Tuesday, December 24, 2013

A New Wave of 2nd Generation Cryptocurrencies: NXT, eMunie, SkyCoin, EarthCoin

Recap

In my last blog post, I recommended three alt coins to look out for: WorldCoin (WDC) , NXTcoin (NXT), and DogeCoin (DOGE). For those of you who followed my recommendations, I hope I helped you to make a decent profit. But for those of you who didn't, fret not, because there were 10 altcoins launched in the last 2 weeks alone, and so definitely more opportunities & recommendations coming your way!

I think one of the best ways to trade altcoins is to invest early in newtechnically innovative, and strong (community, branding, developers) cryptocurrencies. Typically, I look out for certain technical aspects in a cryptocoin, including fast transaction times (1 minute or less), higher security, being able to overcome certain limitations Bitcoin possesses, or factors that can potentially give the altcoin more value. I also covered some important aspects of a cryptocurrency, such as marketing, branding, development and community in an earlier post here.
Since I recommended them on the 16th of December, we have seen a nice growth from each of them:
  • WDC has risen from 0.0003 WDC/BTC to its current rate of about 0.0006; a 2x increase.
  • NXT has risen from 800 Satoshis (0.00000800) per NXT, to a current price of 5500 Satoshis; a 6.8x increase.
  • DOGE has risen from a low of 30 Satoshis per DOGE, to a high of 200 Satoshis (6x increase), and is currently trading at 85 Satoshis (3x increase).

As you can see from the previous post, both new coins (NXT, DOGE) made a good 6 fold increase, and I believe that we can expect the same huge growth for almost all subsequent new potential altcoins. The altcoin scene is growing at an exponential rate, and I will do my best to keep up with new coins and give you guys good recommendations. On a side note, it is interesting to see that even new clones (with no innovation) can end up gaining 10x or more value, so maybe it's all just a matter of first-mover advantage? And I'm not referring to DogeCoin, because I personally think DogeCoin has tremendous value in it's reach and backed up by a large community with a common emotional bond to the Doge meme, which matters A LOT in branding.

Introduction

So in this post, I want to cover another 3 cryptocoins to watch out for over the next weeks and months. 2 of them are so-called "2nd generation" cryptocurrencies, which have gained popularity recently since NXTcoin's rise to fame. It could be very interesting to see how these (and other newer) 2nd generation altcoins will develop over the next year, and what they can bring to the cryptocurrency table. Will these 2nd generation coins really be the beginning of something new, and spawn a new era of cryptocoins that have significantly more value/benefits than Bitcoin? I only found out about these 3 coins yesterday, and am excited to share them with you! Tell me what you think about them in the comments section below.

Credit goes to Twitter user @Tasorrog for introducing me to 2 of the coins I will be talking about here; eMunie, and SkyCoin. Lastly, I will also discuss another interesting altcoin, EarthCoin, that has some unique technical specifications, and also gained much attention since the 20th of December.



eMunie (EMU)

eMunie (eMu) was first announced sometime in June 2013, and has been in Beta testing since. It kinda went into hiatus for a few months, before picking up some momentum and attention again this month as people anticipate its official launch in January 2014.

Like NXT, there is no mining involved. But unlike NXT, eMunie has an infinite supply of coins, which interestingly is dependent on the demand of the coin. It is rather complicated, but user windjc succinctly explains it in an eMunie forum thread here:

"The entire beginning total of Emus will be created in 1 genesis block. 

Anyone can invest during the 30 day pre-launch investment period. The cost is .10 cents per Emu. So if the entire investment is $1 million, then the genesis block will contain 10 million Emus. 

Later as demand for emus increase, to keep price for going up dramatically, more emus will be "hatched" and those will be dispersed to both hatchers and coin holders. So by owning coins you will receive a % of the new coins. 

So there is eventually a limitless amount of Emu that will be created. It will depend on demand."

This will in turn keep prices more consistent, with a more sustainable growth compared to existing cryptocurrencies. In addition, it is also an attempt to improve fairness in coin distribution, and reduce susceptibility to Pump & Dump schemes.

To achieve this, eMunie will be launching with a pre-sale. Timb, a beta tester, pointed out on this thread about the pre-buys that there will be 100,000 EMUs available for the public during this pre-sale, and also discussed how the initial developers, contributors & beta testers will be rewarded for the work thus far. The pre-sale will last for 30 days. The exact date of pre-sale has not been confirmed, and was mentioned it will be delayed and would take a few more weeks, and that there's "no rush to completion by the developer".

I'm assuming this will be sometime end January, or early February, but don't take my word for it. To get the latest updates, sign up and be part of the pre-sale for eMunies by simply sending an email to prelaunch@emunie.com and they'll add you onto the list. For more information about the Pre-sale, please visit this comprehensive eMunie Pre-sale FAQ thread.

