If our readers arw uninterested in learning much about the space, yet still want to invest in cryptos directly, we at Crypto Mouse would advise you to specify an amount you are willing to lose entirely and invest in two groups: payments and protocols.
Important caveat: Never invest more than you are willing to lose!
Cryptos are a volatile market. The goal here is to invest in a long term play of at least five years. If the amount you invest keeps you up at night, or the minute-by-minute swings of a market that trades 24 hours a day, 365 days a year, make you sweat, scale back or get out entirely.
Now then, since you have decided to take a passive approach, it is better to focus on the payment systems and the protocols, and effectively ignore the 1,000+ applications
being built on the different protocol layers.
We at Crypto Mouse will break it down into groups for reader ease here.
- Bitcoin: Bitcoin is the largest network. Remember that the value of each currency is essentially driven by network effects. This means bitcoin has the highest chance of being the defacto store of value. With the largest network it could essentially become the displacement for gold & offshore banking. To place context around that, if our readers assumed that bitcoin’s
value roughly equates to gold in a few years time, that would put the price at ~$380,000 per coin. Look at where it is currently trading on CoinMarketCap here.
- Litecoin: the litecoin network is usually ahead in technology development relative to bitcoin (see Segwit, Lightning network, and much more in the future). Litecoin will likely remain at a lower valuation than bitcoin due to its smaller network. That said, Litecoin will likely be used to purchase small goods and services in the future. Side note: Litecoin founder Charlie Lee recently sold all of his coins. We at Crypto Mouse think this is a big negative as he
should at least own some of them. If Lee is going to be the CEO of the Litecoin network he should be financially tied to it in some way, no? Nevertheless, that being said, he is likely so wealthy at this point, it is irrelevant and if he continues to work aggressively on the project it’s not that big of a deal. We also think he may be concerned that he is able to influence the price (e.g. by tweeting) which is becoming a blurry line since it could be considered “pumping and dumping” – an illegal securities practice – in the future. To clarify, “pumping and dumping” is the fraudulent practice
of encouraging investors to buy shares in a company in order to inflate the price artificially, and then selling one’s own shares while the price is high. So while we at Crypto Mouse like Litecoin, do not hold a large amount going forward.
- Monero: Monero is the truly anonymous
privacy coin. It cannot be traced and has
a small degree of inflation for its entire life beginning in May 2022. Think about that for a second, dear reader. Which industry would love to have 100% privacy? Yiu guessed it, the illegal drug market. In addition to the illegal drug market we have no doubt that countries and corrupt politicians would love to hide their transactions as well. Side note: The illegal drug market is already a $2T trillion+ market and this does not include other uses for a completely anonymous and untraceable money.
This space changes every minute (not an exaggeration!). We at Crypto Mouse are highlighting the critical elements that are needed for each coin used for payments to work. Those are:
- Network Effects
- Supply / Reward System
- Solid Engineering Teams
If there is no actual use case for a particular coin, then there is no reason to speculate on the future price.
This will help our readers avoid a gambling addiction.
A prime example of this is “Dogecoin”.
Dogecoin is literally a joke currency. Don’t take our word for it, read up on it on Wikipedia. The price of Dogecoin goes up and down wildly. It has an infinite supply and is valued at under a penny (no, those are not typos) – see volume/price history here.
- Ethereum: Ethereum is essentially the largest protocol for decentralized applications at this time. We are using the phrase “at this time” since we’re still extremely early in the development of cryptocurrencies at the time of this writing. We at Crypto Mouse do not want to make an assumption and say it succeeds and also do not want to bet against the incredibly intelligent team working on the project.
- Neo: Neo is a competitor to Ethereum and is different given that it uses “Delegated Byzantine Fault Tolerance” – a consensus mechanism to secure the blockchain versus the current Proof-of-
Work mechanism being used on Ethereum (note Ethereum will switch to Casper in the future which is Proof-of-Stake). Neo’s main engineers are Chinese, which is why it is called the “Chinese Ethereum”. An important distinction remember is the code base. While Ethereum uses Solidity, the Neo platform uses a compiler which allows you to use multiple different types of code (AKA you are not forced to learn Solidity). Sidenote: While we have pointed out the benefits relative to Ethereum, remember readers that network effects matter. We simply cannot assume that Ethereum will fail just because of a few advantages of Neo, and we simply cannot assume that Neo will suddenly win due to a few bells and whistles.
- EOS: EOS is interoperable with other chains and is built to be able to handle enormous amounts of transactions. It simplifies the process of creating applications and performs communication between applications and a computer. Dan Larimer is the creator, who has had two successful projects with SteemIt (Blockchain based social media platform) and Bitshares (mostly known as an exchange, bank and currency) already. He has had several successful projects and many people are betting on his ability to succeed again, this time with EOS, to create a better solution than Ethereum or Neo.
In closing, we cannot guarantee any
sort of success.
The reality is that many of the items listed on this page could be total duds.
That being said, we at Crypto Mouse think these have the highest chance of standing the test of time.
If our readers are going to place small bets on these, or any cryptocurrencies, focusing on the actual engineers is a solid strategy.
Keep reading on for how things work now and where we are going in the future...