secure >multisignature wallet solution currently. Immature technology often suffers from issues like these.

THREE: NO SUPPLY CAP

Contrary to what some people may assume, there is no official hard cap on the amount of ETH. While proof-of-work will be >replaced by proof-of-stake in the future, Ethereum will continue to be inflationary as a result. Unlike Bitcoin, with its 21 >million hard cap, Ethereum has no fixed maximum supply. This means the value of every individual ETH lowers every time a >new coin is brought into circulation. In this regard, Ethereum is quite similar to fiat currencies, even though its level of >inflation is significantly lower.

FOUR: NOT AN IMMUTABLE BLOCKCHAIN

The main selling point of Ethereum is how it provides blockchain technology and new features to the entire world. One of the >primary aspects of using a blockchain is that this ledger creates an undisputed record of events which can no longer be >altered once the information has been accepted and confirmed by the rest of the network. That is no longer the case for >Ethereum, and it is surprising how few people recognize this important detail.

Ethereum’s developers introduced a hard fork after the DAO was hacked. This hack put a large amount of the available ETH >supply at risk of falling into the wrong hands. The hard fork also removed the immutability aspect of the Ethereum >blockchain. This means that any application or project built on top of the Ethereum blockchain could see part of its history or >transactions wiped out if a similar incident were to occur. People looking for the immutable Ethereum blockchain should >look into Ethereum Classic, which was maintained as an ideological opposition to this blockchain rollback.>

Hope that helps!