Upcoming IDO (Aug 9th) on SpaceStarter - CrypCade Metaverse
Disclaimer: **I hold MILK2 and SHAKE**, and I’m super bullish on them, but those opinions are not financial advices and always **DYOR** before making investment decisions
Despite the market conditions, SpaceSwap team keep building the ecosystem and bring great investment opportunity for the community, what a great pleasure to be part of this great project!
Let’s see some details of this upcoming IDO. In short, THIS IS HUGE!!!
***The IDO Start from Aug 9th!!!FCFS!!!***
I will quote some research published by SpaceSwap team and give the original link.
1. What is the difference between CrypCade and other metaver project?
**One of the biggest differences is that CrypCade offers real businesses a platform for entering into the metaverse and moreover**, the ability to appeal to a larger audience in real time.
2. Brief review
**CrypCade is an entertainment ecosystem that provides the ultimate gaming and entertainment experience to users in a metaverse environment.**
With over 300 different characters, the CrypCade metaverse is a complete and functional ecosystem. The characters are divided into 5 factions: Shadow, Android, Terran, Metahuman and Outworld. Each character has a set of skills that will come in handy for the upcoming P2E games.
Besides characters, users can create their own realistic 3D NFT avatars. Choose between hundreds of unique characters, factions and rarity levels. Every NFT character has a 1:1 metaverse avatar correspondent that you won’t find anywhere else!
3. Tokenomics
**The main purpose of the iCade token is to provide access to a share of the Dividend Pool by freezing tokens in order to convert them into shares in the pool.**
**Part of the pool will be distributed daily to the development fund and the shareholders**, with a smaller share set aside for daily prizes, leaderboard contests and giveaways, which will lead to a daily passive income for the user.
The rest of the pool will roll over to the next round and replenish the pool, allowing users to use the pre-filled pool for the next daily payout and to ensure the mechanism runs smoothly and continuously.
The total offer is 1,000,000,000 ICADE, where 20% is allocated for Play-to-Earn, 15% for staking and farming, 12% for marketing and the team, 8% for a private round, 5% for ecosystem development, a seed round, liquidity and only 3% for the public round, DAO reserve and advisors.
4. Partners, investors, and backers
The project is very interesting and promising. From the list of backers, we see funds such as: Block Brands, Boundless Ventures, CoinVestor, CryptoZilla, R-930 Capital, MH Ventures, Zephyrus Capital and others.
Have any other questions regarding to CrypCade? Join the AMA with CrypCade in SpaceSwap telegram group (July 14th, 12pm UTC): https://t.me/SpaceSwap
The original article link: https://medium.com/spaceswap-defi/crypcade-ido-why-should-you-take-a-closer-look-at-this-project-e82d092b77c5
SpaceSwap Twitter: https://twitter.com/spaceswapdefi
SpaceSwap Telegram: https://t.me/SpaceSwap
SpaceStarter: the Launchpad of SpaceSwap, A 300X+ Hidden GEM
Project name: Spaceswap
Category: Defi Platform
Disclaimer: **I hold MILK2 and SHAKE**, and I’m super bullish on them, but those opinions are not financial advices and always **DYOR** before making investment decisions
As previous article mentioned, SpaceSwap has multiple products & service that generates continuous cash flows, and that’s why this project is so attractive to me: it generates real values.
Today I’ll introduce the launchpad within SpaceSwap ecosystem, and it’s really amazing.
There are many launchpad on the market, so what make SpaceStarter unique? Or what’s the competitive advantages of SpaceStarter? In short, the team of SpaceSwap is experienced and responsible, and besides that, let’s take a closer look into SpaceStarter.
1. Project Selection
SpaceStarter is a young and rising launchpad, so the number of IDO on it is still very limited, but the projects that been selected are all with high qualities, which means they have strict standards on the project selection. Thus, I’m pretty confident on all projects that launch on SpaceStarter (but I recommend to DYOR before any investment) and believe it will brings great returns in the long term.
2. Unique Features
SpaceStarter has unique services for IDO projects. Specifically, projects could purchase the farming and staking service, which mean they do not have to develop farming and staking functions, and could have their own farming pools and staking functions by just pay small fees in MILK2.
Of course, projects that do not hold IDO on SpaceSwap could also purchase those service, cause they are part of SpaceSwap SaaS.
3. Post-IDO Cooperation
Another thing that impress me is that the relationship between SpaceSwap team and those projects hold IDO on SpaceStarter.
I’ve seen SpaceSwap keep cooperate with those projects even after the IDO, so we can imagine that the partners of SpaceSwap will increase rapidly. For example, SpaceSwap help their first IDO project to collaborate with Sidus Heroes, the big blockchain game project backed by many big ventures.
In summary, the SpaceStarter not only generate revenue for SpaceSwap, but also help to grow the SpaceSwap ecosystem, and the most important thing is, they alway bring the best projects for investors!
