Cryptos With Utility
In a backdrop of dismal bond yields, near-zero interest rates, and dithering stock prices, cryptos with utility provide investors with alpha returns, and it could be for a reason.
Behind every industrial revolution, you will find a gaming-changing technology or innovation driving the transformation.
So, bursts of disruptive product or service innovations are driven by technology. Moreover, it is early investors in these long waves of innovation that stand to make alpha returns.
The internal combustion engine, a second industrial revolution technology, mechanized transportation, and industry. The combustion engine was no fad, as it was a disruptive technology that eventually replaced horses for automobiles.
Back then, investing in spark plugs companies would have been a better proposition than a blacksmith business making horseshoes.
Early investors in Web 2.0, the second revolution of the internet from static pages to dynamic content, and e-commerce made some investors rich. A modest one-thousand-dollar investment in Amazon IPO in May 1997 would be worth $1,362,000 as of September 2018.
Cryptos with utility is the fountain of wealth for investors today
Today, Web 3.0, the next stage of the web evolution, which is making the internet more intelligent, processes information with near-human-like intelligence through the power of AI systems that could run smart programs hosted on the blockchain technology. So, it is cryptos with utility and creative application of this technology that fuel a global digital ecosystem.
But finding cryptos with utility in the Garden of Eden is tricky
The naked ape is imperfect, and his greed can lead to sins.
The market capitalization on the unregulated cryptocurrency market is 2.1 trillion dollars.
“Currently, we just don’t have enough investor protection in crypto finance, issuance, trading, or lending. Frankly, at this time, it’s more like the Wild West or the old world of “buyer beware” that existed before the securities laws were enacted. This asset class is rife with fraud, scams, and abuse in certain applications. We can do better,” said SEC chair Gary Gensler before the Senate Committee, September 14.
So how do investors find cryptos with utility in the lawless Wild West?
Read with diligence the cryptocurrency white paper, focus on the cryptos technology and disregard marketing spin, bearing in mind that it is the technology, the engine driving Web 3.0.
Look for leaders of the consensus mechanism, used in the blockchain system, whether it be proof of work, proof of stake, and proof of history.
Where speed of transaction is more important than security, in other words, in a global internet payment system, the consensus mechanism is likely to be Proof of Stake and or Proof of History.
But where the integrity of the blockchain, the security of the transaction is more important than speed, such as when the transaction is worth six figures, a Proof of Work will be the preferred blockchain system. These users will willingly pay the higher gas fees in exchange for greater security.
So cryptos with utility include leading Proof of Work blockchain systems providing immutable untampered ledger could also return alpha.