Crypto: Returns, risks or something in between?
Cryptocurrency tends to divide people into three categories: those who swear by its potential, those who think it’s uncertainty is too risky, and those who have heard about it but are still on the fence.
So which is it? Is crypto an equity, speculative asset or somewhere in-between?
From the crypto bull run in 2017 to 2018’s crypto winter that has recently thawed , the undefined asset class has certainly generated a lot of excitement among proponents and some investors.
A miracle cure?
Original crypto enthusiasts view cryptocurrencies and blockchain technology as a revolutionary new way for businesses, governments and societies to interact. That’s a big ambition and unfortunately up to now, the crypto and blockchain space have struggled to deal with the weight of expectations.
The challenge is that blockchain protocols need to enhance existing applications that achieve three things:
- true decentralization
- scalability
- trust
There have been a lot of big ideas, but nothing has yet to live up to the promise.
A cause for concern?
Most governments and regulators have steered clear of crypto, waiting to see how it evolves, while unable to define and classify it as an investable asset. In many ways this has reduced barriers to innovation in the space, but has also lead to bad actors and mismanagement of investor capital which has given nay-sayers plenty of opportunity to decry crypto.
It’s worth pointing out however, that we have seen this pattern of negativity based on misunderstanding many times throughout history, such as the early days of digital music, or even back to the creation of the internet itself. It’s strange to think how anyone could scoff at the potential of something that has so quickly become an integral part of our lives, but many new technologies have faced similar resistance.
Snake e-oil?
The volatility of cryptocurrency tells another side of the story. Expectations were massively inflated in certain quarters 18 months ago. In some cases the result of innocent over-exuberance, but in others it’s been more manipulative as people try to protect their own investments or actively sinister as people have tried to take advantage of naïve investors.
Whatever the cause, there have been plenty of examples of money being lost, and this has generated a lot of negative headlines.
And the reality…
The reality is that crypto lies somewhere between the extremes. It does have the potential to change the way that businesses, governments and communities interact, but we’ve yet to see an application that crosses over into the mainstream and creates efficiencies that enhance the systems we use today.
Equally, like most speculative investors who lack sound knowledge of this new asset class, some were caught in the crypto bubble of 2015–17. Arguably, the crypto winter weeded out many of these speculators and what we saw was the start towards maturity. This is being accelerated by a gradual movement of large institutions and conglomerates like IBM, Microsoft, Goldman Sachs, and most recently, Facebook’s LIBRA innovating with blockchain and crypto architecture.
Maturity brings Masternodes
As the space has matured, Masternodes have begun to play a more and more important part in supporting blockchain infrastructure that underlies cryptocurrencies. Masternodes themselves are not massively interesting to the casual observer. They are simply a way of validating information on a blockchain in return for tokens. The potential does not live in the mining process, but instead in the value add from consensus. This allows Masternodes to become a source of passive income that delivers modest, but consistent returns in the mid-to long-run.
In an economic environment where interest rates have been at historic lows for nearly a decade, an asset class that promises consistent returns higher than that of traditional alternatives such as secured government bonds, are attractive to investors.
At INDX, we strongly believe that financial investments need to be treated carefully, and we aim to educate the market and our investors about the risks vs. rewards of various investment opportunities in the free market economy. With these reasonable caveats in mind, we believe that Masternodes represent a good opportunity for solid returns in the mid to long-term, with growing potential as the ecosystem evolves.
We are offering investors a way to gain exposure to this ecosystem easily and diversify their investment portfolio.
We recently published a Passive Income Report, which we hope will help potential investors understand the passive income potential that we believe Masternodes represent. If you would like to receive a copy, register here https://indx.capital/blog/passive-income-report.html.
INDX is making it simple to invest in the Masternode sector. We want to ensure that everyone can benefit from the digital economy by reducing uncertainty, risk, energy consumption and wasted time. To learn more about INDX, go to https://www.indx.capital/.
