"The next big thing is the one that makes the last big thing usable."
-Blake Ross
In 1992, I had a very serious case of gadget envy. I was a busy mid-level manager at DuPont who had loads of outside activities. I was finishing up my MBA, playing industrial league basketball and softball, chairing a committee at church, teaching Sunday school and, oh yeah, enjoying my life at home with my lovely and talented wife and new baby daughter.
The promise of a gadget that would organize my hectic lifestyle by keeping electronic track of my calendar and contacts was too much to resist. I couldn't wait for the Apple Newton, the first personal digital assistant. It was set to revolutionize how we lived.
Despite my high expectations, when the Newton was introduced in 1993, it failed miserably, even famously. The flop of the Newton was so widely heralded that the Doonesbury comic strip lampooned the device's horrible handwriting recognition software for a whole week's worth of comic strips, the most infamous one being when comic strip character Michael Doonesbury writes "Catching on?" and his Newton deciphers that as "Egg freckles?"
Despite being a commercial and technical fiasco, the Newton left a lasting innovation legacy that is still with us. Today's smartphones are just natural extensions of the Newton technology, right down to using the same low-energy ARM processor.
As for me? I read the early reviews of the Newton that praised the concept but railed against the execution and decided to pass. My patience was rewarded when the first Palm Pilot PDA went public in 1996. The Palm was a device that did three things and did them well - calendar, contacts, and to-do lists were excellently managed, and this time, Palm's Graffiti handwriting recognition software really did deliver. The Palm was a success, the next logical step after the Newton's demise. And the Palm also led to what was arguably the first great smartphone, the Treo, which dominated the smartphone market right up until the introduction of the Newton 2 - umm, I mean the iPhone.
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So the question before us is this - will Bitcoin follow in the Newton's footsteps as a brilliant innovation that ultimately fails yet leaves behind a technical and conceptual legacy from which others can build?
Or will it be more like the Microsoft PC operating systems that dominated the early commercial adoption of the PC and continues to utterly dominate the market today with a market share just a tad below 90%?
It's an intriguing question - but the more useful question is this - after the wild ride that Bitcoin and cryptocurrencies have been through in the last few months, is there money to be made in this new financial world?
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Bitcoin vs. the Rest of the Cryptocurrency World
Up to now, we've used Bitcoin as a stand-in for all cryptocurrencies as we discussed some basics about the coins. But now let's branch out.
Bitcoin certainly has "first-mover" advantage and is practically the generic term for cryptocurrencies as a whole. This is much like Kleenex which, in actual use, has become synonymous with facial tissue.
This is so much the case that in the digital currency world, there are two categories - Bitcoin and everything else. The "everything else" category even has a name: altcoin. Altcoin is obviously the combination of alternative and coin and is the term of art for any cryptocurrency other than Bitcoin.
There are slightly more than 1,500 altcoins out there. More than half have a market capitalization (total value) under a million dollars.
And since there is little regulation of this new gang of cash alternatives, it is prudent to be cautious as you consider cryptocurrencies.
The simplest guidance I can give is twofold: First, use speculative money in this area. Speculative money is money you'd be OK losing, but are accepting that higher risk to find higher returns.
Second, get fully educated in the whys and hows of this market - find someone who is.
Bitcoin vs. Altcoins
If you're interested in investing or trading in cryptocurrencies, is Bitcoin the "right" coin? It depends...
If you'd like to make a "buy-and-hold" speculation on the long-term success of digital currencies as a group, Bitcoin is the highest probability play. This is because of the first-user advantage mentioned above. And Bitcoin is still clearly the 800-pound gorilla of the digital currency world.
Total market cap for cryptocurrencies is estimated at $454 billion - almost half a trillion dollars. And Bitcoin accounts for almost 40% of that market cap.
On the other hand, if you're looking for maximum growth potential, altcoins are certainly the way to go.
It's much like investing in large-cap tech stocks versus small-cap startup companies. Large-cap stocks have lower risk but still have good upside. Small-cap stocks have the potential for much bigger returns - but could also fail outright.
And like Apple's Newton experiment in the early 1990s, Bitcoin could wind up being the first innovator that gives way to new competitors who build on its early innovations.
Whichever coins emerge as the leaders in the field, there's no doubt that cryptocurrencies are a new frontier for investors and traders. Huge gains have been seen already, and there are more to come. But those potential big gains have to be weighed by our 10-Minute Millionaire risk management mindset. So just throwing money at little-known cryptocurrencies hoping that one will hit is a process that sounds more like a buying a lottery ticket than an investing or trading strategy.
In future articles, I'll dig into the potential drivers for more cryptocurrency upside - and the potential speed bumps and road blocks.
We'll also look at ways to research cryptocurrencies that can lead to making good risk-reward investments.
For those who are looking to put some money into this new frontier, I strongly suggest that you get some guidance from people who have been digging into the 1,500-plus coins out there and have a systematic approach to choosing the best candidates - like my colleague here at Money Map Press, Tom Gentile.
You see, Tom uses stringent criteria to vet all of his trade recommendations – showing readers 81 triple-digit winning moves in 2017 alone.
Now he’s seeing the “Buy” signal on a cryptocurrency trade he thinks could turn a small stake into more than $40,000, based on his analysis.
In a special video presentation, Tom walks you through the process for placing this crypto trade. You’ll get the name of the coin, watch Tom make the trade, and get all the key details – at no cost, and in under three minutes.
He’s expecting this little-known coin’s price to surge very soon – and everyone holding it beforehand could see massive profits. Everyone else… they may have to miss out.
Click here now to see Tom’s presentation and get his crypto recommendation for free…
The post Your Profit Path for Bitcoin and Cryptosecurities appeared first on 10-Minute Millionaire.
About the Author
D.R. Barton, Jr., Technical Trading Specialist for Money Map Press, is a world-renowned authority on technical trading with 25 years of experience. He spent the first part of his career as a chemical engineer with DuPont. During this time, he researched and developed the trading secrets that led to his first successful research service. Thanks to the wealth he was able to create for himself and his followers, D.R. retired early to pursue his passion for investing and showing fellow investors how to build toward financial freedom.