I haven’t seen a thread aggregating what are perceived to be the biggest strengths and weaknesses of all of the top cryptocurrencies so I thought I’d have a go at that here as it is not only useful for me personally but probably also a number of other people relatively new to the world of cryptocurrencies.To start with, I’ve listed 3 pros and 3 cons for each of the top 25 assets. I’ll try to remain objective. However, I am not a financial advisor, and this is based solely on my own reading and what I think seems to be some kind of consensus. If you think there needs to be things added or removed, let me know below and I’ll endeavour to update this list in reasonable time. Also, please feel free to help me add any other coins below.I hope this can be a civil discussion without the need for tribalism.—Bitcoin (BTC)Strengths• Widespread institutional involvement making it a store of value & fiat hedge• First mover advantage/name recognition = head start on real world adoption• Deflationary fully decentralised tokenomicsWeaknesses• High transaction fees• Scalability issues = slow transaction times• Huge environmental cost due to proof-of-work concept—Ethereum (ETH)Strengths• First mover advantage in the smart contract space• Most developers, nodes, and dApps of any cryptoasset• Network is Turing complete = widespread use and potential applicationWeaknesses• Inflationary tokenomics (no fixed cap)• Scalability of transactions causing high gas fees• Unpredictability in timescale of upgrades, including proof-of-stake Eth 2.0—Binance Coin (BNB)Strengths• Enables smooth trading within largest exchange and BSC with low fees• Fast network due to centralised nodes• Greater crypto adoption/use of Binance = increased demand = increased valueWeaknesses• Centralised control = contrary to ideals of cryptocurrency• Exposed to greater risk of price shifts due to centralised control of supply• Risks being treated as a security by SEC as tied to private company profit—Cardano (ADA)Strengths• Strong development team with evidence-based approach• Transparent roadmap towards decentralisation, scalability, and security• Deflationary tokenomics, involving staking supportWeaknesses• Staking addresses link to wallet addresses• Long rollout with not all planned aspects fully usable• Censorship can exist due to separation of computational and settlement layers—Tether (USDT)Strengths• Most widely used/highest liquidity stablecoin on exchanges• Strong record of holding currency value against the dollar• Legal battle with New York Attorney General recently settledWeaknesses• Stablecoin so no more designed as an investment itself than the US dollar• Centralised supply, which can be minted whenever team decides• Perceived unscrupulous behaviour by team, misleading about how it’s backed up—Polkadot (DOT)Strengths• Most widespread use of token governing cross-blockchain interoperability• Enabling secure parallel chains for scalability and reducing transaction fees• High degree of developer flexibilityWeaknesses• High fees to run nodes to validate network• Limited developer adoption compared to Ethereum• Large amounts of assets held by relatively few wallets—XRP (XRP)Strengths• Enables fast cross-border payments, particularly targeting businesses• Name recognition and early market leader in payments space• Negligible feesWeaknesses• Strong competition + regulation in market space = slow adoption• Highly centralised nodes, privately held for proof-of-correctness algorithm• Recent delistings from exchanges and halts to trading due to court cases—Litecoin (LTC)Strengths• Faster transaction confirmation that its direct competitor Bitcoin• Long-standing trusted cryptoasset with historically solid top 10 ranking• Near ubiquitous listing on exchanges and some mainstream adoptionWeaknesses• Limited developmental input recently in comparison to other projects• Growing move away from Litecoin as a Bitcoin hedge due to stablecoins• At risk of being devalued if Bitcoin can be effectively solve scalability—Chainlink (LINK)Strengths• First mover advantage in blockchains/off-chain data feed communication• Benefits from rise in value of businesses and blockchains it partners with• Expansive market space for use of native network in real world applicationsWeaknesses• No clear roadmap or timescale for future developments• Impacted somewhat by the speed of the Ethereum network for data transfers• Relative centralisation of stored token assets—Bitcoin Cash (BCH)Strengths• Similar computational structure to Bitcoin and therefore easily co-adopted• Addresses the scalability issue of Bitcoin specifically• Smaller fees than the majority of its direct competitorsWeaknesses• Perceived negativity surrounding its leadership, marketing, and community• Direct competitor of Bitcoin which has a large market advantage• Variably poor throughput of transactions resulting in low revenues for miners—Stellar (XLM)Strengths• Fast cross-border payments between individuals• Negligible fees• Not-for-profit philosophy = inclusive global payment system compared to XRPWeaknesses• Competitor of XRP without first mover advantage• Nodes are privately held for consensus algorithm, with little financial incentive• Small centralised development team—USD Coin (USDC)Strengths• Ethereum network stablecoin with fast transfers stabilising other cryptoassets• More positive press than nearest direct competitor Tether• Institutional backingWeaknesses• Stablecoin so no more designed as an investment itself than the US dollar• Strong competition from other stablecoins including market leader Tether• Uncertainty if regulation will impact stablecoin use long term—Uniswap (UNI)Strengths• Tied to performance