After my last blog post about how I got into crypto investing, a few people have asked my opinion on different coins, and how I interpret the market at the moment. Please bear in mind I'm new to this and just one voice of a lone investor. Feel free to call this a shill piece, I just want to articulate why I have chosen to invest the way I have.
At the moment I think we are in a crypto bubble, just like the dotcom bubble, there is a huge amount of money coming to this sector and hundreds of new projects trying to make a buck. People are throwing money at anything with blockchain or token in its name, just like they did in the late 90's when all these new startups with .com in the name came online.
This is troubling news, and certainly cause for concern, however I'm confident that crypto does have a very valid real world worth, and that's why I'm happy to hodl on for now. The problem is the elephant in the room. Bitcoin.
With 52% dominance (as of writing), and a staggering >130 billon dollar market cap, Bitcoin is the undeniable king of the crypto world. Unfortunately despite being revolutionary when it was first created, it hasn't kept up with new innovations to blockchain technologies.
It has incredibly slow transaction times, really high fees, and the ever growing risk of centralisation of the miners due to the absurd use of energy. Bitcoin is almost like gold, there is a limited supply, it's pretty much useless and it's heavy and slow to move around. The key (and most worrying difference) to me is that gold is sustainable, where as without some major changes, I can't see how the bitcoin network will be able to sustain itself when the block rewards become too small for miners to justify the electricity usage.
Enter the alt-coin
The other 48% of the crypto market is made up of over one thousand other coins, each with their own use cases and technologies. The most prominent of these is Ethereum which thanks to its smart contracts provides real world value by allowing developers to create dynamic transactions that link with others across the network. Thanks to this, Ethereum is being used by many businesses for its utility, not just its speculative value. Unfortunately like oil, it still isn't perfect. They have had growing pains such as having to fork the network due to $50m dollars being stolen, and they are still using a proof of work consensus algorithm which is burning electricty, although hopefully will fork to a proof of stake consensus algorithm which is much more efficient.
So Ethereum makes crypto useful, it has helped to spawn off hundreds of other coins based on the Ethereum block chain, using ERC-20 tokens, which are effectively using the smart contracts Ethereum offers to create entire new ecosystems. These projects are great for the crypto space, but they all rely on the Ethereum blockchain which may not be fast enough to keep up with demand. This is why I see Ethereum like oil, it is the working backbone of the crypto space, but it isn't sustainable in the long term, just like our dependence on oil.
There are also hundreds of coins that market themselves as solving some of the problems that bitcoin suffers, such as being ASIC resistant, or offering very low transaction fees. There are some strong contenders here, however anything that is based on proof of work I can't see as being a long term solution as eventually people won't be able to justify the energy waste any more. Proof of stake is the solution to this and many coins have implemented it already, however in my eyes none have done it better than Ark. Unless there is a flaw found in proof of stake or energy scarcity becomes a non issue, to me it is the only way forward.
Ark is solar
Full disclaimer at the time of writing I only hold ark, so this can definitely be read as a shilling or promotional piece, but the things I'd like to highlight are based in reality and although other coins do often have some of these characteristics they don't have all of them.
Smart contracts, open source, business entity & low block times
These are the small boxes to tick, that a lot of coins do, but valuable points to mention. Ark has all of these things; smart contracts provide utility, open source allows for the platform to be accessible, the business entity in France allows for them to be represented in industry and held accountable. Add to this block times of between 5 and 8 seconds (ETH is 15, and BTC 600 for comparison) that allow for confirmations to be quicker, and transactions and trades to be made in a much less stressful fashion!
The ark desktop wallet is one of the nicest I have used, it supports the Ledger Nano, and is even theme-able! They also have a web lite wallet, and a paper wallet for people who just need to hold onto their coins and not interact with them much. There is also a very soon to be released mobile wallet for Android and iOS!
Delegated Proof of Stake System
The big selling point of the Ark Ecosystem is the Delegated Proof of Stake consensus algorithm that it uses. Every wallet that holds Ark can vote for a delegate, the wallets balance is the amount of votes that the wallet has, however you can only vote for one delegate per wallet. A balance of 1000 Ark would allow for a 1000 votes for one delegate.
The 51 most voted for delegates are then allowed to forge new blocks and secure the network. As a reward for doing this work they get awarded around 422 new ark each day. They can then do with this as they please, however to get people to vote for them, they payout a percentage of their rewards to the wallets that have voted for them. This means that once you have voted for a candidate you will receive roughly 10% interest a year on your wallets balance.
This means that the community is actively engaged in securing the network as anyone can become a delegate, and anyone can help choose who becomes a delegate. Currently it would take around 1.3 million votes (~4,900,000 USD worth of ark) to become a delegate, and 26 times that to get complete control of the network. Which if someone tried to do would put the value of Ark so high it would be prohibitive to do.
I may be wrong but to me this system seems secure from centralisation and more future proof than any of the others that I have encountered.
Smart Bridges and One Click Blockchain
What makes Ark an Ecosystem, rather than just a crypto currency is its vision for creating many interconnected blockchains. The way it will do this is firstly by allowing anyone to create and configure their own Ark blockchain as simply as possible, this will encourage businesses looking for a blockchain solution to pick Ark as the base for which they build their platform on.
Smart bridges will then allow users to execute smart contracts on different Ark blockchains, which essentially allows for inter blockchain communication. This functionality gets turbocharged with ACES that will enable this smart bridging between not only Ark chains but also any other chain that has had a listener created for it. They already have a working Ark <-> ETH bridge!
Community & Team
A lot of what I have just described hasn't been built yet and could be seen as just a load of promises and hype; however the Ark team is constantly delivering and hasn't shown any sign of slowing down. If you look at their roadmap you can see how far they have got, and what needs working on. From recent hires and the existing team, it is clear that the people behind Ark aren't in it for the money, they are in it because they believe in the project and the technology and they want to see it get adopted and make a real difference in how blockchains get used in the future.
Besides the official Ark team, there is a large community of investors, delegates and users of the coin. They can be mostly found on the ArkEcosystem slack, which is a great place to get the latest information about Ark and the markets in general. The thing that really encourages is me about this community is the levels of participation, people that have Ark aren't just holding it waiting for their moon lambos, they are actively helping to shape what the project will become by giving feedback to developers, contributing code, and promoting the coin.
Ark isn't perfect and it has a long way to go still, but personally I am fairly confident that Ark is the blockchain of the future. If you want to get involved in the ark project now is a great time, its value is still fairly low ($3.5~) and it has so much potential. Thanks for reading this article! If you have enjoyed this article, feel free to tip me a beer!
BTC | 15FYeMgQsETViUcc8JtSmoHmCAmADy2Ymn LTC | LVdVyd3R1S719ZRApaAY1RgLJ5vYgEGGxW ARK | ANKmYTHV7QdkcLz2R65uMzEvcRRdz2iRQm ETH | 0x7fac974ac795c1ff115a1f2d4b1196dc4005f1bf