If you wish to understand regarding cryptocurrency, it is best to talk with somebody like Bobby Ong, whose interest in trading it on-line for a profit impressed him and his partner Tim Lee to form CoinGecko, an internet site that ranks totally different sorts of altcoins.
We recently checked in with Bobby to find out some altcoin basics and obtain his predictions for the longer term of cryptocurrency. Here’s what he had to say:
What is cryptocurrency?
I will first quickly clarify what is Bitcoin and afterward stretch out the idea further to cover digital forms of money by and large.
Bitcoin is a type of digital money that utilisations cryptography to deal with the security of every exchange and to control the production of new units. There is no national bank dealing with the money related supply of the cash, yet its fiscal standards rather have just been coded into the system by its unknown founder(s), Satoshi Nakomoto. The trustworthiness of the system is then kept up by a system of decentralized diggers who take care of cryptographic issues.
Cryptocurrency money is a type of computerized cash, as it utilizes cryptography in keeping up the uprightness of the system. Bitcoin is the primary decentralized digital money. Numerous different cryptographic forms of money have since been made, some dependent on Bitcoin’s source code and others being coded starting with no outside help. These elective digital forms of money are otherwise called altcoins.
Who uses cryptocurrency? Where can it be used?
At this point in time, cryptocurrencies are used by a group of tech-savvy individuals who value privacy, especially in light of recent massive data breaches like Target’s credit card information breach.
Bitcoin can be used to purchase many items, with Coinbase and Bitpay providing merchant processing services. Nearly 90,000 businesses are using Coinbase or Bitpay to accept Bitcoin. Expedia, Dell, Overstock and Microsoft are some of the major companies accepting Bitcoin as a form of payment. Users interested in using altcoins to pay for their purchases can make use of ShapeShift Lens that will pay a Bitcoin address using the user’s altcoin of choice.
However, it should also be noted that Bitcoin has a notorious history of being used for shadowy purposes like drug purchases on Silk Road and for online gambling.
Can you tell us the story behind CoinGecko?
One evening, my partner TM and I were discussing some strategies on how we can profitably trade alternative cryptocurrencies in the market. We were both looking for a more effective way to spot early price trends after missing out on the huge spike in Dogecoin prices, thereby forgoing a profit opportunity for a coin that we both initially thought was a joke.
We researched methods to help give us a competitive advantage and found people sharing various methods of evaluating cryptocurrencies by looking at community engagement and developer activity. We found that those sharing these ideas were making many qualitative claims without having much data to back up their claims. Some people made a time-consuming attempt to manually collect some of these data to evaluate altcoins.
We reckoned that there must be a better way for data to be automatically collected and altcoins to be ranked in a fair way. We decided to give this a go to help other traders and ourselves obtain a more comprehensive overview of the altcoin market, and that’s when we started our first steps in creating CoinGecko.
Who should be visiting CoinGecko? What will they find?
CoinGecko is a cryptocurrency ranking website that aims to give a 360-degree overview of the cryptocurrency market. There are now over 500 altcoins in the market, and evaluating each of these coins is time consuming. At the time of writing, CoinGecko collects data for over 200 of the most important cryptocurrencies and benchmarks them against a set of standardized metrics to rank them. In determining the health of a cryptocurrency, we look at developer activity on the open-source repository, community engagement on social media channels, trading volume on exchanges, public interest and market capitalization.
Our efforts in collecting all these data have generated a lot of interest among cryptocurrency traders, coin community members and also university researchers. Traders find our price pages such as the following Dash price page beneficial in looking at historical price charts. Coin community members find the wealth of data that we have insightful in gauging the progress of their favorite cryptocurrencies. University researchers, meanwhile, find the data on our individual coin pages very useful in observing the state of cryptocurrency markets.
How did you become interested in cryptocurrency?
I became really interested in cryptocurrency during the Cypriot financial crisis in 2013. The threat of bank deposit seizures by the Cypriot government for deposits supposed to be protected under the federal deposit insurance scheme brought me to ask if federal deposit insurance schemes can really be trusted.
