In every due diligence by retail investors, a huge flaw lies. Most retail investors thus lack the codes and programming knowledge, making it almost impossible to evaluate a Cryptocurrency’s development. Instead, retail investors turn to YouTube, social media and/or friends to provide advice and clarification on the issue. The constant coverage from mainstream media on Bitcoin had also led to the myths that investing in Cryptocurrencies was a quick way to riches. Mainstream media focused largely on Bitcoin’s huge growth since its inception, rather than on Blockchain’s groundbreaking characteristics. We will learn the changing dynamics of retail investing and how cryptocurrency exchange software development has to keep changing with these trends.
Crypto Retail Investing 2020: Changing Retailers Behavior And Adaptation Of Crypto Exchanges
Point 1 - The Champions of Blockchain Technology
It doesn’t require a level of creativity like Vitalik Buterin to run and implement smart contracts on Ethereum’s platform, according to several developers that I’ve spoken to. Anyone with a specific background in programming may do so.
That’s why I name Developers the Blockchain Technology Champion since they’re almost entirely responsible for leading this industry forward.
The truth is that Ethereum’s technology is at a very high level in terms of accessibility, stability and security as opposed to other blockchain firms.
What do you mean by that?
Many Blockchain Protocols were MASSIVELY overvalued from an economic standpoint. We are just not yet available to market.
Similar concept on why in the same business there are issues like High-end products and Low-end product. Compared with the low-end ones, the gap in skills needed to develop the high-end product is huge.
Mr Buterin is widely recognized as a visionary in the Cryptocurrencies community, having brought us the whole idea of Decentralized Applications, and no one in the world can compete in the Crypto industry with his size.
Point 2 - High Entry Costs For Blockchain Protocols
Since the beginning of 2018, we have seen a fall in the value of the Cryptocurrencies. Capital has left the market in spades. Imagine what happened to the BTC and ETH that you sent to ICOs – they lost their value, which essentially means that ICOs have less funds than they intended to continue their original plan UNLESS they manage to cash all their raised funds into FIAT.
I have been advised that Ethereum is unprecedented in terms of cost and usability, relative to NEO or other platforms. The cost difference is apparently huge. So, if a company wants to incorporate smart contracts into its business, wouldn’t it go for the cheaper alternative?
Given that Blockchain technology is still in its infancy, the market for real-use applications is at present relatively scarce.
It is apparently easy to perform an ICO on Ethereum, as it is cheaper, quicker and less complex than, for example, running it on NEO. For as long as I am not as experienced nor able to articulate my thoughts well enough to further expand, I will not dwell on the technical side ..
UPGRADES TO BITCOIN AND ETHEREUM
The next thing I’d like to focus on is – every other platform apart from Ethereum claims (or hopes) to be similar or better than Ethereum – faster, cheaper, scalability-solving. But what if Ethereum operates to be quicker, simpler and addresses scalability? Embark on Casper.
So Lightning Network is the source of Bitcoin.
Many developers I’ve spoken to believe that if Lightning Network and Casper were successfully integrated into Bitcoin and Ethereum respectively, any major problem these two companies have faced over all these years would be resolved.
Lightning Network can make Bitcoin more appealing than Litecoin and Casper will potentially turn Ethereum into THE leading platform for blockchain.
Having said all these, my friends, the market for cryptocurrencies is still relatively young, and it takes time to fully mature. That being said, a time when a crypto company can compete with Bitcoin and Ethereum in terms of stature and popularity can very well come. But the top 2 crypto-acquisitions are incomparable for now.
In the investment world, the months of Nov and Dec are exceptions, making most crypto-asset more expensive than it really is. Call it market manipulation or cartels but maybe today’s market is only recovering from its exuberance at the end of 2017 and is reaching its’ fair value.’
The economy is definitely being distorted… but that is how trade and investment work. It is manipulated by people who pay hundreds of thousands of PER YEAR dollars to push markets. In the vast ocean of sharks, whales, megalodons and other monstrosities we are only small fishes.