I hope they could update their tier system with guaranteed tiers ASAP, and I will definitely get enough MILK2 to be eligible for guaranteed tiers!
SpaceSwap Twitter: https://twitter.com/spaceswapdefi
SpaceSwap Telegram: https://t.me/SpaceSwap
Dive into a solid crypto project with 300x or more potentials
Project name: Spaceswap
Category: Defi Platform
Disclaimer: I hold MILK2 and SHAKE, and I’m super bullish on them, but those opinions are not financial advices and always DYOR before making investment decisions
**Introduction**
*Spaceswap* is a defi platform with a great ecosystem, and wait, you may think that defi is not a new topic and why Spaceswap is attractive.
Yeah defi is not a new topic, but it is still early. Actually, the whole crypto industry is still early cause real applications & utilities of crypto just starting emerge, and defi (Defi+) will definitely be the top one, always.
For me, I’m not really care about the project is hot or not at the moment, cause TBH I’m not a good trader (short time investor), so I’m mainly (or only maybe) invested in two types of crypto projects:
1. Renowned projects:
Those projects are well known, and have relatively low risk in crypto worlds, such as BTC, ETH and BNB, etc.
2. Growth projects with strong fundamentals:
This kind of projects have higher risks, but also much higher potential returns. If you lucky invested a successful projects in early stage, it’s very possible to achieve X100 or even more returns.
The key of identify those projects in early stage is to look at the fundamentals, and then buy & hold.
What are the fundamentals of a crypto project? IMO you must learn the following factors before you invest: sector, team, technology, ecosystem, roadmap, and partners.
Let’s see why I’m so excited about Spaceswap.
**Team**
It is important and essential to have a strong team behind the project. After all, investing in early stage crypto projects is like angel investing/venture investing, and it’s kind of like investing in people. A strong team could build things much better and faster than a weak and unexperienced team.
Spaceswap has a brilliant team with rich experience in entrepreneur and Defi area. They have experience in both bull market and bear market, and know how to build and when to deliver products.
You could check the info of team on the website of Spaceswap.
**Technology**
Although I’m not the tech expert but I love to invest in projects with cutting edge technologies.
Spaceswap team are really good at technology research & development, and they already have a game-changing technology called “shadow staking”, which not only save users gas fees but also increase the security of staking & farming.
Moreover, I believe this technology could apply to GameFi & Metaverse area and make a huge impact in the future.
**Ecosystem & Partners**
The ecosystem and partners is another important factor. A project is hard to achieve big success without strong support from community, ecosystem, and partners.
The ecosystem of Spaceswap is amazing, it contains Defi platform, NFT market place (NFTSTARS), and Gamefi & Metaverse (Sidus Heroes) projects (backed by renowned ventures) that supports each other, not only in terms of community sharing, but also tech & resources mutual supporting.
**Products & Service**
This is the most important part of a project, cause that’s where revenue generated.
Let’s see what products & service Spaceswap got:
1. Farming Pool
2. SaaS
3. Launchpad
4. PAE Games & Metaverse (in progress)
5. Lending Protocol (TBA)
6. More to come…
As we can see, they have lots of products that could generate continuous revenue and this is the kind of projects I love.
I may give detailed analysis of those projects in the future.
**Long term price analysis**
In short, even in my most conservative assumption, the long term price of MILK2 will be above $10.
The valuation of a project depends on its products & service, and launchpad, Metaverse, and lending platform all have the potential to achieve billion dollars valuation, especially in a crypto bull market, so as Spaceswap keep improve its product & service, the valuation of the whole platform is very possible to pass $1B. Moreover, even if we give a 90% discount on our analysis, which means the valuation of the whole platform will only be $100M in the future, which is actually consider a small project in the bull market, the price of MILK2 could still be over $10 in the long run, why?
The max supply of MILK2 is 65.2M and keep decreasing, and the total supply of MILK2 will be around 20M after all SHAKE been mint. Thus, combined with other burning feature, I would say the total supply of MILK2 will be less than 10M in the long term, so it’s pretty safe that the MILK2 will be over $10 in the long term IMO (requires around $200M market cap, or even less).
That is more than 300X from now…
TBH I’m very jealous to those investors who could buy MILK2 at current price…
Finally, always make sure you invest in a project after **DYOR**.
Good opportunity for long term holders
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Do you think the market cap of ETH could get close or even surpass BTC during this bull market?
Congrats for across $50,000
From my point of view, the value of bitcoin is the store of value, not as a payment method. Actually, bitcoin is far from an ideal payment method, not even close!
Moreover, don't forgot the regulation issues. Some people keep saying bitcoin will replace the fiat money and that's an illusion to me and makes me LoL. Please refer how Paypal integrate bitcoin as a payment method, and that's the ultimate form for bitcoin as a payment method (if it could receive bitcoins from other wallets).
