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Irrational Exuberance |
Evaluating blockchains for investment and scams. |
2018-04-10 |
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Is your blockchain distributed and decentralized? Do you know what makes bitcoin-- bitcoin? Do you know why Satoshi Nakamoto will never be found and is already dead (RIP Hal Finney). The answer is decentralization and distribution. Only blockchains that are decentralized and distributed are appropriate for stores of monetary value.
I can think of many practical uses for state/corporate sponsored blockchains. Transparent, REAL accountability powered by the blockchain is our future. However, state/corporate blockchains are NOT appropriate for monetary exchange.
Only blockchains that are decentralized and distributed are appropriate for stores of monetary value.
One easy test for decentralization and distribution is to ask yourself if your blockchain can be subpoenaed, litigated and/or sued (XRP). This includes the development group and/or figureheads at the top of your blockchain (ETH). If your development group gets 'shut-down' by the government, will your blockchain continue to function/advance?
Gold cannot be litigated, subpoenaed and/or sued. Your blockchain should be untouchable to law enforcement and legislature. Satoshi Nakamoto is dead, long live bitcoin… and the more secure and private (XMR)
Does your blockchain offer anything unique like smart contract integration, unique network scaling and/or obfuscated transactions like XMR?
Litecoin (LTC) is a direct clone of bitcoin. It offers no real utility over the original protocol and is called the beta test platform for bitcoin by developers. This can be said for hundreds of other bitcoin clones. Does your blockchain actually perform a useful and unique function?
Is your blockchain a scam? Did your developers allow for pre-mining or create a huge treasury of the token before releasing to the public?
The best way to evaluate a blockchain is to install a full node/wallet on your machine and test a transaction. How user friendly is the wallet? Does the wallet provide easy mnemonics to capture your private key? Does the wallet have a GUI? Does the wallet sync with the blockchain and successfully send a transaction? How fast does the transaction send using average fees? In general, how advanced is the wallet implementation provided by the core developers?
Don’t get scammed. Don’t confuse distribution and decentralization with marketing hype and bullshit! Have fun!
clearwater-trust.com specializes in blockchain evaluation and investment.