My Critical Perspective Of The Top Cryptocurrencies Five Years Later

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2 years ago

Cryptocurrency and blockchains can disrupt finance, improve economies, and adjust governance in a positive direction for our societies, although a gradual integration could take decades.

Decentralized digital money is a financial wonder, with innovation emerging constantly.

Since March 2017 I researched thousands of cryptocurrencies, but only a few of them survived to this day. Hype does not last, and sometimes I was caught by the hype as a beginner.

We can find potential, despite some cryptocurrencies that will damage our portfolio and may never recover.

Time Tested Cryptocurrencies

We seek cryptocurrencies with utility and a clear direction, developments, improvements, and competitive advantages.

As long-term investors or cryptocurrency users, we follow cryptocurrencies serving a purpose.

The core of cryptocurrencies is decentralized networks offering permissionless transactions. Without these fundamentals, a cryptocurrency is a failure and is sustained only by hype and marketing.

Any centralized financial entity using blockchain technology works identically to the existing banking system.

Bitcoin - BTC

(source)

The last months of 2017 solidified my view of Bitcoin (BTC).

A disaster of colossal proportions, with fees reaching $50 and tens of thousands of transactions stuck in the mempool for weeks, was enough to realize BTC was not the cryptocurrency I wanted.

I gave many more chances and started digging deeper until I discovered the community was not interested in scaling the network. The second layer solutions of LN and Liquid are weak excuses to keep the narrative active and everchanging between SoV and MoE but never really materializing developments towards a clear direction.

El Salvador was a disaster and proved that centralization is demanded to keep second-layer LN operational. The rise of custodial Lightning wallets demonstrates the weaknesses of this technology.

However, there's one point that is irrefutable so far regarding BTC. It entangled in numerous investing strategies and has achieved a place in investors' portfolios regardless of its inherent network weaknesses and development stagnation.

Bitcoin, from a payments network transformed into a high-risk and high speculation asset. Although undeniably performed remarkably well for more than a decade in price terms.

Other than speculation reasons, there's limited potential for BTC.

Bitcoin Cash

Bitcoin Cash works perfectly in every approach. It maintains the positive features of Bitcoin and achieves fast and cheap transactions on a reliable network.

However, past events shrank its community, and the coin lost much of its market share. In 2017 Bitcoin Cash surpassed Ethereum and reached second place right after BTC. It was the flippening moments with excitement on the Bitcoin Cash developments.

2017 Top-3 cryptocurrencies - Coinmarketcap

The first few years of Bitcoin Cash had been difficult.

The BCH community suffered two splits (in 2018 and 2020). When division exists, communities split, and capable individuals leave for other projects.

While communities discuss financial incentives during difficult moments, as in a bear market, communication is key to the sustainability of growth. Unnecessary divisions serve nobody and only damage both antagonistic parties.

Where are BSV and eCash, today? Unwarranted splits are not viable in the long run.

Bitcoin Cash has a CHIPs process where the community examines, tests, discusses, and integrates new ideas into the code with overwhelming acceptance by the community.

A major development that interests us is Cash Tokens, with the potential to evolve Bitcoin Cash into a unique economic model.

The main concern of every investor regarding Bitcoin Cash is the price underperformance which is also the only disadvantage utilized by the anti-BCH propaganda we experience in social media.

Ethereum

Ethereum brought tremendous innovation in the cryptocurrency field. However, the Ethereum network experiences high fees and network congestion. There are plans to scale Ethereum, although it can take another five years before integrating these scaling solutions (sharding).

Ethereum enjoys a world-renowned brand name and backing from multi-billion dollar funds. Failing is out of the question. Still, the network contains several issues to be addressed.

While Ethereum has many minor upgrades to undergo, sharding is the one that will deliver a massive effect and help Ethereum meet the global scale.

Ripple

XRP is a fast cryptocurrency with low transaction fees.

Ripple has never hidden its intentions to integrate the XRP token into banking networks and achieved partnerships with multiple banks worldwide.

Ripple advertised its product as an alternative to SWIFT.

This success of Ripple illustrates the price of XRP, which has risen exceptionally since 2017 and delivered exceptional returns to early investors.

XRP works under a different model than the rest cryptocurrencies.

The network is not permissionless as Ripple selects the validators.

Ripple still controls most of the XRP tokens, which it sells to financial institutions (OTC) with multi-million dollar deals and to retail investors using cryptocurrency exchanges. The Ripple executives have profited extensively from these sales.

The current SEC investigation focuses on the XRP sales by Ripple and the vast token balance Ripple still sustains. 

Decentralized blockchain networks are beyond the reach of the SEC.