By the way, how many of you buy bitcoins because you think it makes your payment activities more convenient? come on.
2021: Bitcoin or Altcoin?
In the previous article, I have analysis the intrinsic value of bitcoin. According to the experience from 2017, the market cap of altcoins also should increase a lot, but in the past year, we can see bitcoin dominance has continuous increase, so in 2021, which investment has higher rewards potential? bitcoin or altcoin?
PS the increase of bitcoin dominance means the real bull market is yet to come, because people still fear of risks, which leads more money flow to bitcoin.
From my point of view, bitcoin has relatively lower risk (compared with other cryptos) with lower return (in a bull market) whereas altcoins have higher risk with higher return. In summary:
**if you prefer lower risk, mid or long term investing, and do not want to spend much time on cryptos research, then bitcoin is your choice.** Through the past years, bitcoin has formed a strong consensus and thus has intrinsic value, which means **bitcoin will not become worthless even in a bear market.** Actually, bitcoin's "value store" feature will be more apparent in a bear market, which means bitcoin will outperform most cryptos in a bear market.
if you are actively involved in crypto markets and want to pursue higher returns (also could afford higher risks), then you should pay more attention on altcoins.
Crypto market is full of opportunities, but it also has high risks: most crypto projects are worthless (given there are thousands of them). So if you want to invest in altcoins, how to find a good crypto project? I think you have to consider following aspects, at least.
industry (application area): I like top-down analysis and find the right industry (application area) first, and the possibility of the success of a project will much higher if it is in a right or promising industry.
core team: **a responsible team is the premise of the success of a project**. Of course, if the team also have strong influence or rich experience in the blockchain industry will be the best, but to me, responsibility is the most important quality of a team.
some team may said that the success of a project depended on the community, not the developing team, and they like to use bitcoin as the example - "bitcoin community is decentralised, and there is no one team could control or lead the community, so whether the projects would success should depends on the community, not the developing team". To some degree, the statement above is reasonable - **the success of the projects does depends on the community. But to me, I don't really like the team that make the statement above, because it sounds a little bit irresponsible.** Bitcoin community is so unique that almost no other crypto community could compared (at least currently), because the consensus of bitcoin community is formed through many years.
technical advantages: frankly, technical barriers are to necessary to many crypto projects, but with technical advantages, a crypto project will have much higher successful rate (I like the projects with technical advantages).
Marketing ability: compared to technical advantages, marketing ability is more important to the most crypto projects, **because currently, many (if not most) crypto investors still focus much more on price increased, rather than the value generated.** In other words, many (if not most) crypto investors just care about the price of coins, and that's leads to the importance of marketing: the more widely a crypto project be known, the more likely its market cap could increased (especially in a bull market).
**Reminder**: given the importance of marketing, lots of crypto projects will exaggerate the advantages or even be a completely scam. So do your homework before investing, especially towards small crypto projects.
If you want to find more valuable crypto projects, which industries are promising and have great investment opportunities within it?
digital gold (value store cryptos): bitcoin is the king in this category, because it has the strongest consensus among all cryptos, with fixed supply feature. Actually, this category do not have much eligible cryptos, and besides bitcoin, BCH and litecoin also have huge long-term value.
public chain: this category is my favorite, and public chain projects have huge value if its ecosystem build successfully. ETH is the king in this category, but does other public chain projects still have chance? I think so, and we could keep an eye on the high performance public chain project. But remember, **the success of a public chain not only depend on its technology, but also its marketing ability (ecosystem).**
reminder: as the king of public chain, ETH has huge potentials and is very likely to outperform most cryptos, especially in a bull market.
exchange token: exchange tokens are more like traditional financial assets and could easier to do the valuation through traditional methods, because they have solid cash flows. So If you prefer lower risk investments, you could keep an eye on the big exchange's token, including DEX token, such as BNB, HT, OK coin, Uni, Sushi, etc.(DEX token should have higher risk than big centralised exchange token) To evaluate those coins, you should focusing on the **trading volume and the burning mechanism** (token supply changes).
Defi: the problem of most crypto projects is the lack of real applications, in other words, lack the ability to generate real value. As a value investor, I don't like invest in assets that "hot but lack of real value", so I keep thinking which area could be promising for cryptos, and Defi is one of the most promising area. **Defi is a great concept, but please keep an eye on regulations!** some ineligible Defi projects may become worthless instantly after government put them into "blacklist".
**reminder**: Defi is a great application of cryptos, but with the introduce of lending, leverage, mortgage, and other financial concept, the crypto markets may become more volatile, so control the risk and don't invest more than you could afford.
