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ETHEREUM - (aka. Bitcoin 2.0) Up 3100% in ~7 months
So, I made a small investment in Ethereum ( https://ethereum.org/) back in July 2015 and am up 31x (that's 3100%) as of today!
The ICO (Initial Coin Offering - that's cryptocurrency speak for non SEC approved IPO) was an average of 35 cents per ETH (ETH=Ether - unit name of coin). Today it's at about $11.50/ETH for a rise from $18 Million USD (final ICO day crowdfunding total) to $1 Billion just last week. Out of 700+ Crypto Currencies, Ethereum is now #2 ($900 Million market cap) with Bitcoin for now, still holding #1 spot at $6.5 Billion.
citation: http://coinmarketcap.com/
Barring any major issues with Ethereum (exited beta mode (aka. "Frontier") 4 weeks ago into production ver 1.0 (aka "Homestead"), I can see Ethereum creeping up to Bitcoin over the next 3+ years and possibly even surpassing it. Note that as of right now Ethereum has a prox 5 times more coins than Bitcoin (78 Million mined vs 15.3 Million mined in Bitcoin), so $11.50/ETH is really more like $57.5 if we are to compare it directly to bitcoin's $420 USD/BTC right now. But, if I am correct, this still implies a ~700% increase for ETH if I am correct, or even if it only goes up to equal 50% of Bitcoin's market cap, it's still 350% in 3 years. Of course this kind of increase in any asset class is not without risk, and in the case of crypto currencies it is crazy amounts of risk.
So what's next for Ethereum? Well you can watch (Vitalik Buterin's) the 21 year old's lead developer roadmap update on youtube (~30 mins) or slide-deck. In case you are wondering, this 21 year old genius is backed up by a small army of PHds crypto researchers and a couple hundred software developers world wide.
What's not mentioned in Vitalik's roadmap is the upcoming explosion of "DAO" investments for "DAPPS" on top of Ethereum. DAO = Decentralized Autonomous Organization. DAPP = Decentralized Application (i.e. think of an app on your Ipad that doesn't rely on any specific server, because the server is really thousands of servers globally that support the blockchain - in other words, once the App exists, it cannot be taken down). I'm not going to try to explain what a DAO is, other than briefly because my understanding is limited and there's online resources for that; however, I think it is critical to understand what this means from an investment perspective. Thanks to the concept of "Smart Contracts" that can be programmed on top of the decentralized and immutable (thanks to encryption) blockchain, it is possible to create a contract and have it execute automatically for eternity (so long as Ethereum survives) without any middle man.
In plain English this means that in theory, we no longer need notaries (you can register your marriage on the blockchain - technically, not necessarily legally yet), certain functions that lawyers perform (verification that contractual clauses were accurately exercised), financial auditors (the blockchain provides an immutable fully transparent audit trail that can be verified in seconds with the right tools), escrow agents (the concept of Multi-Signatures to execute certain functions/release funds between 2 or more untrusted 3rd parties means no more escrow services required), and a whole whack of other middle men across many sectors. Let me put it simply: This will translate to MASSIVE DISRUPTION that most can't even imagine yet. But don't take my word for it, read Goldman Sach's own mini report , titled: "What if I told you blockchain ... could disrupt... everything?" - Goldman Sachs.
Last week we witnessed the first DAO crowdsale. It was one called "DigixDAO". Simply, it was a group of 4 guys that created a DAO that links physical gold to virtual tokens. Individuals can purchase virtual tokens (that can't be copied thanks to blockchain technology) and thus by proxy own physical gold and trade said DAO tokens to others for X (crypto)currency. Investors in the DAO weren't buying the gold tokens, but rather are guaranteed transaction fees (dividends) associated with any time a Digix gold-backed token is traded. But to the point... they raised $5.5 Million from thousands of people in 14 hours, and it stopped at $5.5 Million because that was a self-imposed cap. This was the first time that a physical gold backed crypto currency was created. I didn't invest in this for a number of reasons, but the point is get ready for a bubble in "DAO" crowdsales.
Here's one I will be investing in that has not yet started the crowdsale: https://slock.it
Video: 3 mins
For a number of reasons I won't get into here, I fully expect this DAO to raise $50 Million and wouldn't be surprised if it overshoots to $100 Million. Regardless of the final number, this will be a single DAO that will have raised many more times the amount that the platform it depends on (Ethereum) managed to raise ($18 Million).
