New Year’s Crypto Resolutions: 2018 What To Do Vs Not To Do?

Looking back in the future, both in 2018 and beyond, the year 2017 will likely be remembered as the first time cryptocurrency really entered the mainstream consciousness.

With the skyrocketing returns of Bitcoin, up nearly 20,000% for the year before giving back some of its gains, and the rise of other coins like Litecoin, Ether, and even Bitcoin Cash, 2017 marked the first time that the bulk of society first became familiar with blockchain technology, and the cryptocurrencies it powers.

With major news sites devoting more and more space to coverage of the crypto space, and breathless stories of “Bitcoin-millionaires” and their rags-to-riches stories coming out every day, the arena went from a niche technological “hobby”, to being viewed as a legitimate investment class.

Even Wall Street took note, with several stock tickers related to the space seeing huge gains, and the CME and CBOE both approving futures trading in Bitcoin, with more registered stocks and ETFs already planned for release in 2018.

With the cat out of the proverbial bag, the future of crypto in 2018 will likely be very different than the past year.

As the industry slowly matures, the volatility in Bitcoin specifically will likely decrease, as will the out sized returns it experienced the past 2 years when even casual investors were making 10 or 20 times their investment. This is unlikely to continue in 2018, so investors looking to repeat the huge gains in the space will likely need to look to the so-called “altcoins” for hidden opportunities for massive profits in the new year.

The altcoins are new cryptocurrencies, many of them based on the Etherium technological platform, that have much smaller market cap, and many trade on small exchanges that are much less liquid than Coinbase, the predominant U.S. based exchange that Bitcoin, Etherium, and Litecoin all trade on.

While rumors abound that Coinbase is likely to add support for additional coins in early 2018 (Ripple being the odds-on favorite to be the first added), crypto investors will look to the smaller exchanges like Binance.com, to buy and sell the dozens of altcoins where the most opportunity lies.

These altcoins are often aimed at serving specific industries (medical, agricultural, and technological industries specifically) and solving certain limitations of Bitcoin, most importantly its lack of acceptance as a valid payment method for most commerce.

An additional benefit of certain altcoins is their ability to pay “dividends”, a criticism of Bitcoin that has slowed its adoption by investors. The dividends are earned through the use of “masternodes”, a relatively new concept by which holders of certain altcoins can hold their coins “in trust” while powering the infrastructure that supports these coins’ growth and use.

Masternodes are, simply speaking, small virtual servers setup voluntarily by individuals who support certain coins. These computers run the blockchain software that allows for the use and support of these coins, providing the basic technology resources that keep these coins functioning, including the trading and voting rights necessary once these coins have widespread adoption. The people who hold coins and setup these masternode servers are rewarded in the form of coin payments for running the technology background through automated processes.

The masternode owners benefit from getting the extra free coins in the form of dividends, as well as any increase in value of their underlying coin holdings as they become more popular. These nodes require some investment up front to acquire the coins (typically 1,000 coins are needed per masternode) as well as small monthly hosting bills to run the servers, but very little technological know-how or ongoing cost is needed.

This dividend-paying process incentivizes the adoption of the coins, and the continuing support needed to make them thrive, while costing investors very little once they have acquired the coins necessary to run one of these small servers.

While cryptocurrency is still in its early stages of the adoption, the potential for out sized returns in 2018 likely lies not with the grand-daddy Bitcoin, but rather the smaller, more nimble alt-currencies that are largely undiscovered, but have greater growth potential.

If you are interested in exploring the more than 1200 altcoins now trading on exchanges, we recommend you check out Binance here, in which you can purchase any of hundreds of coins, many of them still trading at very low valuations. Any one of these altcoins may be 2018’s “Bitcoin”, and the investors who get in early are likely to be richly rewarded in the new year.