Which crypto should I buy?

[archerships]

First of all, I'm not an investment advisor. Nothing I write here should be construed as financial advice. Cryptocurrencies are experimental technology, and highly volatile (as in, 50 - 80% swings in a single day). There are many scams/con artists/incompetent dreamers. If you invest, you could easily lose all of your money.

I'm simply sharing what I think, in the hopes that it will provide some entertainment value.

Today, Bitcoin's price dropped to $30 K (from an all time high of ~$64 K a few weeks ago).

As a result, a friend asked "What's the best cryptocurrency to invest in today? Today meaning TODAY. Bitcoin shat the bed, so I'm about to buy some more... but there are other currencies that may potentially be better choices. I'm not sure. I need more data."

Here are some of my thoughts on the matter.

As I see it, when you invest, you're investing in a story about the future. In the case of Bitcoin, the story is--at least in part--"Bitcoin, a decentralized, censorship-resistant, inflation-proof electronic currency will displace fiat currencies". By investing in Bitcoin, you're both making a bet on that story coming true, and also helping to make it happen, by creating a market for Bitcoin.

Since investing is a vote for the continued existence of services / products offered by a company, I try to "vote" for companies whose product I like and admire. (Lot's of companies profit by offering shoddy products, or engaging in other forms of evil, parasitic behavior.)

Features I like to see in a company include:

* competent, ethical development team
* competent, ethical leadership team
* product / market fit - ie the need for the product is clear, and solves a real pain point
* easy to try; doesn't require massive changes on the part of the consumer to give it a shot
* good business model - it's clear how the company makes money
* business incentives aligned with customers
* no rent-seeking or other parasitic behavior (no patents, no collaborating with government, no providing services to other rent-seekers, etc)
* open source - no lockin, no malware
* consumer oriented - try to do what's right by the consumer, not trick them into doing something against their interests
* working toward transhumanist goals; helping sentient life to "Live long, live free, live well."
* no/few uncompensated negative externalities

For cryptocurrencies in particular, I also look for cryptocurrencies that are:

* fungible
* anonymous / private (privacy default at layer one, ideally)
* coded by teams with a strong commitment to code quality / security
* useful as a day to day currency (none of this "store of value" rationalization)
* easy to use
* inexpensive to use (low network fees)
* fast (<1 minute confirmation times, ideally)
* decentralized (no single point of failure )
* robust to sybil, DDOS, rubber hose attacks
* novel (not a copycat of an existing project)
* well governed (governance mechanisms balance interests of users, investors, and developers)

IMO, Bitcoin isn't a good investment right now because the network has been captured by interests who retard / delay important on-chain features (privacy, TPS, fees) in order to profit from their second layer services. BTC supporters also seem to have formed an informal cult ("maximalism") that acts like BTC is the end all and be all of cryptocurrency. BTC development has stagnated as a result.

Ethereum seems much more promising, and the Ethereum team's lead, Vitalik Butarin, has done a much better job at addressing Ethereum's flaws (though I think switching to Proof of Stake is a gamble). However, the ETH network is currently expensive, and sluggish to use.

In addition, both BTC and ETH have had enormous run-ups recently, driven by irrational exuberance, rather than careful analysis.

Fortunately, there are many other projects that have not yet received the same degree of attention as ETH and BTC. Some of the other coins I like include:

* Monero (OG privacy coin, and still the best, IMO)
* Oxen (privacy coin based on Monero; used for Tor-like incentivized onion network similar to Tor; Oxen creators also forked Session from Signal)
* Tari (Mimblewimble coin optimized for NFT's; developed by much of the same team developing Monero)
* Thorchain (decentralized, anonymous (no KYC/AML), oracle-free exchange; now integrated into ShapeShift)

Promising, but I'm less confident in the projects:

* Beam (Mimblewimble based coin)
* Zcash (excellent privacy on shielded transactions; however not private by default)
* Nym (better mix-net; similar to Tor)
* Secret (SCRT) (smart contract platform with strong privacy aims; however, built on Intel SGX)
* Haven (Monero based smart contract platform)
* Grin (first Mimblewimble protocol based coin)
* Elixxir (David Chaum's high TPS, low fee mixnet)
* Hermez (zk-Snark privacy/smart contract layer 2 on Ethereum)
* MobileCoin (Monero-like coin built into Signal; however, relies on Intel SGX, 100% pre-mined, ridiculous TOS)

Not private/fungible, but doing something interesting:

* Chia (novel proof of space and time that relies on spare hard drive space to secure the network; developed by Bram Cohen, bittorrent developer. Bram seems hostile to privacy, however.)
* Helium (incentivized, decentralized mesh network)
* Sia (decentralized storage)
* Handshake (decentralized DNS)
* Hive (used to reward contributors to decentralized reddit-like social network hive.io)
* Honey (decentralized community governance for 1hive.org community)
* Chainlink (decentralized oracle network for settling real world smart contracts)

So, my answer to the question "What is the best cryptocurrency to buy today?" would be: "It depends". It depends on what cryptocurrencies you want to help manifest into the world, and which stories you want to believe.

Addendum:

The easiest way to purchase crypto is to ask your crypto owning friends if they'll sell you some.

Next would be to set up a Coinbase account, and buy through them. However, they will require the same information as a bank, and they will report your trades / holdings to the IRS.

The most private way would be to buy with fiat via https://bisq.network or https://localmonero.co.

Once you have a commonly used crypto, you can exchange it for other cryptos you want on decentralized exchanges like Uniswap or automated exchange services like Shapeshift, Morphtoken or Changenow.io.

I'm happy to give a dollar of Monero to anyone who wants to play with it. Hit me up on Session:

05d1b268a8f0f00dbd95aaf8e1ce99c6bb3064f12139bfff8c1493c77f5245495d

You can get Session here: https://getsession.org/

Comments

I'd take a unit of your coin of choice

[kayemmo]

I've downloaded and installed Session, but as with all contemporary UIs, I doesn't make a lick of intuitive sense to me. How can I contact you there?

05546f4cc588e2c8842359f874364c90c691755970a113e8112971454da636297c

Also, I notice that Cardano didn't appear anywhere on your lists, even in the highly-criticized categories. Do you have any thoughts on Ada?

Re: I'd take a unit of your coin of choice

[archerships]

Yeah, it's not the most intuitive app. I sent you a response.

Re: I'd take a unit of your coin of choice

[archerships]

There are so many coins out there that I tend to limit my sights to those that prioritize privacy/fungibility layer1 (ideally at layer1, by default). Cardano doesn't offer privacy, to my knowledge. It's main differentiator seems to be higher TPS and lower energy use, by using a POS / sharding protocol. But ethereum will offer that soon as well. So I don't see what it's doing that's interesting enough to pay more attention to it.