Another I am watching but may not invest due to a likely fraudulent founder, is Arcade City DAO - A DAO that aims to disrupt the $60 Billion dollar Uber... whom disrupted taxi companies world wide. Here's the 5 minute pitch on Arcade City:
Sounds tempting to invest in right? Until you research the founder and learn he has a history of defrauding individuals... (give it a few seconds to load the page).
As I said above, DAO crypto investment bubble is about to take off like the bitcoin "alt" clones we saw in 2013, except this time around it isn't as easy as cloning, they'll have to come up with an inciting unique DAO which requires skills at different levels, but that isn't going to stop sophisticated scammers.
Oh and as for Bitcoin, that ancient 2009 technology
, it's currently undergoing a crisis in scalability (can't process more than 7 transactions per second - arguable as low as 3.5/s) and ultimately roadmap, so the price has been stuck between $390 and $420 for the past many weeks. There's a whole nerd-war going on about Bitcoin's troubles. In short, Gavin Andresen the lead developer for Bitcoin who lead bitcoin for 4 years after the anonymous founder Satoshi Nakamoto walked away from Bitcoin and handed over the keys to Gavin after he did a presentation on Bitcoin to the CIA. In 2014 or so Gavin himself handed over the keys to some very experienced core developer guys, most of which (like 9 out of 11) have since joined a company called "Blockstream", which was recently funded by Fintech (youtube) / Price Water House Cooper and depending on your perspective, they are essentially changing the philosophical design of bitcoin such that scalability happens off-chain for a fee that Blockstream will of course be collecting for most transactions. Banksters will Bank / play rent seekers, I suppose.
In other words, some are saying they are trying to hi-jack bitcoin for long-term profit. You can spend 200 hours reading up on the whole debate, but it comes down to this: If the core developers manage to deliver on a scalability solution quickly AND *if* the bitcoin miners decide to proceed with their version of the software, bitcoin will survive mostly intact and carry on, but with a slightly different philosophy (no longer extremely low transfer fees for all transactions). Alternatively, the bitcoin miners may decide that an alternative solution now backed by Gavin Andresen - who decided to return to Bitcoin to hopefully rescue it from the deranged core developers he had handed the keys to the kingdom to, is better as it retains Satoshi Nakamoto's original philosophies intact. If so, then Bitcoin may hardfork to a new version called "Classic", and carry on mostly intact, but with the power of roadmap/design back in Gavin's and several other's hands and Blockstream and its $76+ Million in funding will be history. Where Bitcoin could implode is if neither side wins and Bitcoin gets bogged down with excessive queued transactions for too long a period and people lose confidence in Bitcoin and the price crashes. This isn't theory, it's already happened a couple of times, but probably not for a long enough period to do serious damage. At any rate, if Bitcoin crash, I fully expect Bitcoin enthusiasts to start migrating to Ethereum, something that has already happened on a small scale, but could accelerate.
That said, 2016 is also Bitcoin's "Halvening" event year. This means that instead of a miner getting 25 bitcoins every 10 minutes for solving a crypto SHA-256 puzzle, they will only get 12.5 Bitcoins. In other words, the supply is being cut in half. This happens every 4 years (give or take a couple of months). The last time this happened (Dec 2012), the price exploded from $10 to $260 in a matter of months. This time around, the price may go higher again, but only of the scalability issues get resolved, otherwise, the "halvening" event may actually coincide with the price of bitcoin being cut in half ;-)
And if you're still wondering who the heck is Satoshi Nakamoto, then get ready for ... In Dec 2015/Jan 2016 Craig Wright was discovered and announced by Wired to be Satoshi Nakamoto, "ironically coinciding" on the same day that the Australian Taxation Office (IRS equivalent) decided to send the police to break into his house to arrest him, only he had left for London weeks earlier. Turns out later that the documents that Wired had as sources to his identity weren't really fool proof and text analysis of his writings confirmed he was not Satoshi after all and that he simply created an elaborate Hoax to escape Australian Tax Office... unless of course, he really is Satoshi. You see Craig Wright's going ot have a big reveal in the next week or two, and perhaps is planning to come back to smack those new bitcoin core developers into some sense for partnering with Fintech Banksters.
Ahhh Crypto Currencies... never a dull moment!
Cheers,
Adeptus
So, I made a small investment in Ethereum ( https://ethereum.org/) back in July 2015 and am up 31x (that's 3100%) as of today!
