Most people agree that Bitcoin will not be the only coin in the long-run, but there will be a few for different niches. Now, how many niches are there? Will it be 3, 7, or 100? Here is my guess.
This time we have a coin, which is a look into the future itself. It is a very direct clone of Bitcoin with one change that gave it its name.
What is the essence of money? The standard definition is “a medium of exchange, a unit of account, a store of value”. These different aspects suggest that there will be different coins survive long-term, which specialize in different aspects.
Again and again the question comes up: What coin to invest in? The answer depends on a lot of variables: How much do you want to invest? How long until you want to see returns? How much risk? What returns do you expect? Do you expect to withdraw at any time?
For example, you have $1000 you want to put away for a few months. Here is an example invest advice:
The inflation through mining must be balanced by people buying more coins to keep the price stable. Governments can control the inflation of their currencies to some extend. The developers of crypto currencies have less control. Effectively, the inflation is fixed and define the mining speed. What does it tell you about a new coin?
There are normal currencies like dollar and euro. They are issued by governments and are basically a promise to be exchanged for other worthy things. Our common believe that this promise will be kept gives bank notes their value. Another important fact of dollars is that there is a limited amount of them. While the governments print new bank notes, they usually do so cautiously.
Crypto currencies are like digital bank notes. Algorithms ensure that there is only a limited amount. Interestingly, people also believe in their promise, so crypto currencies are valuable like other currencies. The allure of crypto currencies is that they are not controlled by any government. They are also much cheaper to transfer around the globe.
How Do Crypto Currencies Work?