NFT: NFT is another promising area for crypto, actually, I think it could compare to Defi. But this area also involved relatively high risk: the value of NFT is primarily determined by the consensus, and it is also highly related to the NFT project, so its better to choose the right project.
game: game is also a great application area for cryptos, but given the constrain of the current public chain, it's not easy to develop an large blockchain game. I'm not an expert on blockchain games, but as far as I know, the current blockchain game is much "simpler" than the traditional games. **The advantages of blockchain game is the incentives, and its very promising to combine the NFT concept with games.** Although I've not find a successful example in the game area yet (top 30 or 50 projects), but I believe there will be some great blockchain games in the future.
Of course there are other good applications of crypto, but the basic idea is to see whether it could generate real value with a sustainable business model, and avoid the projects that only have concept, even its hot (if you are an expert in short term trading, just ignore my suggestions). **Remember, it's very easy to create a crypto projects with the introduce of smart contract, and most small projects will dead eventually, just like the startups in the real world.**
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You could refer my **previous article** to learn more about the value of these two projects. https://read.cash/@Galaxy/bee-network-the-valuable-crypto-you-could-easily-mined-on-your-phone-e2385a35
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What is the value of Bitcoin?
There are lots of people believe in the value of bitcoin, so do I. **I believe bitcoin has long-term value**, but what's the intrinsic value of bitcoin? There are some "bitcoin enthusiast" blindly believe in bitcoin without any valuable points, for example, they keep saying bitcoin will worth $1M or even $1B in the further, mainly based on the following reasons:
digital gold: bitcoin has fixed 21M supply, so it is the best way to fight inflation.
blockchain revolution: blockchain is an emerging technology, so bitcoin price will benefit from the development of blockchain technology.
price history: they always talked about if you buy $1 bitcoin several years ago, you will become millionaires now. If these patterns repeats, bitcoin will worth millions dollars several years later, so what are you waiting for? anyone who bearish bitcoin in the past are regret now.
I believe the value of bitcoin, but I don't agree with those guys, many of them are just gamblers and their "investment strategy" is "buy and pray". From my point of view, those features are not the intrinsic value of bitcoin.
**fixed supply does not means value**: fixed supply is a good feature but a crypto cannot generate value just because its supply is fixed.
**blockchain is not equal to bitcoin**: Bitcoin is the first cryptocurrency and also the first application of blockchain technology, with the development of blockchain technology, more and more people get to known about bitcoin (of course, many people know blockchain through bitcoin), thus, bitcoin do have a unique place in the blockchain world. But please remember, bitcoin is closely related to blockchain, but blockchain is not all about bitcoin
**do not just focus on the price, focus on the market cap**: bitcoin price did increased a lot in the past few years, but that does not mean it will continue to increase that much in the future. We should focus on market cap rather than price. With 21M supplies, if bitcoin price goes to $1M, then the total market cap of bitcoin is over 20 trillion dollars, and what does that mean? for comparison, the top 500 U.S. companies market cap is around 33 trillion dollars and the total U.S. equity market cap is around 50 trillion dollars, by the way, the global gold market cap is around 10 trillion dollars. Do you still think bitcoin price could easily goes to $1M? or even $1B?
So **what's the intrinsic value of bitcoin? in my opinion, is consensus**. Given the constrain of the network performance, bitcoin itself can't generate much commercial value (7 tps is too slow for large commercial applications), but bitcoin has its unique competitiveness: the consensus. Why? because of the first mover advantage: most people know cryptos or blockchain through bitcoin, and thus it forms a strong consensus (strongest among all cryptos). So I do agree that bitcoin will act like "digital gold", in other words, **in the future, the biggest value of bitcoin will not shows in commercial usage, but in "value store" function, just like gold.**
I have to clarify two things here:
some people may claim that bitcoin will replace fiat money in the future, which means bitcoin will be the only "general currency"(like euro to europe) while no fiat money exist in the future, and thus bitcoin price will soar to the sky. I think that is totally an illusion and will not become true. **Firstly, the performance of bitcoin network cannot supports such high transactions efficiently**: as the payment activities in the bitcoin blockchain increasing, the network will become slower and the transaction fees will increase a lot. In other words, bitcoin' network is unfriendly to large amount transaction, and bitcoin is far from an ideal payment currency. Actually, banks can adopt blockchain technology to improve the current payment system. **Secondly,** **Never forgot regulations!** even if bitcoin's network could support large amount transactions, it still cannot be the "general currency" of the world because of the regulations. It is not because governments are bad, but because the core financial system must be centralised, otherwise, the government cannot stimulates economy when facing crisis. **Decentralised economy will not fully replace centralised economy, they will coexist in the future.**
Crypto market is full of opportunities, and different crypto project has different value. **Bitcoin is not suitable for large commercial applications, but that's not means no crypto projects are suitable for that**
Blockchain is an revolutionary technology, so as the token economies. But we should not blindly bullish bitcoin, rather, we should make our own analysis and have our own investment strategy.