For more information on eMunie, here are a few more good sources to get your started:




SkyCoin (SKY) made its prelaunch announcement on the 22nd of December 2013. It has a total supply of 100 million coins, which like NXTcoin, requires no mining and all coins are already on the market. It uses the Proof-of-stake (PoS) system instead the Proof-of-work (PoW) system used by Bitcoin, and hence completely removes the mining process.

SkyCoin brands itself as a second-generation cryptocoin, and also boasts a quick transaction time of under 15 seconds, a higher level of security, and improved ease of use. Some of its features are listed as follows:

  • Uses protocol called Obelisk instead of PoW. Obelisk is a provably secure PoW alternative for creating fair total orderings in decentralized systems with adversarial nodes. Obelisk was chosen over other proposals because it is provably secure and can be layered over Bitcoin's existing security model to eliminate the possibility of 51% attacks. 
  • Transactions are free. Users receive coin-hours for each hour they hold a coin. Coin-hours are spent on transaction fees. Transactions bid to enter a fixed sized block. 
  • Transactions are fast. Most transactions are executed within fifteen seconds. Off blockchain transactions are instant. 
  • Inflation capped at 2% per year. Inflation will be used to fund open-source projects which enrich the community. Skycoin stakeholders will have per-project governance over project funding.

Depending on SKYcoin's entry-to-market price, we could see it grow in a similar fashion to NXT, as they both have rather similar specifications. I'm still unsure when SKY will officially launch, if someone out there knows, please let me know!

Note: This should not be confused with a dying altcoin, also named SkyCoin (SYC), but with a different ticker name.




EarthCoin (EAC) also recently launched less than a week ago, and a Bitcointalk forum post that started on the 20th of December has generated large amounts of attention and discussions, with over 75 pages of replies as of today. Apparently, the launch also attracted so much attention that the mining difficulty increased from 1 to 9 on the first day, before falling back down to 6.

EarthCoin is a Scrypt algo coin, with 60 second block target, a total of 13.5 billion coins, and a premine of 2% for support purposes. For more information on EarthCoin's technical specifications, visit this cryptocointalk introduction post. Although this altcoin is not as innovative as the previous two mentioned, it does have some very interesting technical differences. Cryptomaster highlights very well in an EarthCoin post on his blog, and an abstract is shown below:

"EarthCoin uses a 365 day period. It will start with 10,000 coins per block, and it varies in a sine curve with amplitude of 2,000, with a period of one year (like the Earth moving around the Sun). 

This means that you start with 10,000 coins, and it adjusts at each block, reaches a maximum of 12,000 coins per block after about 3 months, then it will descend gradually to approx 10,000 coins per block again at about 6 months. Then a new minimum of 8000 coins per block at about 9 months. 

Then we reverse that – to climb and return to 10,000 coins per block at one year, before finally cutting the payout in half."

Source: http://cryptosource.org/earthcoin-launches-neat-idea/


Lastly, I just wanted to comment on the issue of premining around EarthCoin. In again another of Hazard's post, this time calling EarthCoin a scamcoin because of the premine. There have been tons of coins with premines popping up lately, and it's sad to see that many have simply dismissed some potential altcoins because of the failure of others. Here's another discussion about the premine on Reddit.

In the case of EarthCoin, only 2% is premined, and is said to be "for promotions, giveaway, bounties, dev and long term support." First of all, they were transparent about it, and I think it is a rather reasonable rate. Of course, this is provided that the developers use the funds wisely, and aim for a fair distribution of the premined coins in exchange for a larger adoption/reach.

I have no clue how this is going to go in the end, but I don't have incredibly high hopes for it either. The main reason I have highlighted EarthCoin is because it is new, there is large interest in it, and is not currently on any exchange which means that we can expect a large growth as an early adopter.



This is only a preliminary investigation into these 3 cryptocurrencies. Please invest at your own risk. If you have questions or comments, feel free to leave them in the comments section below!

Always remember, Buy Low, Sell High! Avoid the herd mentality, and like Warren Buffet likes to say:

"Be fearful when others are greedy; and be greedy when others are fearful."


To end off, I'd like to share a video by Chris Dunn, a technical analysis & short term trader, whom I have been following for the last 3 or so weeks. He has made very good Bitcoin predictions over the last weeks (whether it's just luck or not, you decide for yourself), and also gives very good insight into understanding market psychology as a way to beat the market. If you like it, watch his other videos as well, and follow him on twitter @ChrisDunnTV.




Good luck trading. Peace.

1 comment:

  1. Can't wait for eMunie personally. Also Curecoin when it comes out.

    ReplyDelete