The ICO (Initial Coin Offering - that's cryptocurrency speak for non SEC approved IPO) was an average of 35 cents per ETH (ETH=Ether - unit name of coin). Today it's at about $11.50/ETH for a rise from $18 Million USD (final ICO day crowdfunding total) to $1 Billion just last week. Out of 700+ Crypto Currencies, Ethereum is now #2 ($900 Million market cap) with Bitcoin for now, still holding #1 spot at $6.5 Billion.
citation: http://coinmarketcap.com/
Barring any major issues with Ethereum (exited beta mode (aka. "Frontier") 4 weeks ago into production ver 1.0 (aka "Homestead"), I can see Ethereum creeping up to Bitcoin over the next 3+ years and possibly even surpassing it. Note that as of right now Ethereum has a prox 5 times more coins than Bitcoin (78 Million mined vs 15.3 Million mined in Bitcoin), so $11.50/ETH is really more like $57.5 if we are to compare it directly to bitcoin's $420 USD/BTC right now. But, if I am correct, this still implies a ~700% increase for ETH if I am correct, or even if it only goes up to equal 50% of Bitcoin's market cap, it's still 350% in 3 years. Of course this kind of increase in any asset class is not without risk, and in the case of crypto currencies it is crazy amounts of risk.
So what's next for Ethereum? Well you can watch (Vitalik Buterin's) the 21 year old's lead developer roadmap update on youtube (~30 mins) or slide-deck. In case you are wondering, this 21 year old genius is backed up by a small army of PHds crypto researchers and a couple hundred software developers world wide.
What's not mentioned in Vitalik's roadmap is the upcoming explosion of "DAO" investments for "DAPPS" on top of Ethereum. DAO = Decentralized Autonomous Organization. DAPP = Decentralized Application (i.e. think of an app on your Ipad that doesn't rely on any specific server, because the server is really thousands of servers globally that support the blockchain - in other words, once the App exists, it cannot be taken down). I'm not going to try to explain what a DAO is, other than briefly because my understanding is limited and there's online resources for that; however, I think it is critical to understand what this means from an investment perspective. Thanks to the concept of "Smart Contracts" that can be programmed on top of the decentralized and immutable (thanks to encryption) blockchain, it is possible to create a contract and have it execute automatically for eternity (so long as Ethereum survives) without any middle man.
In plain English this means that in theory, we no longer need notaries (you can register your marriage on the blockchain - technically, not necessarily legally yet), certain functions that lawyers perform (verification that contractual clauses were accurately exercised), financial auditors (the blockchain provides an immutable fully transparent audit trail that can be verified in seconds with the right tools), escrow agents (the concept of Multi-Signatures to execute certain functions/release funds between 2 or more untrusted 3rd parties means no more escrow services required), and a whole whack of other middle men across many sectors. Let me put it simply: This will translate to MASSIVE DISRUPTION that most can't even imagine yet. But don't take my word for it, read Goldman Sach's own mini report , titled: "What if I told you blockchain ... could disrupt... everything?" - Goldman Sachs.
Last week we witnessed the first DAO crowdsale. It was one called "DigixDAO". Simply, it was a group of 4 guys that created a DAO that links physical gold to virtual tokens. Individuals can purchase virtual tokens (that can't be copied thanks to blockchain technology) and thus by proxy own physical gold and trade said DAO tokens to others for X (crypto)currency. Investors in the DAO weren't buying the gold tokens, but rather are guaranteed transaction fees (dividends) associated with any time a Digix gold-backed token is traded. But to the point... they raised $5.5 Million from thousands of people in 14 hours, and it stopped at $5.5 Million because that was a self-imposed cap. This was the first time that a physical gold backed crypto currency was created. I didn't invest in this for a number of reasons, but the point is get ready for a bubble in "DAO" crowdsales.
Here's one I will be investing in that has not yet started the crowdsale: https://slock.it
Video: 3 mins
For a number of reasons I won't get into here, I fully expect this DAO to raise $50 Million and wouldn't be surprised if it overshoots to $100 Million. Regardless of the final number, this will be a single DAO that will have raised many more times the amount that the platform it depends on (Ethereum) managed to raise ($18 Million).
Another I am watching but may not invest due to a likely fraudulent founder, is Arcade City DAO - A DAO that aims to disrupt the $60 Billion dollar Uber... whom disrupted taxi companies world wide. Here's the 5 minute pitch on Arcade City:
Sounds tempting to invest in right? Until you research the founder and learn he has a history of defrauding individuals... (give it a few seconds to load the page).