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It's time to stop FOMO and looking for valuable crypto projects, please let me know if you have any recommendations, thanks!
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BTC is near $40000, what a crazy market! I'm extremely interested in cryptos but prefer to buy low, and current price level prevent me from investing more...just need to be clear that I think BTC worth more than $40000 in the long-term, but it may face a pullback in the short-term. I just not comfortable with current risk level.
Bitcoin are facing short-term pullback risk, so long-term investors should avoid FOMO at this time and have patience, at least not all in cryptos at this price level.
Happy New Year! hope we could find more valuable projects in 2021!
Coinbase and other famous exchanges are going to delist XRP. Some XRP fans may think it is a good opportunity to buy, but I don't think so: the risk related to XRP is too high and cannot compensate by its potential rewards. In the bull market, there are so many valuable coins worth to invest, why do you only focus on XRP?
The crypto market keep soaring recently, mainly because of the bitcoin. In the long-term, bitcoin and other valuable cryptos still have huge potentials, but in short-term, the market do has pull back risk. Invest under your own risk-tolerance
If you are a long-term investor, do not buy XRP; but if you are a short-term trader, the high volatility of XRP should be your target crypto recently.
The trouble of XRP not only comes from the SEC, but also from its own.
PayPal will allow its customers using four cryptos as payment method next year, and the four cryptos are BTC, ETH, BCH, LTC. It shows that XRP do not have unique advantages in the payment area, which is its only application scenario, and that's why I'm not interest in XRP. You may refer my detailed analysis on XRP
BTC outperformed most other cryptos today, but this is not a common situation given that most cryptos, including top coins, were declined while BTC rose.
This suggested that the market sentiment is not bullish enough yet, but the demand for BTC continuous increased, which is a good sign for the whole crypto market.
Currently is a good time to gradually purchase the cryptos but DO NOT all in! DO NOT use leverage! there's still relatively high risk in the future.
IFP and the upcoming BCH fork
This article contains four part:
the upcoming BCH fork
what is IFP
why IFP lead to a hard fork
is BCH still worth to invest after the fork
The upcoming BCH fork
11/15 is a big day to BCH community, because it is very likely to see a hard fork of BCH on that day.
What is IFP?
The IFP is the infrastructure funding plan, it enforce a certain amount (changed many times) of block reward to be donated to a set of addresses (developers).
Why IFP lead to a hard fork?
Actually, the basic idea behind IFP is good for BCH given that the developers are the same important as miners. Why the developers are so important? because BCH needs more business applications in its ecosystem, which needs more developers to contribute, and if developers could get rewards by their meaningful work, they will have more incentives to contribute, which is the same logic for miners.
you could also refer this article about the value of BCH: ***The reasons that I turned bullish on BCH*** https://read.cash/@Galaxy/the-reasons-that-i-turned-bullish-on-bch-7812551b
**But the IFP is a bad plan, not because of the donation amount (to the developers), but because of the way to introduce it.**
The first draft of IFP incurs strong resistance in the BCH community, partly because (from my point of view) there are no explanation on how to determine 12.5% is the reasonable amount, as well as no funding usage plan was released.
After the strong resistance from the community, the leading developer of bitcoin ABC, Amaury Sechet, still force to implement a revised plan, which not include BU team (who oppose the IFP) in the beneficiary list. **This is a really bad move**. At this point, the IFP is totally a war between the bitcoin ABC team and the BCH community.
What make me shocked is that Amaury claiming that "he won't see any problem even if 100% of the donation goes to ABC team" given the ABC team made a great contribution to BCH.
A better way to introduce IFP is to release the draft with detailed explanation on:
why this plan is good to BCH in the long term.
how to determine the donation amount
the detailed funding usage plan, including who can received the donation, based on what criteria.
What's more important after released the first draft of IFP is to listen to the community's opinions, and it may need months or even more time to determine a reasonable IFP without tearing the community into apart.
From my point of view, **the best way to implement the idea behind the IFP is not introducing IFP, because not all miners are willing to donate to developers.** The donation should be optional, so **establish a donation fund focus on rewarding developers based on predetermined criteria should be the best way.**
Is BCH still worth to invest after the fork?
**If you are a long-term BCH investor, YES!** But in short-term, the BCH price will definitely be impacted (but with a free candy instead).
In theory, after the hard fork, the market cap of BCH plus the market cap of 'BCH ABC coin' (forked) would equal to the market cap of original BCH, given the original BCH community split into two communities, whereas the computing power and the developers remains the same.
But in reality, of course, the thing will get more complicated. It is very likely that the new BCH will soon recover (partly depend on the market condition) its previous value given the strong 'brand' and the consensus of the BCH. Moreover, almost all the influential BCH supporters are oppose IFP now so that the BCH community will stay together and remain most of its value after the fork (except the ABC team and their supporters). But the new forked coin, let's call it 'BCH ABC coin', will face high uncertainty: whether the new community is strong enough, whether the new coin could widely accepted by other crypto investors, whether the ABC team could properly lead the new community, and so on.
