One month ago I wrote about Bitcoin, eGLD and my trading bot. A lot has happened since, so I thought it was time for an update.
First of all, Bitcoin has reached even higher all-time highs. On 14-01-2021 the price of 1 BTC was $40110,-. At the moment however, I have re-invested the majority of my BTC into other altcoins and only keep a tiny bit of BTC available for my trading bot to play with. There are a couple of projects, besides from Elrond, I learned about which show a lot of potential for 2021 and beyond, which is why I traded my BTC for these coins instead. My portfolio currently contains the following coins:
- Theta & tFuel
I’ll try to explain why I invested in these coins, and will give a small update on what I’m planning on doing next. Oh and the trading bot? It has made a 6% profit over the last month, which is next to nothing, so I won’t be focusing any more on that at this time.
Ethereum is currently market leader when it comes to running smart contracts (which is crypto-talk for programs). It is widely used as a platform to start new coins, run decentralized programs and is used for decentralized finance. It has however, as I previously described, its shortcomings in terms of processing speed. Ethereum is trying to update the network to improve this, which is what they call Ethereum 2.0.
The way they are achieving this is by implementing something called ‘sharding’. Sharding means that one has several blockchains running in parallel, which all report and connect to a ‘main’ blockchain. This implementation goes in 3 stages, and the first stage went live on the 1st of December 2020. The implementation of the entire Ethereum 2.0 is not expected to be finished before 2022, but the continued attention towards Ethereum will make the price steadily go up.
It is said that Ethereum will increase in value very soon due to the current market conditions Actally today, 19-1-2020, Ethereum broke its all-time high at $1440,-! Historically, the price ratio between Bitcoin and Ethereum has been 1:32, so it didn’t really matter if you choose to hold one or the other, but I think Ethereum 2.0 might change this BTC to ETH ratio in the future. This made me convert some of my Bitcoin into Ethereum.
Theta is a very interesting project, because it’s going to solve a big problem which is going to get relevant really soon. What they’ve build (and patented!) is a blockchain based video-delivery network. To understand why this has huge potential, one has to understand the way all our YouTube/Netflix/etc. video’s are delivered to our devices. Around the world each video content provider has a number of huge datacenters running which stream video’s to many simultaneous users. This is by-far the biggest cost for content providers due to the sheer amount of energy these datacenters use, and are also the biggest bottleneck in providing consistent video quality higher than Full HD to all users connected to these datacenters. Delivering higher quality content to all users requires such high investments in new infrastructure that it is just not feasible.
Theta aims to solve this problem using a blockchain which allows users to buffer videos for other (nearby) users. This completely eliminates the need for a centralized content delivery datacenter, and instead allows users to share their available bandwidth by buffering and streaming content to other users, for which they get a fee in return (tFuel). This allows for much higher video resolutions and for example 360° virtual reality (VR) streaming.
The fact that Theta has managed to patent their protocol means that anyone who wants to use it will need to pay Theta a fee. It also means that no other crypto blockchain project can come along and try to steal away some of the market Theta is serving, which are all very good for the Theta coin price. I strongly believe this protocol will get widely used in a few years, and that Theta will go up considerably in the next 3-5 years.
Already today you can earn tFuel by downloading and running the Theta Edge Node. I have this running on an old laptop, and it’s earning me a steady amount of tFuel each month. I don’t think the price of tFuel will get very high, but so far my electricity costs are lower than the price of tFuel I’ve earned. If you just want to check out the videos on the network, you can do so on theta.tv.
Polkadot & Cardano
Polkadot and Cardano are said to become the other main competitors of Ethereum, together with Elrond. Polkadot is actually invented and developed by a co-founder of Ethereum, Gavin Wood.
Both Cardano and Polkadot have a very active community and a good business plan. Polkadot already has a working blockchain that people can use, Cardano has planned to release their blockchain in February/March 2021. Both Cardano and Polkadot have a very active community and a good business plan. Polkadot even became the 4th biggest crypto coin on 17-01-2020, surpassing Ripple (XRP), and only has Tether (a stablecoin), Ethereum and Bitcoin in front of it.
I don’t know too much else about these coins, but here I trust the community and have therefore bought myself into these projects.
Honestly, when going down the crypto-rabbithole one can go very deep. So far, my strategy on the coins I’ve invested in have been going long (buy them, plan to hold on to them for a few years before selling them again). I have been learning more and more about the crypto world, and have started to get an interest in trading coins which are not yet listed on exchanges. These coins are usually high risk, high reward, but one can get a lot of help on Twitter and Telegram in identifying the high profile coins which are about to increase >10x in value.
In order to trade these type of coins, one needs to use Uniswap. During the coming period, that’s where I’ll be hiding :).