of burgeoning market-leading decentralised exchange• Enables holders to engage in the exchange’s governance activities• Developer team planning major upgrades later in year = version 3Weaknesses• High initial distribution to relatively few developers• Ethereum network token so fees high at times of congestion• Persistently inflationary tokenomics—Dogecoin (DOGE)Strengths• Fun and engaging story/community encouraging new users of crypoassets• Low transaction fees• Relatively quick transaction times leading to some real world adoptionWeaknesses• Celebrity impact = pumps and dumps unusual for high market cap assets• Long term inflationary tokenomics with high supply• Virtually no development for many years—Wrapped Bitcoin (WBTC)Strengths• Allows Bitcoin liquidity to be used easily within the Ethereum network• Expands use of decentralised finance network• Takes the security of bitcoin with the usability of smart contract tokensWeaknesses• Wrapping is a centralised process, relying on trust of a central body• Wrapping can’t be automated within Ethereum = reduced integrity of decentralised network• Transactions of token subject to potentially high Ethereum gas fees—OKB (OKB)Strengths• Allows low fee trading on the OKEx exchange, the second largest centralised exchange• Buy-back and burn deflationary tokenomics• Can be used as payments for any goods and services partnered with NOWPaymentsWeaknesses• Centralised control of token supply and withdrawal• Multiple OKEx controversies including suspending withdrawals for one month• ERC-20 token subject to potentially high Ethereum gas fees for transactions—NEM (XEM)Strengths• Blockchain uses novel proof of importance algorithm to improve fairness vs proof of stake• Applications for transfer of assets, votes, contracts, etc. can be coded in any language• Major upgrade announced for March 12 which XEM holders can opt intoWeaknesses• Few key meaningful differences in application to Ethereum, its main rival• Reputation of team for not being marketing savvy in not finding user base• Low developmental transparency with poor user interaction—Aave (AAVE)Strengths• Tied to market leader of non-custodial transparent decentralised lending• Holders can partake in project governance• Discounts on borrowing for holdersWeaknesses• Variety of financial options complex and not necessarily intuitive for new users• Limited current adoption beyond the crypto space• Transactions of token subject to potentially high Ethereum gas fees—Cosmos (ATOM)Strengths• Unlimited ecosystem of independent interoperable dApp-specific blockchains• Improves scalability in smart contract system compared to current Ethereum network• New developments more easily added vs Polkadot = greater adoption potentialWeaknesses• Tendermint consensus algorithm is limited to fewer validators than competitors• Less fundamental need for native ATOM token within network compared to competitors• No capped supply on tokens—Solana (SOL)Strengths• Billed as the fastest blockchain with token used to pay transaction fees• Smart contract compatible with scalability built in• FTX recently selected Solana blockchain as basis for their decentralised exchange SerumWeaknesses• Large amount of tokens held by development team• Relatively recent rise to prominence so concerns that value may be unpredictable• Recent blockchain bug caused 6 hour outage—Crypto.com Coin (CRO)Strengths• Close ties to fiat financial world through exchange and card = more adoption• High interest rates when staked on native exchange• Team trying to increase decentralisation preparing for upcoming blockchain launchWeaknesses• Little fundamental use case outside of exchange ecosystem• Centralised supply of token with centrally made major developmental decisions• Transactions of token subject to potentially high Ethereum gas fees—Monero (XMR)Strengths• First mover privacycoin where transaction tracing is virtually impossible by design• Highly decentralised development and governance• Low transaction fees compared to other proof-of-work projectsWeaknesses• High complexity of code and blockchain causing more challenging integration to markets• Governmental regulation more likely which could curtail listings and activity• Proof of work algorithm coupled with complexity results in scalability issues—EOS (EOS)Strengths• Much higher transaction speeds than main competitor Ethereum• Negligible transaction fees• Capacity to run industrial-scale decentralised appsWeaknesses• Extremely few existing nodes and inherent difficulty for more• Essentially hitherto outcompeted by Ethereum and others for dApp takeup• Community is sour on future and project founder has left recently—Bitcoin SV (BSV)Strengths• Hard fork from Bitcoin Cash with strong vision to create viable payments system• Large block size enabling fast transaction speeds in comparison with BCH• Minimal transaction feesWeaknesses• Multiple security lapses due to problems with blockchain code• Fast transaction speeds/low fees has been more successfully adopted using other algorithms• Strong negative feeling from many in crypto community, many of whom regard it as a scam—TRON (TRX)Strengths• Strong vision of empowering content creators to have ownership of their own web content• Smart contracts can be created in many programming languages = easier development• Faster transaction speeds and lower fees than competitor EthereumWeaknesses• Concerns regarding the ethics of founding CEO and team• Very similar code to other projects but not implementing their more recent innovations• Delegated proof-of-stake confirming process prone to becoming centralised
Submitted February 27, 2021 at 12:28AM
No comments:
Post a Comment