In conclusion, the volatility of the BCH price will largely increased during this period and the short-term investor will face high risk (potential high rewards, of course), but in the long run, BCH is still a great investment!
The second day of FIL: FIL is currently trading between $40 - $50, which drops almost 80% from the first day's peak, or drops around 60% from $120, the price that stays for a while.
Is FIL worth to invest at this price range? no, it is still too high from my point of view, and will write an article to analysis and share my points.
The first day of FIL: FIL circulating amount is very small now, and it will be gradually released over several months. Today's price is crazy, be careful of the risk if you really want to participate (not recommended)!
Analysis of XRP - the most overvalued top crypto
This not an quantitative analysis (determine the reasonable price range), but focus on the logic of why XRP is overvalued
Please note that **the value and the price are two different things, they can deviate from each other a lot.** Thus, even though XRP is overvalued, it not means the price of XRP will decrease soon (the price movement cannot be precisely predicted).
Currently, XRP is No.3 coin ranked by market cap (except the stable coin), and is 2.5x of No.4 coin's (BCH) market cap, which does not make sense to me.
For the analysis of BCH (also focus on the logic), please refer this article: ***Why am I turned bullish on BCH*** https://read.cash/@Galaxy/why-am-i-turned-bullish-on-bch-7812551b
What is XRP
If you follow the crypto market in 2017, you must heard the name of XRP, which is a superstar crypto with over 300x gains during that year. The XRP is a crypto created by ripple company, and ripple company aims to disturb the current SWIFT system used in the cross-border transaction area: it created a system that can largely reduce the transaction fees and increase the transaction speed, compared with SWIFT.
Ripple has an impressive customer (financial giants) and investor (famous VCs) list, and ripple claims that the XRP is the only universal currency in the system. With the growth of ripple, XRP would widely applied and even become the universal currency of the world, sounds great, right?
No.
Why XRP is overvalued
XRP is not a 'traditional crypto', it is centralised
Unlike other cryptos, all XRP were pre-mined by ripple company, which gradually sell XRP on market. Of course, ripple had airdrop lots of XRP to early users and institutions, but that's just a marketing method.
Besides the amount of XRP, there are other features can show how centralised is XRP. For instance, ripple network has many gateways (act like banks), which can frozen funds (not only XRP, but other assets such as dollars) lay on the gateways. Of course, if you store your XRP in a personal wallet, no one can frozen it.
XRP is not the core product of ripple company, and is not necessary in its core product
When you enter the ripple website, you can see lots of giant partners of ripple, and those partners are using ripple's core product - xCurrent, which do not need XRP at all. Even though ripple has remove the three products (xCurrent, xRapid, Xvia) introduction from website last year and says all product would use rippleNet, but most clients (especially financial giants) still not using XRP. So why does ripple do that? does it want to make XRP necessary in the rippleNet in the future? or just do marketing for XRP?
XRP will not widely applied in the cross-border transaction area in the future.
Blockchain technology is valuable in the cross-border transaction area, but that not means XRP is necessary or even suitable in this process: the high volatility prevent XRP to be integrated into this process. The most important part is that ripple's network already achieve the goal without using XRP (xCurrent), **given banks can already improve the cross-border transaction process by using xCurrent, why would they take high FX risk to use XRP as an agent in this process?**
The ripple company only treat XRP as a source of revenue (through selling)
Some people may think that ripple trying its best to advance the application of XRP usable so that XRP and ripple company are on the same boat. That's not true from my opinion. Indeed, ripple company works hard to 'integrate' XRP into this process (cross-border transactions), but why? take a look of ripple company's revenue then you would have an answer: until now, most of ripple's revenue (if not all of) comes from selling XRP (they are transparent about this), and this situation will last at least for several years. So yes, **the price of XRP is important to ripple company, because they keep selling XRP (monthly base) into the market and want to sell at a good price.**
If the price of XRP is so important to ripple, does that means ripple will truly integrate XRP into its main business and focusing on the long term benefit of XRP? Not really. When ripple sold most of its XRP, the price of XRP would be irrelevant with the revenue of ripple company, do you think ripple would still keep XRP in its main business at that time (if they really make XRP necessary in the process, which is very unlikely)? of course not.
**Remember, ripple company could simply launch a new product similar to xRapid, let's call it 'xFast', and issue another cryptos which integrate with the new product.** Because XRP is not necessary in its main business, this is not difficult to ripple company.
Why XRP could still be No.3 coin (except the stable coin)
Mostly because of consensus. The market positioning XRP as the No.1 cross-border transaction coin that can reshape the traditional financial industry.
The only use case for XRP is cross-border transactions, or as payment method (widely speaking), and the advantages of XRP are nothing else but transaction speed and fees.
