Is Bitcoin dying? If so, what will replace it?
Bitcoin has just suffered another big decline. It’s now down by 77% from its all-time highs.
But it’s not the first time!
After it began trading ten years ago, Bitcoin plunged by at least 70% on four previous occasions.
Each time, Wall Street “experts” wrote Bitcoin’s obituary. But each time, it came back from the dead and surged to new all-time highs.
If you had bought the “dead” Bitcoin after each of the four big declines, you could have seen average gains of 6,300%, or 63-to-1.
In the next crypto bull market, things could be different …
No, Bitcoin will not die. It will still play an important role, especially as a store of value. And its price should still make new all-time highs.
But collectively, a select few, more advanced cryptocurrencies have the potential to take over the bulk of the market share and deliver far greater gains to investors.
Recently, in Part 2 of our series of online briefings, Juan and I talked about three examples.
Next, Part 3 will be the grand finale of this series: Soon after we return from our Thanksgiving break, we’ll hop online to walk you through our strategy for maximizing your profit potential and minimizing your risk in cryptocurrencies.
In the meantime, here’s an abridged transcript of Part 2, edited for clarity …
Three Super Cryptocurrencies That Could Outperform Bitcoin by a Mile
Martin Weiss: Good afternoon, Juan! Let’s get to the meat of our conversation today, the three cryptocurrencies that you feel should be bought in December, and why.
Juan: Hey, Martin! Yes, I’m ready.
Martin: First, though, I want to say a couple of things in the interests of full disclosure:
We have previously recommended these to our paid subscribers and, after they had a chance to buy, I’ve bought some of the coins too — to serve as a model portfolio, as a guide for those subscribers.
Second, they are not the only ones getting our high ratings.
Juan Villaverde: Right. Let’s start with XRP.
Martin: You mean Ripple, right?
Juan: No, I don’t mean Ripple. It’s a common misconception. Don’t confuse XRP, a digital asset that you buy on exchanges, with Ripple, a fintech company that developed and maintains XRP, that uses the XRP ledger to do its business.
Martin: Explain its mission.
Juan: Right now, if you buy a stock on the stock exchange, that transaction doesn’t get settled right away. It takes about three days.
Martin: I know. There’s a lot of stuff that goes on between the time I put in my order and the time it’s settled.
Juan: Yes, during those three days, there’s a lot of cost. There are a lot of intermediaries. And there’s actually a lot of counterparty risk. And with certain financial transactions, it can take weeks to settle.
XRP and Ripple are looking to disrupt that. With XRP, it takes three to five seconds to settle the transaction. That has massive disruptive potential for the financial industry.
Martin: With today’s settlement system, if the broker or the counterparty failed, you’d have the massive settlement problem, right?
Juan: Sure. And what if they can’t find the stock? There are a lot of risks that most investors are not aware of.
Martin: This sounds huge. But it also doesn’t sound like right here and now. Where is Ripple today?
Juan: A lot of these institutions are not yet comfortable using a digital asset like XRP. So Ripple is working with financial institutions to get them comfortable with it. They’re working with remittance providers like Western Union and MoneyGram. They’re working with credit cards, like Mastercard and American Express. They’re working with big banks, like Santander, BBVA and others. And they’re getting them to test out the technology. That’s where Ripple is today.
The reason we find it very exciting is because this is the only cryptocurrency company that big institutions are willing to talk to. And this is the only technology that they’re testing out today. They’re not using Bitcoin. They’re not using Ethereum. They’re not using any other cryptocurrency you see on exchanges. They’re using XRP.
Martin: So, as they make these deals, even if preliminary, investors start rushing in to buy XRP in anticipation of what the future might be. Is that a correct statement?
Juan: It is a correct statement. This is the first time that the financial industry has been disrupted in such a massive way in decades. So it will take time for these companies to switch over to these new systems.
Martin: We’re not expecting instant gratification here, but you know how investors are.
Juan: Investors look to the future. And there’s a lot of excitement about XRP, a lot of people who love this asset. They believe in this story. They see it happening in real time. It’s a story about growth, about a potential technology with huge disruptive potential for the financial industry as a whole.
Martin: That’s XRP.
Juan: Next is EOS.
Juan: EOS is a different story. It’s not for financial institutions. It’s not for big companies. It’s for communities, for distributed applications (dApps).
Martin: For the sake of crypto newcomers, let’s put this in some historical context.
Bitcoin is designed primarily as a peer-to-peer system for sending money.
Then comes Ethereum. Ethereum is not just money. It’s also a platform for people to create these applications with smart contracts.
Juan: Build stuff on top of, yeah.
