Investing in the future of Cryptocurrencies

I originally wrote this post on Quora dated December 11, 2017.

The blockchain is one of the greatest inventions in the history of mankind.

Blockchain technology has been designed to provide a layer of trust over the internet. This layer of trust is not only enabling many possibilities for different industries but also enhancing their performance by adding fundamentally new capabilities.

The Blockchain is likely to disrupt many Industries in the coming five to ten years. But Blockchain has to improve on par with the existing technologies used by the industries. There are many challenges surrounding the blockchain in its current iteration like Scalability, Reliability, Security, Cost-effectiveness to name a few.

Whenever I invest in a coin/token/project, I try not to look at the use cases on Blockchain itself but I try to find out which one of them are focusing on solving the above-mentioned problems, the fundamental problems of Blockchain, and then let it reflect upon the project I’m investing.

  1. Can it solve one of these problems?
  2. If Yes, then how?
  3. Are the team members capable of successfully executing the solution?
  4. What are their competitions?
  5. Any progress to date?
  6. What’s their governance mechanism? (*IMPORTANT)
  7. What is the utility of their token? (Crypto-economics)

I’ve found after thorough research that, some of the upcoming technologies on Blockchain that may solve the Blockchain’s fundamental problems are the ones who will shape the future of the Blockchain. We may bring as many use cases on existing Blockchain as we can but if we couldn’t build a strong foundation, the entire ecosystem will eventually collapse and we will be left in nothingness.

And, I found out that the aspects that may eventually shape the future of Blockchain based global and universal economies are:

  1. Projects with the most efficient governance mechanism, neither anarchical Decentralization nor totalitarian governance, but something in between. We can never harness the full power of Blockchain with complete decentralization or total centralization. It’s a cold hard truth. An actionable and well-governed system is the key to longevity, growth and stability. Some of the projects I like with efficient governance systems are Tezos, Polkadot, Cardano etc.
  2. Project with Interoperability and Cross Chain Bridge communication. I won’t go into the technical details but in a nutshell, the idea of interoperability is Every isolated blockchain can communicate with each other thus pushing blockchain to greater scalability and mainstream adoption. Some of the projects I’m interested in are ICON, ChainLink, ARK, Cardano, Cosmos, Polkadot etc.
  3. Projects with Off-chain scaling solutions. Another great idea to solve the scalability problem. Some of the projects I’m interested in Raiden Network for Ethereum, Lightning Network for Bitcoin, Trinity for NEO etc.
  4. Projects with Child chain and multi-chain functionalities. It’s the concept of the main chain and multi-layer side chains to handle various commercial scenarios. One chain is designed for one use case, distributing different tasks on multiple chains and improve processing efficiency. Some of the projects I’m interested in are Waltonchain, aelf, Cosmos, Polkadot etc.
  5. DAG based Blockchains like IOTA, RaiBlocks, Hshare for infinite scalability and fee-less transactions.

These are the technologies that may/(if I may be optimistic) will change the way we interact with the technological universe. I suggest you do your own due diligence and invest in the projects you strongly believe in, the project that might change the future, That’s why I always say.



Disclaimer: This post is for educational and informational purposes only and not to be considered as an investment advice. I’m neither endorsing nor promoting any of the projects mentioned in this post. You should consult with a financial advisor or other professional to determine what may be best for your individual needs and risk tolerance. Always do your own research.

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