Cryptocurrencies are now very popular.
Everywhere you see headlines with impressive thousand percent profit for "coins" such as bitcoin. But what gives them value? When did you ever use bitcoin?
The truth is that it is not practical at the moment, mainly because of the amount of time it takes to complete a transaction. But there are other coins that come up as viable candidates to succeed bitcoin as the number 1 cryptocurrency.
There is much to understand about the intricacies of cryptocurrencies, but this article is more about finding an investment opportunity than explaining the science behind them.
A bubble in Bitcoin?
One thing that is important to know is the concept of & # 39; mining & # 39 ;. This is the basis of cryptocurrencies. That is how new bitcoins are made.
In simple terms, the & # 39; miner & # 39 ;, through special software, solves a complex math problem and is rewarded with new bitcoins. The transaction is then stored in the blockchain and those new bitcoins are officially in circulation.
As more bitcoins are in circulation, mining them becomes more complicated and time-consuming and less profitable. So although about 80% of the possible bitcoins are currently in circulation, the latter will not be mined until 2140.
As most people now know, bitcoin has seen a huge rally this year. It has even risen by around 1200% in the past year, making many people think it is in a bubble.
The total value of bitcoins in circulation is now more than $ 150 billion. If bitcoin were a company, it would be in the top 50 largest in the United States.
I personally believe that the only reason bitcoin is so much more valuable than any other cryptocurrency is because it was the one that first broke through to the mainstream. However, that is still important. It gives at least other coin developers something to improve.
The good thing is that even if you think you've missed the bitcoin boat, there are many other cryptocurrencies. Of course some are scams, but others have real potential.
One of those who I believe has real, practical use is called Dash.
Dash: Digital money
Firstly, Dash is ahead in terms of convenience. Bitcoin transactions currently take on average around 10 minutes to an hour. Dash wants to be the primary cryptocurrency that can be transferred directly (in less than a second) between parties, making it much more practical when it comes to buying things online or in a store.
One of the most attractive features of Dash is that 10% of the newly mined coins is given to the Dash DAO (decentralized autonomous organization). Simply put, the DAO is the treasure house of Dash. At the current price of more than $ 600 per coin, that is $ 4 million per month that it can use.
It is important to know that no other currency has this kind of continuous financing. With this money, the Dash DAO can develop the currency and put it on the market.
Anyone can also submit an idea for a project to increase the value of Dash. Thousands of Dash developers then vote for the project. An example would be to work with stores to make Dash a viable means of transaction for their goods.
Of course these developers earn money from Dash, so anything that benefits and promotes the currency will be tempting.
This creates a circular effect in which the currency is priced in price because it is better financed and marketed, then the DAO earns more money and Dash can market more.
A breakthrough for Dash
So far, Dash can be used in more than 300 physical stores and on more than 100 websites to purchase goods or services. But the breakthrough for that could come from the marijuana industry.
At present, banks may not have anything to do with marijuana transactions; everything must be done in cash. Sellers cannot even put money from their sales in a bank.
This not only entails the risk, but these companies have to pay for storage and transport of cash. That comes up quickly.
The use of Dash would be huge for these suppliers. It would also mean great things for the price of Dash.
The good news is that progress has already been made. In April, Dash collaborated with a digital payment system called Alt Thirty Six, which has partnerships with some of the country's leading business management software companies.
These software companies track transactions for hundreds of pharmacies and delivery services. That means that Dash users already have hundreds of ways to use the currency.
Since Dash officially became a payment method for Alt Thirty Six on October 11, the price has increased by 118%. That's only in a month and a half.
Only the beginning
With a market capitalization of just $ 4.8 billion compared to bitcoin & $ 39 billion, I believe that Dash still has enough room to climb ahead.
The marijuana industry is just the beginning for Dash, but it's a great one. In 2016, legal revenue was around $ 7 billion. Another estimated $ 46 billion was sold on the black market.
And as more stores are opened and marijuana becomes legal in more states, the number is expected to be $ 23 billion in 2021 and $ 50 billion in 2026.
Again, this is just the start for Dash. The unique direct transaction function makes it a viable alternative to cash, giving it a head start on other cryptocurrencies such as bitcoin.