While 2017 has been a roaring bull year for the stock market, the greatest returns you could have seen since January came from cryptocurrency ownership. Bitcoin is now a household name, and is achieving all time price highs at and around $3000 per token. Bitcoin still has the largest market capitalization rate of any crypto, but its innovations have given way to a sea of new digital currencies.
Most of these currencies are garbage. Worth thousandths of a cent in many cases, junk cryptocurrencies may offer big value gains in little time, but will almost surely never be worth much of anything.
However, there are a growing number of cryptos which are seeing rapid uptake, as they fill a variety of needs. If you keep up with this industry at all, you’ve seen the amazing rise of Ethereum in the past few months. Today it’s on the verge of overtaking Bitcoin as the largest cryptocurrency by market cap.
With 3,000% 2017 gains from $ETH, I think its incredible growth rate is going to slow. But there are a couple of other Coins which seem to be ready for big gains. For growth, this is where I would put my money.
How you can help Ethereum: send smart people our way. Math, CS, dist sys, crypto, econ, game theory, behav econ all highly welcome.
— Vitalik Buterin (@VitalikButerin) May 24, 2017
Most people don’t realize that Ethereum actually has two different currencies. There’s the incredible Ethereum ($ETH) which has recently soared above $400/coin for the first time. But there’s also Ethereum Classic ($ETH), which is only trading for about $20/coin.
Without getting into technical details, the Ethereum blockchain was cloned last year. One blockchain is being developed by ETH’s original developers and promises to be a whole new kind of internet (basically, with many other important details we won’t go into here).
Ethereum Classic is run by an entirely different team of developers. However, there is an agreement between the two Ethereum teams about the steps of each blockchain moving into the future. Ethereum gets all the hype, due in large part to its founder, Vitalik Buterin, being at the helm. But this doesn’t mean that Ethereum Classic is any less sophisticated or potentially revolutionary.
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Do your own research on the two blockchains. However, you don’t need to understand much to realize that with $ETC trading at only 5% the cost of $ETH, there’s probably some growth in its future.
Both Ethereum and Ethereum Classic are in intense development mode. As the blockchains get developed, they will have many more user-facing applications. As far as most people are concerned today, they’re both hype. I think $ETC is going to get it’s own momentum in the next few weeks or months. At $20 (or less, at the time of this writing), it’s a steal and I personally am hoarding it.
While ETH is the fuel behind a complex communications network, Litecoin is much simpler. It’s pretty much a cryptocurrency in the tradition of Bitcoin. However, it is younger and has learned from some of Bitcoin’s mistakes.
Bitcoin has a number of problems. One is related to block size. Each block in the chain can contain 1mb of information, usually wrapped up in transactions. There is a solution called Segregated Witness which would more or less shrink the size of incoming information, allowing more transactions to move through each block, thus decreasing congestion.
The other suggested solution would be more fundamental and would cause many problems for users, miners, and Bitcoin’s brand in general. The Bitcoin community can not agree about how to solve this problem, and in the meantime, BTC’s performance frequently suffers.
Litecoin doesn’t have that problem. Still relatively small and nimble, it has already incorporated Segregated Witness, as well as a number of other security and performance improvements over Bitcoin.
I’ll let you dig into the specifics, because technical explanation is not the point of this post of blog. I will say that I think Litecoin ($LTC) is a tremendous bargain at the roughly $30 it’s trading for at the time of this writing. Litecoin has huge potential as a long term hold as Bitcoin’s future becomes increasingly uncertain. For the average cryptocurrency speculator, Litecoin is “Bitcoin, but better”. That’s way oversimplifying the case, but that perception and the aspects of that narrative that are actually true speak to LTC being way undervalued.
Litecoin has the potential for big gains in the short term. I would be surprised if LTC hasn’t hit $100 by year’s end, if not higher. I’ve been buying LTC on the regular and I do not plan to let it go for quite some time.
At the end of the day, cryptocurrency buying is speculation, not investment, and this field is so complex and so generally misunderstood that I could be wrong about all of this. But! Cryptocurrencies are a god damn gold rush. In the event of a stock market correction, analysts think that the market will swell even further. Well chosen acquisitions will see enormous gains, and making crypto a small part of your portfolio is highly recommended.