Cryptocurrency investing is in full swing. BitCoin, Ethereum, LiteCoin valuation spikes are seeing new records unstoppably. In light of Bitcoin’s latest surge, people started questioning whether it’s at its peak and whether it makes sense to dump it and switch to altcoins. I have developed a framework that might help you decide.
When it comes to cryptocurrency trading, there are four traits one should be looking at:
1) Liquidity: The ability for holders to cash out via exchanges and marketplaces.
2) Transactability: A factor of cryptocurrency’s default block mining time. The higher it takes time for a new block to appear, more difficult it is to use in everyday transactions, e.g. shopping for coffee, buying t-shirts, domain names, etc.
3) Anonymity: Whether public eyes can see what’s going on in the ledger, who is buying what, who is selling, etc. In contrast to popular opinion, most cryptocurrencies are not anonymous.
4) Programmability: The ability to develop trustless contracts on top of the public ledger. This is a state-of-the-art advanced concept introduced by Ethereum, which you can skip.