Point 3 - BLOCKCHAIN PROTOCOLS OUTSIDE OF COINMARKETCAP
The real rivals of Ethereum exist beyond CoinMarketCap and are named Hyperledger, IBM Bluemix Blockchain, R3, JP Morgan’s Quorum (bastards xD) and many more.
Organizations such as Hyperledger and others are directly targeting corporate and industrial customers. Just look at the participants and participating organizations in Hyperledger: www.hyperledger.org/members
What I want to share is R3 and Project Ubin, the effort by Singapore to build a digital SGD: www.mas.gov.sg/Singapore-Financial-Centre/Smart-Financial-Center/Project-Ubin.aspx
Picture the whole currency of Singapore on the blockchain, it’ll be incredible! Yet, will it boost the value of Bitcoin? Highly unlikely, since they use the Corda Project that is not listed in CoinMarketCap. R3 may increase in value but it wouldn’t impact one bit the crypto market. To have invested in R3 is the only way to profit from this partnership. R3 in particular, however, is currently not looking too good.
Only the real developers, organizations and approved investors know about companies such as Hyperledger, IBM, R3 etc. and are investing in them through private sales and transactions over the counter. The wealthy people invest in Blockchain Technology but are they interested in CoinMarketCap coins?
The importance of designing Dapps in Cryptocurrency is SUPER important which is why Ethereum ranks second after Bitcoin due to their obvious seamless integration.
Point 4 - Venture Capitalist, Institutions, Private Investors and how they invest
We’ve been hearing news or rumors for a while now that the big money people come to save us. These are the ones who can push stocks and practice (to put it bluntly) money tossing around. What they think is important to understand. Yes they do exist to make money but it’s important how they plan to make money.
Venture Capitalist Fundamentals
Their number one goal as I have been told is to have STABILITY IN LONG TERM INVESTMENTS. First and foremost, their money serves as a contract in helping a startup or a company succeed in the long run and then the profits Thus, they are incredibly risk averse (more than retail investors) and do not seek high gains in short periods.
I’m sure everyone heard the above assertion that 90 per cent of all companies are failing. Venture capitalist and other major investors are all too well aware of this, which means they are HIGHLY selective with their investments and have access to people with years of experience in assessing possible projects.
What does Cryptocurrencies, an asset infamous for its instability, mean? A good guess: either they don’t calculate their Coinmarketcap-based earnings or they invest in a much longer period.
Crypto Investing without the volatility
We might tell, “But Bitcoin is likely to go up in the next five years!”. But as any wise analysts and investors would claim, “We’ll never know what the market will do tomorrow.” These VCs have the MILLION money from investors and will avoid exposing their capital in such a volatile market as much as possible. So then, what are they doing? Refer at Item 2 above. We have found a way to invest WITHOUT exposing their assets to uncertainty in cryptocurrency exchange software.
Retail Investors are always at a disadvantage
Capitalist ventures, Angel investors and private institutions all have their own ideologies. First and foremost, as are all of us, they are looking for ways to make more money. It is however important to note that the resources available to an angel investor are completely different from those available to retail investors. It could be a vast array of perspectives, past successes, resources or relationships.
Retail investors are limited to our personal computers and our go – to method is through search engines, twitter, and other social media platform to find investment information. Hence, we rely on’ trustworthy’ external individuals such as Youtubers, Twitter accounts to assist in our decision making. Nonetheless, there are some who are genuinely passionate about the Crypto market and retail investors, it is important to know that these influencers are more exposed than the average Joe.
They are not immune to loss
Venture capital isn’t prone to losses. 60 per cent of VCs do not return money, according to the article above. In my view that is an enormous amount. And, as much as we want to’ follow the big money’ it is not absolutely assured.
Like retail investors, they are looking to diversify their portfolios with assets that offer different opportunities for projected growth, risk potential and stability.