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What will the big 3 cryptocurrencies be in 2020?...


This is the big question that everyone asks. What will be the big cryptocurrencies?

First, let’s first define, what characteristics these 3 cryptocurrencies need to have.


They need to have the following 6 criteria.

  1. Near infinite scalability. That means they need to be able to process at least 1 million transactions per second and possibly also billions
  2. Near infinite decentralisation. This means that their voting should be distributed over at least 10,000 to 100,000 different voters. That means, they CANNOT be PoW, because PoW suffers from strong mining pool centralization. They cannot be PoS, because PoS suffers from strong centralization of voting power among the rich, large companies, institutions, governments, thus defeating the whole point of the blockchain.
  3. Permissionlessness and trustlessness. Permissionless means that there is no 3rd party making rules how to vote, thus giving permission. Trustlessness means that nodes do not need to trust each other in order to participate in the voting. This is not given for Ripple, Stellar, EOS, NEO, Ark, Lisk. They are all permissioned and non-trustless, which always leads to cartel formation, lobbyism and introduces a myriad of social engineering attack vectors such as blackmail, coercion, threats etc.
  4. Near instant transactions. That means, that transactions should be confirmed within 3 seconds maximum. 10 seconds is already too much. Imagine, every person needs to wait 10 seconds at the register for the payment to confirm. This would add much overhead and a lot of lost revenue to any retailer or super market.
  5. Low energy usage. Currently with around 50M users, Bitcoin uses 30TWh per year, around the electricity of a small country like Ireland. All banks together use around 100 TWh per year. With 5B users, Bitcoin would use 3,000 TWh per year, 300 times more than all banks combined, making it completely unusable as a global currency.The Bitcoin vs Visa electricity consumption fallacy
  6. Zero Fees. Having fees is still suboptimal, but it is not such a big point compared to the above 5

There are only 3 cryptocurrencies that can meet those criteria.


  1. Ethereum
  2. IOTA
  3. Elastos

It needs to be said that Ethereum does not meet the criteria yet, but they will be soon with their coming implementation of their PoW/PoS hybrid Casper, Lightning Network Raiden, Plasma and Sharding.

Now, let’s look at how much they can be worth in a couple of years.

Bitcoin is currently at a $110M market cap and will also most likely go back to $20,000 or a market cap of $400B before these altcoins start overtaking it.

That means that these altcoins also will reach a $400B market cap and possibly more in the next bull run, which is probably coming end of 2018 or early 2019. A $1T market cap of the replacement of Bitcoin is possibly within the next year.

This would lead to the following investment returns


.

  1. Ethereum from $28B to $1T = 35x
  2. IOTA from $1.4B to $1T = 714x
  3. Elastos from $77M to $1T = 13,000x

However, in reality, the number one spot will probably be shared by at least 3 of these coins, so that the market caps will be something like this

  1. Ethereum from $28B to $300B = 11x
  2. IOTA from $1.4B to $300B = 220x
  3. Elastos from $77M to $300B = 3,900x

There are 2 other popular candidates that did not make it into this group, because of the following reasons.

Nano:

The problem is that 1% Nano's representatives currently hold 92% of the voting power. This is not good. This will probably even out in the future, but we should remain sceptical for that

Cardano:

Cardano is using a modification of generic PoS, which always leads to centralization towards the rich and powerful in its generic form. In its consensus algorithm Ouroboros, smaller coin owners can band together and stake against large coin owners together, thus preventing centralization towards the rich and powerful. However, this entails staking pools, which leads to centralization again and introduces a single point of failure, where an attacker could take over a staking pool. Hopefully, Cardano realizes this and makes a change. There is a way to prevent their algorithm to be vulnerable to that.


Conclusion :-

Ethereum isn’t there yet with its technology, though they have an advantage in terms of branding, awareness and adoption already.

IOTA comes from a different angle. They do not offer dapps yet, but they have a very fast and unique technology with their Tangle, which is the fastest among all the below 3 platforms.

Elastos already has the tech and outstanding functionality.

In terms of investing, I would allocate funds this way

  1. 10% into Ethereum from $28B to $300B = 11x
  2. 45% into IOTA from $1.4B to $300B = 220x
  3. 45% into Elastos from $77M to $300B = 3,900x
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