A Case for Platform Altcoins: Why Now is the Best Time to Invest
People who put their money in platform altcoins during 2017 and 2018 got burned more than those who invested in standard functional cryptocurrencies.
Bitcoin fell 84% from peak to trough during the bear market, while other standard UTXO (unspent transaction output) blockchains Litecoin (LTC) and DigiByte (DGB) fell 93% and 94% respectively.
Moving onto platform altcoins (blockchains that launch other coins and apps), the losses frequently exceed 99%. Rather tellingly, the only major platform altcoin that avoided such losses was Ethereum, which lost a relatively modest 94%.
However, the same can’t be said for most of the tokens which launched on Ethereum. And like other blockchain platforms such as NEO, EOS, Stellar, NEM and Waves, the majority of their new tokens and Dapps turned out to be less than hoped for. Coin prices sunk past 99%, and many smaller projects were forced to quietly shut up shop as the crypto winter worsened.
A Case for a Change: The Difference Between Then and Now
With easy money now harder to come by, and ICO funds down drastically since last year, is it too much to assume that the opportunists, hucksters and scammers might have moved on?
Blockchain platforms have now been around for just under half a decade. Coupled with the miserable state of coin prices, I think now would be a good time to invest in platform coins. As more serious, long-term developers adopt these tools, the quality and value of blockchain-based Dapps now has serious legroom to increase.
Major Blockchain Platforms
Let’s take a look at current blockchain platforms which have their own progeny tokens out in circulation.
Let’s get this one out of the way first. Since Ethereum’s launch in 2015 it has cemented its role as king of the platforms, and over 1,000 tokens launched on Ethereum are currently in operation.
This ETH address belonging to Ethereum creator Vitalik Buterin shows around $50 million in ETH. It also shows close to 200 ERC-20 tokens attached to the same address – the majority of which would have been free airdropped tokens, and are currently worth $213,971.
Unless something changes drastically, Ethereum will likely remain the go-to platform for token launches, and is likely already a standard fixture in most portfolios.
Waves currently has 24 of its tokens listed on CoinMarketCap. The most successful, Primalbase Token (PBT) has a valuation of just under $9 million, and is ranked around 314th by market cap.
Waves launched in 2016, and despite racking up over 200 token launches in that time (most of which never came to much), the feeling is that Waves is just getting started.
The recent Vostok ICO launched on the Waves platform, and stands to be one of the most successful of 2019 thus far. A portion of the Vostok tokens have been set aside to be airdropped to Waves coin holders, and this may have fuelled the near 300% growth for WAVES at the turn of the year.
This Internet-of-Things focused project stands as the Chinese competitor to IOTA, as mentioned in Optimize Your Crypto Portfolio: 7 Altcoin Types You Must Own Before the Surge.
Yet VeChain already has 2 tokens listed on CoinMarketCap, the most successful of which is a blockchain gaming startup named Plair (PLA). PLA has a market cap of $3.6 million and only launched in February of 2019. This list compiled by a VeChain community member lists some possible upcoming Dapps on VeChain, meaning the ‘Chinese IOTA’ could just be getting started on the platforming front.
With 17 token successful token launches currently listed on CoinMarketCap, you may be surprised to learn that Stellar has produced more tokens than even the self-proclaimed ‘Ethereum Killer’, Tron (TRX).
The most successful of these is no doubt Repo Coin (REPO) – ranked 75th with a market cap of $65 million, and covered by Hacked back in January.
Tokens launched on the Stellar blockchain benefit from an immediate listing on Stellar’s own DEX – the Stellar Decentralized Exchange, and the non-custodial trading wallet, Stellarport.
Speaking of the self-proclaimed Ethereum Killer, at time of writing only one project is listed as being launched on Tron, and that’s BitTorrent Token (BTT). Other ICO’s have been held on Tron, such as the decentralized exchange, TronWatch.Market. However the ICO only reached 25% of its funding goals, and the TWM token is not yet trading.
