Cryptocurrency / Blockchain
Here Are the 6 Biggest Investments in My Cryptocurrency Portfolio
I said it before. I am absolutely bullish on cryptocurrencies. Over the last few weeks, I have massively rebuilt my investment portfolio — I am now heavily invested in various cryptocurrencies.
Here are my main positions and why I invested in the projects.
Let’s start with the smallest and work our way up. I always give the percentage the coin makes up of my total portfolio. Have fun!
1.7%: Basic Attention Token
One of the many cool features of the Brave Browser is its own token. It’s called the Basic Attention Token — for a good reason.
Just by using the browser, you can constantly earn BATs. This is financed by advertisements that the browser displays. You pay with your attention, hence the name of the token.
Of course, you won’t get rich from it, but a few dollars add up in a month.
With Brave Rewards, ad matching happens directly on your device and removes the need to leak personal data to provide relevant advertising.
I think it’s a great idea. The browser is fast, secure, and is reinventing the business of online advertising — which is precisely why I’m invested in the token, which runs on the Ethereum blockchain.
Polkadot is one of the two Ethereum renegades.
The founder, Gavin Wood, was a co-founder of Ethereum. Just like Charles Hoskinson, who later founded Cardano, he left the Ethereum project. Polkadot describes itself as providing what Ethereum could not.
Remarkably, there are already many projects based on Polkadot, even though Polkadot was released after Ethereum⁵.
I’m not too familiar with the blockchain, to be honest. As one of the potential Ethereum killers, I have Polkadot, well precisely, its native coin DOT, in my portfolio.
As a scientific investor, I know there’s nothing wrong with investing in something you don’t know that well. Covering a market is always a good idea.
Let’s move on to something I am more familiar with.
Cardano is one of the renegades mentioned above. Charles Hoskinson co-founded Ethereum and then left it in 2014.
The Ethereum co-founder’s blockchain has two huge assets: an insanely large community with over 400,000 members on Reddit and Hoskinson himself, who as the project’s founder is intelligent, sympathetic, and ambitious.
But also the project itself, not only its founder, is very impressive. Cardano is developed by IOHK, a company that specializes in blockchain and cryptocurrencies. The company is staffed by Ph.D.’s who test and develop Cardano and extensively write papers and do theory beforehand⁸.
Cardano boasts that not a single change will occur without papers being peer-reviewed on it. That’s impressive and, in my opinion, an excellent approach to reassure the crypto-skeptics.
Blockchain has long made it into the mainstream economy. Cardano has even made it into Ethiopia's education system. The engagement in the Africa project shows how blockchain can also be used for humanitarian projects.
This is precisely the kind of project I like to invest in.
Bitcoin is the first major cryptocurrency.
You can notice it: the blockchain consumes a lot of energy, and Bitcoin is nothing more than a means of payment. Yes, bitcoin is not a masterpiece technically. There have long been many competing projects that also aim to be a good store-of-value.
But so far, no cryptocurrency can hold a candle to Bitcoin. The reason is simple: the network effect. A cryptocurrency becomes more valuable the more people use it. It’s like Whatsapp — you certainly only use it because everyone else does.
Bitcoin is the epitome and, for many, the first thing we think of when hearing the word cryptocurrency. This is why I believe that it belongs to every portfolio as a universal store of value.
After Bitcoin, Ethereum is the next big thing.
Launched in 2015, Ether currently has more than 1/3 of Bitcoin’s market capitalization⁶. But unlike Bitcoin, Ethereum can do much more.
I would say that the Ethereum blockchain is the locus of the most influential trends in the crypto space. Decentralized apps, NFTs, smart contracts, and non-native tokens — Ethereum is at the forefront of all of these things.
Recently, there has also been a lot of mockery of the blockchain.
The transaction costs are just way too high, and at the moment, the network can only handle 30 transactions per second⁴.
Furthermore, Ethereum relies on the proof-of-work process, similar to Bitcoin. In this process, coins get mined, which causes high energy consumption and even a shortage of graphic cards⁷.
Ethereum, therefore, stands between the two extremes. On the one hand, there is a huge community and many use cases and projects — on the other hand, there are significant technical problems.
Thank god, rescue is in sight: The Ethereum Foundation is working hard to solve the problems. After the following updates, Ethereum 2.0 will be converted to proof-of-stake. High energy consumption and transaction costs should be a thing of the past, and the network aims to be able to handle 100,000 transactions per second⁴.
The high share of over one-third already shows it: Algorand is my favorite.
Despite this, Algorand is the smallest and least known project on this list.
Ironically, there is no stranger behind it.
Silvio Micali didn’t just found Algorand. He won the Turing award in 2012 for his work in cryptography² (like the Nobel prize for computer science), has taught at MIT², and is considered the solver of the blockchain trilemma¹.
Accordingly, Algorand is technically very impressive. The blockchain boasts of being the first to use pure proof of stake. There are no miners, but individual participants confirm transactions. Usually, the stake is like a pledge — if the selected person confirms the transaction incorrectly, they lose their deposit. With Algorand, there is no pledge at all. The system favors the participants who have the most stakes — if they were to abuse it, they would shoot themselves in the foot³.
The fact that there is no real pledge has many advantages. You don’t have to delegate your coins to a pool, and you can use them anytime despite staking³.
Compared to Ethereum and Bitcoin, Algorand has another strength: transactions are cheap yet fast³. Since the average block-time is 4 seconds, transactions are nearly realtime³.
Although Algorand was launched in 2019, it is already very complete. Unlike Cardano, smart contracts, for example, are already implemented; even NFTs can be bought already.
I am still convinced that cryptos are a great investment at the moment.
It is no longer just about means of payment — there is a blockchain for every conceivable application. This is exactly why I believe that the projects will coexist. Ethereum will never prevail against Bitcoin, nor the other way around — the two are competing in completely different races.
My portfolio pursues the goal of diversification. Over time, I will get to know more projects and expand. I recommend everyone to pursue the same.
Thank you for reading! In case you want to know more about cryptos & blockchain:
I Sold a Large Part of My Portfolio To Buy More Cryptocurrencies
The 3 reasons why I am so bullish
The 3 Problems That Make Dogecoin Such a Poor Cryptocurrency
It’s still not a good investment
Why Most Cryptocurrency Communities Feel Like Cults to Me
And why this might harm the whole crypto space
This is no financial advice. Invest carefully and research on your own.