A statement by the government can remove the trust almost immediately, and when reports of Cypriots attempting to use Bitcoin to protect their assets began surfacing, I was really intrigued in finding out how Bitcoin can be used to protect assets against unwarranted seizures.
Bitcoin’s proposition of “being your own bank” – whereby users can control their own private keys containing the “password” to spend funds and thereby trusting no one except themselves to hold the funds – struck me as a very innovative way for users to prevent seizures of assets. I immediately saw a low-cost use case for users to protect their assets without trusting anyone through this decentralized network.
What are the advantages of cryptocurrency?
Cryptocurrencies provide a low-cost way to transfer value from one user to another 24/7, 365 days a year. It also has a very low minimum transfer amount. As a result, many companies are finding Bitcoin a good use case for remittance, payments and micro transactions.
Traditional remittance providers like Western Union charge high rates for remittance, which Bitcoin companies are trying to reduce. Payments using Bitcoin can also save merchants the usual fees or merchant discount rate of 1-3 percent. Also, because Bitcoin transactions are pushed by consumers instead of being pulled by merchants, this will significantly reduce the occurrences of fraud. Bitcoin transactions are irreversible; and because of that, merchants can be assured that payments received will not be charged back by banks because of fraud.
Using cryptocurrency, it is also now possible to send small amounts of money across the Internet. For example, using ChangeTip, it is now possible to tip a Twitter user $0.10 for a good tweet or to tip a Youtube video creator $0.40 for a video that is entertaining. Traditional payment rails using credit cards have a minimum payment amount of $0.50. Dogecoin made its name as the first cryptocurrency that popularizes the idea of tipping.
Another advantage of cryptocurrency is the pseudonymous nature of the currency. Because there are no names associated with each payment address, it will require more effort to associate a particular transaction or address to any particular user, and some users like the privacy that is offered.
What are the most popular forms of cryptocurrency? What are the most valuable?
Bitcoin is the most popular and valuable form of cryptocurrency now. It is the first decentralized cryptocurrency and has the largest network effect. All other cryptocurrencies pale in comparison to Bitcoin as can be seen by metrics shown on CoinGecko.
The first altcoin, Ripple, was only launched two years after Bitcoin was created; and this is one of the many reasons explaining why all other cryptocurrencies are not as popular or valuable as compared to Bitcoin. Bitcoin is also pretty much the de facto reserve currency for all cryptocurrencies, thus further boosting its value.
What headlines surrounding cryptocurrency are you following closely today?
I follow the legal and regulatory aspects of cryptocurrency very closely. Because cryptocurrencies involve cross-border value transfer, a lot of existing financial regulations apply to operators in this ecosystem. Different countries are taking different approaches in regulating cryptocurrencies, and development of the ecosystem will flourish in geographic boundaries which take a more light-handed approach like the U.K. – compared to more stringent states like the BitLicense in New York.
I also follow cryptocurrency innovation and new coin launches very closely because we track and rank these coins. I also pay close attention to headlines of scams because bad actors hurt all players in the industry and the industry needs to do a better job at self-regulation.
I look out for all these headlines, and at the end of each week, I send out a weekly cryptocurrency newsletter called AltcoinWeekly containing the top news stories of the week.
What do you think is the future for cryptocurrency?
We are still at the infancy of cryptocurrency and blockchain technology development. There is a lot of experimentation in general because of the permission-less innovation nature of cryptocurrencies, and there will be many trials and errors before a good use case is found.
I think in the long run, cryptocurrencies will most likely play a large role in machine-to-machine interactions in the Internet of Things future. Distributed Autonomous Organizations will also play a large role, with smart contracts executing automatically based on events. In general, I think cryptocurrency and blockchain technology hold some key ideas that will make the traditional financial systems more efficient through lower cost structures.
In the medium term, I see a very strong use of cryptocurrencies in the remittance and microtransaction industry. A lot of venture capital are flowing into Bitcoin companies that aim to reduce the cost of cross-border payments and also enable small value transfers over the Internet. Online tipping might become a norm of the future, and new business models might develop such as content creators charging small fees for consuming their articles or videos instead of relying on advertisements