How Is It That Cryptocurrencies Are Priced – Part 1
A write up on the pricing strategy of cryptocurrencies. The post is continued to the second part
The Final Take On Cryptocurrencies
While it is widely thought that predicting cryptocurrency prices is a fool’s game, it is worth a try with drivers of a single cryptocurrency value currently too varied and vague making assessments based on any one point as the news is trending up on Bitcoin. There may be a hack or an API failure that is driving it down the same time as does the Ethereum look sluggish? Maybe it is a possibility shortly that someone will build a new smarter DAO tomorrow drawing in the big spenders.
So How Do You Invest? And Which Currency Should You Bet?
It is important as the key to understanding what to buy or sell, as it is when to hold is to use the tools associated with assessing the value of open source projects which has been said again and again were to understand the current crypto boom you have is to go back to the quiet rise of Linux.
While Linux appeared on most radars during the dot-com bubble, at the time in case you wanted to set up a web server it had to be that physically shipped with a windows server or Sun Sparc Station that is set to be a server farm where it would do the hard work of delivering Pets.com HTML. Whereas it is at the same time Linux like a freight train runs parallel path to Microsoft and Sun consistently allowing developers to build one-off projects very quickly and easily using an OS and toolset that were improving daily.
Whereas in comparison the massive hardware, as well as software expenditures, are associated with the status quo solution providers that were deeply inefficient as well as very quickly all of the tech giants made their money on software that now made their money on services or like Sun folded. An open-source forest bloomed from the acorn of Linux whereas there was some clear problem to be addressed that is you can make money from open source as well as consult and sell products that used open-source components with early builder’s building primarily for the betterment of humanity and not the betterment of their bank accounts.
Following the Linux model almost exactly are the cryptocurrencies as they have cash value when you’re working on a crypto project then you’re not doing it for the common good or for the joy of writing free software but you're writing it with the expectation of a big pay put, therefore, it clouds judgments of many programmers. The folks who were brought on Python, PHP, Django, and Node.js are back programming money.
Check the codebase
With great reckoning in token sales and cryptocurrency space, many companies have been able to get away with poor or unusable codebases where developers will let future company’s get away with so much smoke and mirrors. Even though they are massive, the money trough flows from ICO to ICO as finite and at some point, there will be greater scrutiny paid to incomplete work.
Does it all mean that to understand cryptocurrency you have to be treated like a startup? Is there a good team and is it a good product, does the product work as stipulated will someone be using it? As they asses the value of cryptocurrency it is too early and the tokens or coin become the way computers pay the other in future letting us hand wave away a lot of doubt.
Ignoring froth, hype, and FUD and instead focus on true utility is the key to understand cryptocurrency as you think someday the phone will pay another phone expecting credit card system thereby which folds in the face of the internet of value? Then is it by all means buying and holding or speculating on things thinking it will make your life better as the expectation the internet of value improves the life the way the TCP/IP internet did as probably it does not cut out for this
The following is an assessment of what should be looked at while considering an investment in cryptocurrencies with several caveats addressed before we begin
Crypto is surely not a monetary investment in real currency whereas an investment in a pie-in-the-sky techno future where you buy crypto you’re assuming that we’ll all be back on the deck of the starship enterprise exchanging them like Galactic Credits one day. Taking into account this is surely the only inevitable future for crypto bulls, you can force crypto into various economic models and hope for the best with the entire platform techno utopianist assuming all sorts of exciting and unlikely things coming to pass in the next few years spare cash lying around and like star wars then you’re golden. In case you bought Bitcoin on credit card sits because you were told to and you’re probably going to have a bad time.