The cryptocurrency community was always berating Ripple for its centralization and control of the majority of tokens.

Litecoin

The “silver to Bitcoin’s gold”, as dubbed by Charlie Lee (Litecoin’s founder, ex-Coinbase engineer).

For the last few years, the market balances Litecoin, Bitcoin Cash, and Monero in terms of total market cap.

While Litecoin enjoyed high adoption rates in 2017, since then it is losing its appeal to the public and its community abandoned it. By the end of 2017, Charlie Lee had sold all his LTC for hundreds of millions of dollars.

Litecoin will always be irrelevant in this market, as it only acts as a BTC testnet.

Imagine holding Amazon and learning one day Bezos sold all of his shares.

Privacy Coins: Monero - Zcash - Horizen

Monero, Zcash, and Horizen are some of the top privacy coins recognized by cryptocurrency users for their efficiency and reliability.

The public misunderstands the purpose of privacy coins, just as it happened with Bitcoin in its early days.

The existence of privacy coins or not has little to do with illegal activities in the dark web that was already ongoing before any cryptocurrency became popular.

However, privacy coins find fierce opposition from governments, with some banning their use based on the notion that criminals use them.

Still, when illegal activities take place within a jurisdiction, then it is these illegal activities agencies should apprehend. In the modern age, online crime will only keep increasing.

Ethereum Clones

Plenty of Ethereum clones appeared since Tron in 2017. Eventually, most of them will disappear into obscurity as the market can’t sustain more than a handful of them.

None of these clones are decentralized and most follow a PoS model with centralized validators operated by small teams of developers, or centralized entities that manage and control the networks.

Ethereum also seems to have issues with centralization after removing PoW completely from its protocol. Regardless, it remains to be seen how proof-of-stake will affect Ethereum’s consensus.

Two of the top Ethereum clones are Solana and Polygon, networks that shut down occasionally and demand centralized intervention to work properly.

Downtime is unacceptable as it demands centralized intervention by individuals in control of the network and admin rights with a fail-switch.

There's no indication any of the Ethereum-killers will be around in the following years. Solana, Cardano, Avalanche, Fantom, and the rest have a lot more to achieve to compete with Ethereum. I wonder from the current top 30 how many projects will remain in the top 100 in the next two-three years.

Dogecoin

I love Dogecoin but I didn't enjoy the sudden attention and the extreme speculation surrounding it in 2021. The Musk effect made Dogecoin popular while not even top crypto exchanges had it listed.

Dogecoin is part of my portfolio for speculative reasons. It did drop significantly after its $0.75 ATH, and at $0.06-$0.10 was a decent entry point.

The more Musk gets involved with Dogecoin, the better its price will get.

However, for the time being, there are many coins better than Dogecoin for payments.

"Dead Soon" Cryptocurrencies

It is common knowledge that thousands of crypto projects are abandoned and forgotten, yet some are still actively traded in some exchanges.

Tokens without a plan for a native network will not survive in the long run unless they offer something significant and different from the rest.

I’ve researched countless projects that failed massively since 2017, and I’ve wondered for a while why exchanges don’t delist immediately abandoned coins/tokens.

Exchanges (most times) retain a large share of these tokens. Until they offload and profit from them, they will keep the zombie tokens active in their markets, awaiting a wave of crypto investors to appear and dump.

These are not top exchanges, but maintain low volumes, with all of their profit coming during the bull runs. Some of these exchanges will scam their users in numerous ways and contain high risk.

However, even the top-three crypto exchanges will list any token if they see a profit from high volumes.

Conclusion

Nowadays, investors are highly skeptical of over-hyped projects.

We rediscover established networks that perform as they proclaim and networks that develop for six years with limited decentralization or utility.

The threat to any investor is losing their money due to an implication that can cause seizures or hacks. Security, network stability and reliability, censorship-resistant transactions, and a permissionless environment are features we find in only a few networks. Decentralization further enhances these features, while scalability upgrades increase the adoption rates and chances to succeed.

We discover cryptocurrencies that offer some features (like privacy) at a better rate, although perhaps lacking in other terms.


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Comments

Yeah ...some year the cryptocurrency and bch have much better value in market and now also have value it.

$ 0.00
2 years ago

This is one of the top and most informative thread/post, I have ever read. I wish I have some knowledge like this. You are awesome and great.

$ 0.00
2 years ago

For my point of view 5 years from now there is a much better value of bch and other cryptocurrencues and they know the important and value of it

$ 0.03
2 years ago

Today I started my journey as crypto trader and glad to see that you had great views about Bitcoin Cash and Dogecoin.

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2 years ago