Cryptocurrencies are all the rage right now.
Everywhere, you see headlines with impressive thousands of percent gains on "currencies" like bitcoin. But what gives them value? When have you used bitcoin?
The truth is that it is not practical right now, mainly because of the time it takes to complete a transaction. But there are other currencies out there that emerge as viable candidates to achieve bitcoin as the No. 1 cryptocurrency.
There is a lot to understand about the complexities of cryptocurrencies, but this article is more about finding an investment opportunity than explaining the science behind them.
A bubble in Bitcoin?
One important thing to know is the concept of "mining". This is the very basis of cryptocurrencies. This is how the new bitcoins are made.
Simply put, the "miner" through specialized software solves a complex mathematical problem and is rewarded with new bitcoins as a result. The transaction is then stored on the blockchain, and these new bitcoins are officially released.
As most bitcoins are in circulation, mining them becomes more complicated and time consuming, and less profitable. Thus, although about 80% of potential bitcoins are currently in circulation, the latter will not be mined until 2140.
As most people now know, bitcoin has seen a giant rally this year. In fact, it has reached about 1,200% last year, causing many people to believe it is in a bubble.
The total value of bitcoins in circulation today exceeds $ 150 billion. If bitcoin were a company, it would be in the top 50 largest in the United States.
Personally I think the only reason bitcoin is so much more valuable than any other crypto is because it was the one that first broke in the mainstream. However, this is still important. This, at least, gives other coin developers something to improve on.
The good news is that even if you think you missed the boat with bitcoin, there are many other cryptocurrencies out there. Of course, some are scams, but others have real potential.
One of them that I think has real, practical use is called Dash.
Dash: digital cash
First, Dash is ahead of the game in terms of ease. At present, bitcoin trading takes about 10 minutes to an hour on average. Dash defines that it is the main encryption that can be transferred instantly (in less than a second) between the parties, making it the most practical when shopping online or in-store.
One of the most attractive features of Dash is that 10% of newly acquired coins are given to Dash DAO (decentralized autonomous organization). Simply put, DAO is Dash's treasure. At the current price of more than $ 600 per coin, that's $ 4 million a month it can use.
It is important to know that no other currency has this kind of continuous funding. With this money, Dash DAO can develop and trade the currency.
Also, anyone can submit an idea for a project to enhance Dash's value. Then the project is voted on by thousands of Dash developers. One example would be working with stores to make Dash a viable trading tool for their goods.
Of course, these developers make money from Dash, so anything that benefits and promotes the currency will be tempting.
This creates a cyclical effect, where the currency values the price because it is better financed and marketed, then the DAO makes more money and is able to trade Dash even more.
A breakthrough for the hyphen
To date, Dash can be used in more than 300 physical stores and over 100 websites to purchase goods or services. But the breakthrough for this could come from the marijuana industry.
At the moment, banks are not allowed to have anything to do with marijuana trading. everything has to be done in cash. Sellers still can't put money from their sales into a bank.
Not only is this at risk of being robbed, but these companies have to pay for storage and cash transfers. This is growing rapidly.
Being able to use Dash would be huge for these sellers. It would also mean great things for Dash's honor.
The good news is that it is already beginning to make progress. In April, Dash partnered with a digital payment system called Alt Thirty Six, which has partnered with some of the top distribution software management companies in the country.
These software companies track transactions for hundreds of distributors and delivery services. This means that Dash users already have hundreds of ways to use the currency.
Since Dash became the official payment method at the Alt Thirty Six on October 11, its price has risen by 118%. That's only in a month and a half.
Only the beginning
With a market cap of just $ 4.8 billion compared to $ 156 billion, I think Dash still has enough room to move forward.
The marijuana industry is just the beginning for Dash, but it's great. In 2016, legal sales were about $ 7 billion. Another estimated $ 46 billion was sold on the black market.
And as more stores open and marijuana becomes legal in more states, the legal number is expected to be $ 23 billion by 2021 and $ 50 billion by 2026.
Again, this is just the beginning for Dash. The unique instant transaction feature makes it a viable cash alternative, giving it an advantage over other cryptocurrencies such as bitcoin.