As I said above, DAO crypto investment bubble is about to take off like the bitcoin "alt" clones we saw in 2013, except this time around it isn't as easy as cloning, they'll have to come up with an inciting unique DAO which requires skills at different levels, but that isn't going to stop sophisticated scammers.
Oh and as for Bitcoin, that ancient 2009 technology
, it's currently undergoing a crisis in scalability (can't process more than 7 transactions per second - arguable as low as 3.5/s) and ultimately roadmap, so the price has been stuck between $390 and $420 for the past many weeks. There's a whole nerd-war going on about Bitcoin's troubles. In short, Gavin Andresen the lead developer for Bitcoin who lead bitcoin for 4 years after the anonymous founder Satoshi Nakamoto walked away from Bitcoin and handed over the keys to Gavin after he did a presentation on Bitcoin to the CIA. In 2014 or so Gavin himself handed over the keys to some very experienced core developer guys, most of which (like 9 out of 11) have since joined a company called "Blockstream", which was recently funded by Fintech (youtube) / Price Water House Cooper and depending on your perspective, they are essentially changing the philosophical design of bitcoin such that scalability happens off-chain for a fee that Blockstream will of course be collecting for most transactions. Banksters will Bank / play rent seekers, I suppose. In other words, some are saying they are trying to hi-jack bitcoin for long-term profit. You can spend 200 hours reading up on the whole debate, but it comes down to this: If the core developers manage to deliver on a scalability solution quickly AND *if* the bitcoin miners decide to proceed with their version of the software, bitcoin will survive mostly intact and carry on, but with a slightly different philosophy (no longer extremely low transfer fees for all transactions). Alternatively, the bitcoin miners may decide that an alternative solution now backed by Gavin Andresen - who decided to return to Bitcoin to hopefully rescue it from the deranged core developers he had handed the keys to the kingdom to, is better as it retains Satoshi Nakamoto's original philosophies intact. If so, then Bitcoin may hardfork to a new version called "Classic", and carry on mostly intact, but with the power of roadmap/design back in Gavin's and several other's hands and Blockstream and its $76+ Million in funding will be history. Where Bitcoin could implode is if neither side wins and Bitcoin gets bogged down with excessive queued transactions for too long a period and people lose confidence in Bitcoin and the price crashes. This isn't theory, it's already happened a couple of times, but probably not for a long enough period to do serious damage. At any rate, if Bitcoin crash, I fully expect Bitcoin enthusiasts to start migrating to Ethereum, something that has already happened on a small scale, but could accelerate.
That said, 2016 is also Bitcoin's "Halvening" event year. This means that instead of a miner getting 25 bitcoins every 10 minutes for solving a crypto SHA-256 puzzle, they will only get 12.5 Bitcoins. In other words, the supply is being cut in half. This happens every 4 years (give or take a couple of months). The last time this happened (Dec 2012), the price exploded from $10 to $260 in a matter of months. This time around, the price may go higher again, but only of the scalability issues get resolved, otherwise, the "halvening" event may actually coincide with the price of bitcoin being cut in half ;-)
And if you're still wondering who the heck is Satoshi Nakamoto, then get ready for ... In Dec 2015/Jan 2016 Craig Wright was discovered and announced by Wired to be Satoshi Nakamoto, "ironically coinciding" on the same day that the Australian Taxation Office (IRS equivalent) decided to send the police to break into his house to arrest him, only he had left for London weeks earlier. Turns out later that the documents that Wired had as sources to his identity weren't really fool proof and text analysis of his writings confirmed he was not Satoshi after all and that he simply created an elaborate Hoax to escape Australian Tax Office... unless of course, he really is Satoshi. You see Craig Wright's going ot have a big reveal in the next week or two, and perhaps is planning to come back to smack those new bitcoin core developers into some sense for partnering with Fintech Banksters.
Ahhh Crypto Currencies... never a dull moment!
Cheers,
Adeptus
Beyond that huge hack, Ethereum has suffered several other more minor but very annoying hacks that have slowed down the whole network. The Core developers have re-engineered Ethereum each time to fix those 'bugs/loopholes' and made the whole network that much stronger. As a result of all this the price peaked at $25, but is back to around $10-$11. So not too late to get in. I really do think at some point either Bitcoin will lose its leader advantage due to poor scalability and/or Ethereum will simply out-engineer Bitcoin where it won't even be able to ever catch up.
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