Going back to BitTorrent, there’s reason to believe that BTT isn’t exactly running on Tron in the same way that an ERC-20 token is running on Ethereum. BTT is currently ranked 15th by market cap, with a valuation of $131 million, and is being airdropped on a monthly basis by Tron’s Justin Sun.
Thus far, the so called ‘Ethereum On Steroids’ hasn’t lived up to its moniker. There are only 5 EOS-launched tokens listed on CoinMarketCap, and two of them have unknown caps and circulating supplies.
The blockchain-based encyclopedia project, Everipedia (IQ), is the most backed token to have launched on EOS, with a value of around $14 million. Bear in mind that EOS itself was an ICO launch on Ethereum, and one of the most successful of all time owing to its $4 billion fundraising period.
There are 10 tokens listed as having launched on the Qtum platform, the most successful by far being MediBloc (MED). A healthcare-focused token, MED is currently valued at around $8 million, but during the altcoin pump of January 2018 reached an all-time high of $1 billion.
Qtum itself is ranked 30th by market cap and is valued at close to a quarter billion. While listed on Binance, most of its trading activity stems from the ZB.COM and LBank exchanges.
NEO is host to 26 actively trading tokens, the most well-known of which is GAS – the token that NEO holders accumulate for free. GAS trades independent of NEO, and frequently pops its head above the top one hundred coins during a fortuitous pump.
While Ethereum can point to major altcoins it has spawned like Tron and EOS, NEO can also brag of Ontology (ONT) – a token which launched on NEO in 2018, and by 2019 had overtaken its former parent chain.
It may surprise many to learn that Bitshares is the parent of 13 tokens listed on CoinMarketCap. The surprise is lessened when you consider that BitShares was one of the earliest blockchain platforms and launched a whole year before Ethereum.
Created by Dan Larimer, who went on to create popular projects such as Steemit (STEEM) and EOS (EOS), the perception was that BitShares had become the forgotten first child – yet development continues on BitShares, and its social media channels are still active.
The BTS coin is ranked 41st by market cap, with a valuation of $160 million. It has its own asset exchange, where its smart-contract pegged assets, such as gold, silver, euros and dollars are traded actively.
NEM currently has 6 tokens listed on CMC, the most successful of which is the $15 million capped ProximaX (XPX). The highest profile token associated with NEM might have been Nicolas Maduro’s Petro (PTR), in a confusing saga that saw the unwanted Petro flit between Ethereum and NEM.
Recently the NEM Foundation ran into some funding trouble during the crypto winter. However, a restructuring of the foundation, and an appeal for more funding from the XEM treasury has got some suggesting a strong revival for this once well-known platformer.
Ubiq launched in 2014 and is ranked at 289th by market cap with a valuation of $9.7 million. If you haven’t heard of Ubiq, then you probably haven’t heard of the two tokens it has already launched – GeoCoin (GEO) and Qwark (QWARK).
Ubiq and its tokens are available on Bittrex and nowhere else. The coin’s Bitcointalk forum page shows a small-cap coin still buzzing with development, and may be worth bookmarking for future reference.
I include this $5 million capped platform as it has 6 tokens running on its blockchain – more than Tron, EOS, VeChain, and the same as NEM.
One small-cap on its roster is PepeCash (PEPECASH) – ranked 299th by market cap and ‘host to rare Pepes’ which can be bought and sold as assets.
Conclusion: An Investment Plan
Many investors like to spread the risk and maximize the possible reward by holding each and every coin that offers free airdrops. This has the two-pronged effect of opening you up to some possibly successful future projects (Ontology started as a free airdrop). And it also allows you to hold a coin which will always be in demand for future token sales conducted on its platform.
Choosing which platformer to put your faith behind isn’t an easy choice. While this rundown paints a broad picture of the platform landscape, further investigation is required to truly pin down a solid investment, such as The Long Term Bullish Case for Ethereum (ETH). Look out for similar in-depth forays into major altcoins in the coming weeks.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.