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How Many Blockchains Does The Future Hold?

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We’ve seen the successful execution of dozens upon dozens of ICOs on the Ethereum platform. In too many cases, these ICOs just wind up being a useless token of thanks and their value tends toward zero. In plenty of cases, the token is a valuable part of a system. In either case, one ecosystem can only facilitate so many tokens at a given time. If too much traffic develops on one chain, it becomes increasingly expensive to transact upon that chain, and so other chains are sought.

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This is the question to explore, then: what other chains will become necessary? We’ve seen the news of the Red Pulse ICO, both positive and negative, and news of Chinese interference in the ICO market as a whole, have a severe impact on NEO, which itself launched from an ICO basis. Other alternatives include the more obvious Ethereum Classic, whose primary difference from Ethereum is that its token holds less base value. Platforms like NXT gave rise to IOTA, one of the highest-performing ICOs of all time.

While every chain must have a base token with some value, how many chains, really, does the world of the future need? Are there even enough currently in existence?

Others are sure to follow. The author thinks: the more, the merrier. But this has long been counter-logical. Instead, we’ve been taught that the so-called “network effect” of each chain would eventually dissipate toward a dominant master chain. While this hasn’t turned out to be true, one wonders how much room there is at present time and in the future for all the tokenized chains. Let’s have a look at the price of the tokenized chain base coins, in ascending order:

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  • NXT – $0.08
  • Waves – $4.40
  • Counterparty – $11.29
  • Ethereum Classic – $14.89
  • NEO – $23.61
  • Ethereum – $291.76

Collectively, these networks add up to a market capitalization of around $30 billion. If they each were to continue to grow independently of each other, instead of follow the old theory of them eventually merging into one (in their case, Ethereum since it is presently in the lead in both metrics, and users, and tokens), then this figure alone could broach $100 billion within the next two or three years, given the growth that they’ve seen in the same time to date. Many of these chains are relatively new and still retain network gross values that would lead oen to believe otherwise. The main thing holding the non-Ethereum chains back (Counterparty excluded, since it is Bitcoin-based and its future remains uncertain as regards the capacity of the Bitcoin network for regular transfers) is a lack of utility provided by tokens.

NEO has seen more activity than others in this regard, but we think that all of them have the potential to explode once they have demonstrative successful use-cases which have the potential to enter people’s daily lives. The ideal chain, after all, is the one that no one sees unless they need to. Simply allowing consumers to interact with revolutionary blockchain tools without having to know what they’re doing, in the same way that banks have previously allowed people to interact with the financial system, will in the end lead to great mass adoption.

The author concludes that we probably don’t yet have enough blockchains to facilitate the widespread and decentralized revolution of tokens that society will be undergoing in the coming months and years. We also learn, from the example of NXT, that the value of the chain’s base token does not need to be high in order to produce results for tokens built on them – the example of IOTA, which retains a price of 54 cents to NXT’s 8 cents, but was built on the NXT platform, tells that story.

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Analysis

Technical Analysis: Litecoin and Ethereum on the Move as Rotation Continues

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The altcoin bull run continued today despite the US Thanksgiving holiday, as trading remained active in the majors, and another important break-out occurred, this time in Ethereum. Litecoin is also strong today, and the coin is testing the key $75 resistance level, as it follows in the track of ETH again. The currency still looks set to hit the next target at $82.50, with the all-time highs below just below the $100 level also in sight. While the long-term momentum is edging towards overbought territory, the coin remains bullish on both time-frames, with strong support still found at $64 and $56.

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LTC/USD, 4-Hour Chart Analysis

Ethereum scored a new record high after moving past $400 for the first time in five months, and considering the lengthy consolidation before the move, more upside is likely for the second largest coin. With the long-term momentum still not being overbought, the token’s price might test the $500 mark in this leg higher, with Fibonacci targets ahead at $475 and $512. Support levels are found below $400 at 4380 and $350.

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ETH/USD, 4-Hour Chart Analysis

Ripple is also attempting another bullish move, while Monero and Dash are consolidating just below their recent highs, while IOTA is in a short-term correction pattern as well. More and more altcoins are now in the latter phases of their rallies, just like Bitcoin, but traders still have opportunities with favorable risk-rewards ratios. Let’ see the short-term charts.

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Altcoins

Zcash Dip Offers Chance to Buy

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The ZEC/USD pair went into a downtrend for several days after hitting the 435 level in June. It shed more than half of its value before establishing strong support at 140. The market tried to reclaim resistance at 310 twice, but was sent back on both occasions. As a result, we have a massive reversal structure that might skyrocket the pair into a new all-time high.

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The market closed above 310 a couple of days ago on weak volume which is why it’s struggling to stay above that level. Technical indicators show that momentum is weakening, increasing the likelihood of a dip. A slight correction not only gives the market legs for its next move up, but it also offers you a chance to place orders.

They key indicator to watch for is volume. As long as volume remains sluggish, the market will most likely slide down to 280 first and then 262 next. That’s a good zone to accumulate positions. If volume suddenly spikes, at least 230k at Bitfinex, then we have a legitimate breakout that will take the market to 465.

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 Summary of Strategy

Buy: between 280 and 262 OR confirmed breakout with volume of at least 230k at Bitfinex

Support: 280, 262, and 243

Resistance: 310, 352, 400, and 412

Target: 465

Stop: If the market breaches 243

 

Disclaimer: The writer 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.

 

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Cryptocurrencies

Trade Recommendation: Qtum

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The price is going to bounce from the support zone which is formed by the uptrend line from the higher time frame and 0.035000 support level. RSI confirms price reversal and MACD histogram supports upward movement. It’s a trading opportunity.

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Pending orders for buy should be placed at the 0.035300 level with stop orders at the 0.033700 level. Profit targets are 0.038000 and 0.042000 resistance levels. If you don’t use leverage, trading volume for this trade is up to 5% of your deposit.

Market: QTUMETH
Buy: 0.035300
Stop: 0.033700
Profit Targets: 0.038000 and 0.042000

The trading signal is based on Bittrex chart.
Disclaimer: The analyst does not have investments in Qtum.

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Featured image courtesy of Shutterstock. 

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