Ripple and IOTA

People have transitioned from asking me about BTC/ETH/LTC to altcoins, so I figured I'd write a little on the two most asked about coins.

Ripple

I'm very conflicted on Ripple. From a pure blockchain perspective, it isn't ideal. On the other side of the coin, they have some serious and impressive partnerships with the big banks (which crypto focuses on "replacing" to a degree).

Ripple (the company) owns 61% of all Ripple, and it isn't a mine-able coin. So, in essence, there's a company at the center of this whole thing, holding ~$47 Billion worth of Ripple (at the time of this writing). No matter how you break that down, that's not good. The whole point of blockchain is to decentralize, and the company running the show has all the power in their hands to manipulate the price if they wanted to. Their leadership is claiming to be putting a whole bunch in escrow and slowly releasing 1 billion into the market each month, but that may be subject to change.

To be clear, by buying this coin, you're investing in a company and not a technology/movement. If the company goes under, Ripple dies. If 61% of bitcoin users suddenly "lost" all their coins, it could theoretically move on, based on actually being decentralized. Remember, this is a very volatile space, and not every coin/tech will be adopted long term.

So, what's good about it? As a quicker/cheaper payment processing system, it actually does quite well for the larger institution. There really isn't a use case for the "little guy" to use it as a payments processing medium. Look, big banks aren't going away. There's plenty to be said about their ability to manipulate even the bitcoin market, but why not take a bet on something that's being used by the big players and influencers? It's a start - we need these big companies to adopt and embrace blockchain, even if Ripple isn't a true, decentralized blockchain solution.

Here's an oversimplified 1 minute video explanation of Ripple.

Wow! (sort of)

Finally, Jed McCaleb was a co-founder of ripple, and he's one of the OGs in the big picture. He has since left Ripple to go and co-start Stellar (check out Stellar Lumens, or read up on Jed if you're interested).

While Ripple probably falls in the "myspace" bucket, I feel there is a whole bunch of short term value in it. With that said, take a look at its market cap. Right now, it's half a billion away from being the #3 market cap crypto. Just because each coin is under $1 right now doesn't mean it has the ability to hit $18k+ each like bitcoin. This isn't the place to be educated on market cap, so please research that elsewhere if you'd like to understand it better.

Here's a previous post I made regarding how to buy altcoins like Ripple.

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IOTA

IOTA is VERY interesting. It has some huge potential, but it's also one of the most ambitious projects I've ever read about. The idea is to marry IoT (BUZZWORD) with blockchain (ANOTHER BUZZWORD!), with something that describes itself as a blockchain without blocks or a chain called "The Tangle"

Ok. The tech behind it is quite confusing - explaining that in order to transact, it needs to be signed (by the private keys), and then your device is forced to validate two other transactions before executing the one it's trying to execute, but it requires some Proof of Work without any "benefit" - which is confusing since this is a non-mineable coin with no transaction fees.

Basically - the entire IOTA network props itself up to validate transactions, so it doesn't have fees. The more people use IOTA, the more efficient it becomes (with respect to network bandwidth being the constraint). Quite the opposite of standard blockchain.

So, what did you just read? The approach with The Tangle is that it's more scalable than a typical blockchain solution, as it can take part of itself offline (and essentially partition itself off of the main tangle). Imagine this as a side-tangle that a company might want to use for an IoT supported warehouse. This can also be seen as a weakness if a side tangle hasn't had the appropriate time/connectivity to validate some of those transactions.

The pitch is that we're currently working toward "smart centralization". There are smart devices everywhere, essentially driven by cloud solutions (cloud storage, thin client, etc.). IOTA's pitch is to move toward "smart decentralization" - revolving around data sharing, real-time decision making locally by IoT devices/sensors.

Consider it as a "sharing" economy - anything with a chip can be "leased", and those devices can trade resources with one another.

Ok, ok, ok - why should you be interested in this? So far, IOTA has transacted over $100 million with no fees, and it claims to have more transactions per second than any blockchain (based on the tangle stuff you may have skipped reading about above). It's driven by a non-profit in Germany, so that's already a plus over other projects that are in it for personal gain.

At the moment, it isn't REALLY decentralized - that's going to require a lot more adoption. If the whole solution was perfect and well oiled machine, you wouldn't see prices where they are now. It's certainly a work in progress.

Here's a 2 minute video explaining IOTA in less dry terms.

Here's that previous post again I made regarding how to buy altcoins like IOTA.

Please take everything I've written with a grain of salt - this isn't investment advice! Do your own research before investing, and only put in what you can afford to lose completely.

This is my interpretation/understanding of these technologies. I may be completely wrong, and would love to be corrected if anyone sees any fallacies or inconsistencies in what I've written.

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