Let's think about what is the essential factor that change an asset's price. Yes, it is the need & supply (bid & ask), in other word, an asset could have extremely high valuation even if it is worthless, as long as people think it worth that value.
The future of XRP
XRP is not a good investment from the logic side, because ripple's main business is to improve cross-border transaction process, which do not need XRP at all. Actually, blockchain technology did bring revolutions to the cross-border transactions area, but banks definitely don't want to use XRP as an agent in the process given its high volatility (that's why all giant banks only use xCurrent). Thus, XRP is irrelevant to the ripple's main business, in other words, **XRP (almost) does not actual share the increased value of ripple company.**
XRP could used in the process (although not necessary) as liquidity, and the use of XRP in this process become the only reason for XRP to climb. But think it this way:
if XRP is optional in the rippleNet in the future, there will not enough demand for XRP to rise.
if XRP become necessary in the rippleNet in the future, XRP must act like stable coin, and thus meaningless for investment (but have actual usage).
So what's the best case for XRP to rise? Yes, **if ripple company keep saying (of course, do marketing) that XRP is increasingly important in rippleNet but do not make it necessary in the process, until it sold most of its XRP.**
**Even without all the problems mentioned above, XRP still facing intense competitions.** Competitors include but not limited:
cryptos: there are many cryptos that also have advantages in cross-border transactions or payments area, such as BCH, Stellar, Dash...
giant companies: actually those giant companies that interest in improving SWIFT system are more powerful competitors of ripple, such as JP Morgan (JP Morgan coin), Facebook (Libra)...
**From my perspective, the ranking of XRP will gradually decrease and eventually out of top 10 coins, maybe in 3 - 5 years.**
Note that XRP's price may still increase a lot in the next bull market (but who wouldn't?), but I would suggest you to be careful of XRP's risk (volatility).
As a VC, I will invest in good startups that have cutting-edge technologies and strong teams, but I will never invest in nonessential products of those startup.
**Ripple is a good company, and XRP is its nonessential product.**
The power of 'consensus' - even though I don't see much values in XRP, it still remains in top 3 coins (No.3, except the stable coin - Tether) for a long time. Until now, it's market cap still 2.5x of the No.4 cryptos, BCH, which has much more value from my perspective.
The value of cryptos
As a value investor, I'm always trying to find the value of the assets before investing. In stock market, we could use discounted cash flow method to do the valuation, but I got confused with the valuation in 2017 (the year I first heard bitcoin), during that time, the valuation of bitcoin was insane to me. But in late 2019 I realized the value of cryptos (not all of them), and in this article, I will do general analysis of the value of cryptos (focusing on why they have value), and in the next article, I will pick a crypto and do the valuation using regular valuation method.
The value of blockchain
Firstly, I want to clarify that blockchain is not equal to cryptos, but they are closely related. Specifically, blockchain is a kind of technology which cryptos are based on it, but some blockchain applications do not need tokens (cryptos).
The basic idea of blockchain is decentralise, so is there any real value we could achieve through decentralisation?
The answer is yes.
The biggest problem that blockchain could solve is trust. It could bring revolution in many area such as:
logistics
IoT
finance
social media
Anti-counterfeit
...
Please note that decentralisation can not solve all problems, and we do need centralisation in certain area.
The value of cryptos
Cryptos (tokens) are incentives of blockchain projects, and this is a brilliant idea because token economy could redefine many industry, such as social media platform: traditionally, you use those products to share your life or networking, and those product generate revenue through advertisement (which you could not share), but platform like read.cash allows everyone (not only 'powerful users') to earn reward through their activities.
Cryptos are similar to stocks (but not identical), so the value of cryptos depend on each blockchain project.
This is an straightforward but important conclusion because some people may treat cryptos as 'gold' and think their value come from the fixed total supply (scarcity). That is absolutely wrong because bitcoin already shows that feature, given its strongest consensus among all cryptos (because of its first mover advantage), so if you want to buy 'digital gold', then bitcoin is the best choice. Do not buy altcoins just because they have fixed supply!
From my perspective, the value of cryptos can be categorised in the following area:
value store (digital gold)
in our fiat system, the currency does not have intrinsic value but backed by faith and credit of the government, which usually aim to keep inflation at around 2%. But during recessions, authorities could issue fiat money to save the market and boost economy at almost no short term cost, which would cause high inflations and the depreciation of our fiat money, thus, we need a method to hedge this risk (inflation). Traditionally, that asset is gold.
is crypto has value store feature?
yes.
which one?
bitcoin.
why?
consensus.
it does not means that other cryptos do not have value, but only bitcoin can be treated as gold (at least in the near future). In other words, even if bitcoin do not have any real applications (in fact, it has), it still has 'intrinsic value'(consensus) as long as the supply limited to 21M. For most cryptos, their project has to generate commercial values, otherwise, they are worthless.
so I treat bitcoin like 'gold' (although not identical), where as other cryptos like 'stock'.
infrastructure (public blockchains)
public blockchains (or consortium blockchains) play an important role in blockchain industry because they support other blockchain applications. The value of public blockchain not only come from its performance (such as tps), but also come from its ecosystem. Actually, this is my favorite sector in crypto market (bitcoin is the first public blockchain).
specific applications
blockchain technology can apply in many area (as mentioned above), and there are many crypto projects exploring the potential possibilities of blockchain (such as defi), but be careful of the risk (really high) if you want to invest in altcoins!
