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IMPORTANT: This post should not be taken as investment advice. The writer focuses on the best coins in terms of actual use and adoption—not from a financial or investment perspective. During 2017, crypto markets set the new standard for easy profits. Just about every coin or token realized amazing returns. Surging prices created a positive feedback loop, attracting ever more capital into crypto.
Unfortunately but inevitably, this runaway market led to massive malinvestment. Money was thrown indiscriminately into all kinds of dubious projects, many of which won’t bear fruit. In the current bearish environment, hype and greed are replaced by critical evaluation and caution. Particularly for those who’ve lost money, marketing promises, endless shilling, and charismatic spokespeople are no longer sufficient. Good, fundamental reasons for buying or holding a coin are once again paramount. Coin Adoption While a cryptocurrency’s technology or an ICO’s business plan may seem amazing, without users, they’re just dead projects. It’s often forgotten that widespread acceptance is an essential property of money.
Whereas fiat acceptance is mandated by the state, the acceptance of crypto is purely voluntary. Many factors play into the decision to accept a coin, but perhaps the most important consideration is the probability that others will accept the coin. Security Decentralization is critical to the trustless model of a true cryptocurrency. Without decentralization, one has something more akin to a Ponzi scheme than a true cryptocurrency. Trust in individuals or institutions is the problem—one cryptocurrency attempts to solve. If a coin’s mining operation or some central controller can alter the transactional record, this calls into question its basic security.
The same is true for coins with unproven code that hasn’t been thoroughly battle-tested over the years. The more the code can be relied upon to function as described, regardless of human influence, the higher a coin’s security. Innovation Worthwhile coins strive to improve their technology but not at the expense of security. Real technological progress is rare because it demands a great deal of expertise—and also wisdom. While there are always cool ideas that can be bolted on, if doing so introduces vulnerabilities or detracts from a coin’s original purpose, it misses the point. Innovation can be a hard factor to assess, particularly for nontechnical users.