100x Your Money With This Cryptocurrency
Bitcoin bull run is in full force. Bitcoin was near $3,000 after the March Corona-crash that took down Stonks, Crypto and Gold with it and now I chuckle when I write this — Bitcoin is at $57,000. It’s not the first time we have seen Bitcoin surge past all odds. The same happened in 2013 and 2017 but what’s different this time is that we have corporate America behind us. From tech firms and hedge funds to even insurance firms and the Mayor of Miami!
I’m certain that Bitcoin hasn’t neared it’s “blow-off top” for this cycle but most of my friends contact me to find out about undervalued altcoins. And while everything is pumping right now, and has pumped 10–20 or even 100 times since their TGE (Token Generation Event), there are still IDO’s happening every week on platforms like Polkastarter, Trustswap and more. These are providing the regular public with opportunities that were available to VC’s in Silicon valley in late 90’s. I’m gonna talk about one such opportunity in this post. But before I do that let me walk you through my reasoning. Humour me if you will. Before we get into the hidden altcoin gem, let’s look at the second biggest cryptocurrency in the world; Ethereum.
What is Ethereum? And why is it so popular?
Ethereum is the second largest cryptocurrency in the world in terms of market cap. The reason behind it’s large adoption is due to it’s ease of use for developers to launch new projects on it using a programming language called Solidity. Additionally it allows developers to bypass lawyers and create complex applications on the Ethereum blockchain by using one of its core features “Smart contracts”. Smart contracts let 2 or more users transact value between each other by agreeing on certain conditions. Developers can create smart contracts that allow users to lend, borrow, trade, get insurance and do a lot more complex transactions between each other without paying lawyers to draft a contract or to use a bank as a broker. This system is totally revolutionary.
What is an oracle?
As smart contracts get more complex, some “extra” data is needed to make sense of the contract, data that is not available on the blockchain. Let me give you an example.
Let’s say Ron is a rice farmer. He enters into a smart contract with an insurance company such that if the state that he lives in does not receive an average of 10cm rainfall per year a certain $USD amount of Ethereum will be sent to his Ethereum wallet from the insurance firm’s Ethereum wallet. The contract’s logic is pretty simple. However, there is one missing piece; how will the data about rainfall in Ron’s area reach the smart contract? This is where oracles come in.
Oracles are small pieces of software whose purpose is to connect blockchains to external data. The most popular oracle projects currently are Chainlink, API3, Band Protocol, Augur and DOS Network.
Tell me about the Altcoin gem!
Ok, enough foreplay. And thanks for reading thus far. The Altcoin gem is a coin called Modefi. You can leave this article now and put your money into it. Or you can do the grown up thing and invest just 2 more minutes and learn why I believe this cryptocurrency will blow up in 2021. Disclaimer: I own this cryptocurrency. Anyway, so now that you know what oracles are, let me present you with a problem; what if Ron from our above example uses a source that proves that his state received only 9cm of rainfall on average that year, whereas the insurance company uses a source that says that the state received 10.5cm of rainfall on average. How do Ron and the insurance company decide which source to use as the oracle for their smart contract?
This is where Modefi comes into play. Modefi is an oracle aggregator. Which means that it will use data from several different oracle markets and use its protocol to give a fair, trust-less and decentralised solution to its users so both Ron and his insurance firm can be sure that a decentralised network of 3rd party agents will take care of aggregating and sourcing data for their smart contract. This reduces disputes, smart contract development costs, time as well as legal fees.
But why not just use Chainlink? It is decentralized
Chainlink is amazing because it decentralizes the governance/voting for the correct data for an oracle use case WITHIN their OWN network. But it still suffers from the problem of the Schelling Point Game. If there are 100 data providers in the Chainlink network, most of these providers will give the data that they think the other providers will give. It is possible that they know of a better data source but go with what they think will be the most “common”. It is also possible that 20 out of these 100 oracles have better data than the other 80 but since the 80 will be a majority, the 20 will lose in this election and will also be punished for it by losing their deposit/penalty amount. Modefi aggregates over several oracle markets and not just Chainlink.
This is also better for security reasons like a Sybil Attack, where a peer in the network can act in good faith for a long time to become a trusted and strong member of the network. Once this is is achieved, it can switch to bad faith and act maliciously.
Thank you for reading thus far. I appreciate each and every reader. If you would like to take your investing game further you can learn about how to invest in cryptocurrencies like Modefi and other small altcoins here.
This article is for informational purposes only, it should not be considered Financial or Legal Advice. Consult a financial professional before making any major financial decisions.