Conclusion
Blockchain is a revolutionary technology, and cryptos are valuable assets. Altcoins could have extremely high return and high risk at the same time: they may become totally worthless (the value depend on the project). Thus, be careful when you want to invest in altcoins, do your homework (although it could not eliminate the risk, but could reduce it) before invest!
Top coins are unlikely to become worthless, such as bitcoin, BCH, ETH, LTC, etc. and among those top coins, bitcoin has lowest risk because of the strongest consensus.
The reasons that I turned bullish on BCH
I'm a finance guy that have experiences in Stock and FX Market, and I bearish on cryptos during 2017 to 2018. But I change my thoughts and bullish on crypto markets last year, especially on BCH.
The first time that I heard bitcoin and cryptos was in Feb 2017, when the bitcoin price was just above $1000. During that summer, bitcoin became a hot topic and the price increased to $3000 - $4000. Everybody talked about blockchain and bitcoin, but to me, it was just another speculation case for the following reasons:
No valuable applications: I don't see any commercial applications of bitcoin at that time
extremely high volatility: many bitcoin believers said bitcoin would replace fiat money in 2017, but the high volatility could prevent bitcoin to achieve that goal, not to say other problems. From my point of view, with that volatility, the biggest 'application' of bitcoin was investment, or speculation.
regulations: the anonymous feature of cryptos definitely will face regulations soon.
Thus, I didn't buy any cryptos during 2017 , and the collapse of crypto market around the beginning of 2018 was not unexpected to me. While I thought the bitcoin games was over (no liquidity any more), the price was rebound many times during 2019 (still pretty high trading volume), so I started to learn blockchain and crypto market and realised that bitcoin and cryptos do have their values. Among all cryptos, BCH is my favorite.
the reason to bullish on crypto market
(1) QE: QE is the trend, I may talk about this in another article. With the fiat money deprecated, cryptos (and stocks, commodities) market size tend to increase.
(2) the value of blockchain: I believe blockchain is a breakthrough technology that can solve many problems in our world in the near future. Although blockchain is not equal to cryptos, but they are closely related.
why BCH?
(1) BCH is 'Bitcoin': **the reason that bitcoin can represent and dominate the cryptos is the first mover advantage.** This advantage is so important that, from my point of view, no other cryptos could replace bitcoin in many years (ten or even more). However, BCH is the first 'hard fork' blockchain from bitcoin, in other words, **the different opinion in the 'original bitcoin community' split the 'original bitcoin' into two communities: 'new bitcoin' (current bitcoin) and BCH.** Theoretically, both 'new bitcoin' and BCH could represent the 'original bitcoin' and thus represent cryptos.
(2) keep decentralised feature: **the basic idea behind the cryptos and blockchains is the decentralised feature, and that is the value of them.** We can see some blockchain projects, such as EOS, achieve higher performance through supernodes model, which sacrifice decentralised feature. BCH keep this most important feature of blockchain, and increase the performance (far better than bitcoin) largely meanwhile.
(3) potentials to support real applications: the performance of blockchain is one of the most important factor to generate commercial value. Compared with bitcoin, BCH has much lower transfer fees, much higher transfer speed, etc. which make BCH has much higher commercial value than bitcoin.
**Eventually, I believe that BCH could replace current bitcoin to represent the 'original bitcoin', with huge commercial value, whereas the current bitcoin would more like a 'symbol' or gold. Of course, this could take a long time to happen (if would happen).**
Finally, there are still some problems that cryptos may face in the future:
regulations: cryptos market size is still small-the whole cryptos market is less than half of the market cap of Facebook. If cryptos market want to become another 'stock market', regulation is an inevitable problem.
safety: During the last three years, there are lots of hackers successfully attacked personal wallets and exchanges, and due to the decentralised feature, once the asset is lost (especially in personal wallet), it gone forever. So basically there are two kind of risk by holding cryptos (except price volatility), one is being hacked, the other is personal reasons (you lost your wallet and the private key). Thus, how to safely store crypto asset is an important issue.
performance: to generate real commercial value, blockchains need to improve the performance further, so how to improve the performance while keeping the decentralised feature is another challenge.
Hope the community could lead BCH to a bright future !
@Galaxy