Martin: And until recently, Ethereum was the primary one where they build these things. But now you have EOS.
Juan: A wannabe Ethereum killer!
Martin: Okay, so how much progress has it made in replacing Ethereum, and why would it replace Ethereum in the future?
Juan: To understand why EOS is so valuable, you have to understand what’s wrong with Ethereum today.
Number one, it’s too slow. You can’t even run some single applications on Ethereum, funny enough. There’s one called CryptoKitties. That one alone ground the entire network to a halt. And compared to many classic internet applications, it wasn’t that popular. Still, it was too big for Ethereum.
So EOS comes along and says, “We can do it better, we can do it faster.”
The second issue with Ethereum today is that, if you’ve ever used software, you know that it needs to be changed … it needs to be upgraded as time goes on.
But Ethereum is made to be immutable, meaning that once you push code onto the Ethereum blockchain, you can’t change anything about it. So if an application is broken, if it has bugs, you can’t fix it. You’re stuck with what you have.
Now, EOS comes along and says “No, we should be able to change the code on the ledger, on the blockchain.”
So there you have the two main things that EOS seeks to improve: It’s 1,000 times faster than Ethereum, and it’s possible to upgrade the code on EOS, which we call “governance.”
Martin: And it’s getting a lot of usage all of a sudden. It was launched just a few months ago now.
Juan: It just launched last June. And it has ten times the usage of Ethereum.
Martin: Wow! Ten times the usage of Ethereum already?
Juan: Yeah, ten times already, and it’s still running at a fraction of its maximum capacity.
Martin: It gets the high Weiss Cryptocurrency Rating because the technology is superior, as you just said.
Martin: And because it has the usage and adoption. We want to see not only the potential for speed and performance in the code, we also want to see the actual performance and speed in the real world. And that’s where your adoption metrics kick in.
Juan: Yes, and the same thing can be said for XRP. EOS and XRP are two cases where we find that the technology is good for what they’re trying to do. But we also see a lot of usage, a lot of adoption. We see people, real projects, real businesses, using this technology.
Martin: Anyone who’s looked into crypto has probably heard of those two — XRP and EOS. But the third one you want to talk about is new, and most people haven’t heard about it.
Juan: The third one I want to talk about, which is very special, is called Holochain.
Holochain is not a blockchain, even though they use the word “chain.” The ticker symbol, if you want to look it up on the exchange, is HOT. It’s also for building dApps, for building distributed applications.
Martin: The wannabe replacements for Facebook, Amazon, Netflix, Google and so forth.
Juan: Yes, but here’s the thing: Facebook alone is doing about half a million “likes” per second. Half a million!
Martin: That’s a transaction, isn’t it?
Juan: Exactly. That would be a transaction on a distributed ledger. But none of the platforms that we’ve reviewed until recently can go up to that level, to that speed.
Martin: Why not?
Juan: Because all transactions of a particular blockchain are written on the same ledger. They all share the same bandwidth, and that’s the issue.
This is why it’s difficult to envision some of these mega-applications running on a blockchain platform. Holochain does it differently. It’s peer-to-peer. Basically, when I do something on Holochain with you, I talk to you and only you. We sign. And it’s done.
Martin: So it’s still cryptocurrency technology. The goals are similar. But it’s a whole new way of doing it.
Juan: It’s a whole new way of doing it, and the reason we find it so exciting is because it has the promise to completely reinvent the way the internet works.
I could spend the next three days talking about the many things that Holochain is doing differently — the way they deal with operability of the code, the way they deal with community, the way they decentralize applications.
Martin: I’ve read your report, and the bottom line is it can be as fast as the internet. It can function at maximum speed, which means it could do everything that Facebook does, everything that Google does, everything that Netflix does.
Juan: It can run the entire web, no problem.
Martin: And then the second thing you said is that the scalability — the hundreds of millions of people who can join and still be serviced efficiently — is almost infinite.
Juan: It’s infinite because the more people you have, the faster it becomes.
Martin: Oh? You’ll have to explain that to me some other time.
Juan: Sure, I will, but that’s why it’s so exciting. That’s why it’s so promising.
Martin: Okay, but from an investor’s perspective, it’s still early in the game right now.
Juan: Very early, yes.
Martin: You can buy it on the Exchange, but not many people know about it.
Juan: No, but it’s very hard for us to envision a future where people are not using Holochain. It’s very, very good for what it’s trying to do. It’s probably one of the best in class.
Martin: I really appreciate it, Juan. Thanks for your time.
My message to everyone with us today is twofold: Don’t underestimate the power of these three cryptos to change the world and generate profits for investors.