Monday, May 29, 2017

Altcoins are about to go crazy

At some point late last year the price of bitcoins started to go crazy. We saw huge month over month gains, anyone who got in at the right time did fairly well. Altcoins are just about to do the same thing.

If you buy into Gresham’s Law this all starts to make a lot more sense. The value of money is directly related to it’s security. Security is comprised of two components, price stability and actual security. Price stability is still tough with crypto-currency but things are getting better, albeit slowly.

Security on the other hand is pretty simple. Assuming you store your private key securely the other major factor is the risk of a 51% attack. With the advent of ASICs this becomes increasingly unlikely as long as the ASICs are sold on a mass market basis.

When bitcoin ASICs came into the world the price of bitcoin went crazy. At this point the chance of anyone with 51% of the network actually subverting it are extremely small. If you controlled 51% of the bitcoin network you would be making $2.5M per day from honestly mining alone. Jeopardizing recurring revenue in favor of short term gains simply does not make sense.

The same phenomenon is about to occur in the Altcoin world. Massive shipments of very powerful ASICs are going out now and network power should double in the next month. Prices should follow this pattern as well. Get in now or regret it later.