How Can Value Investors Profit in the Crypto Ecosystem?

How Can Value Investors Profit in the Crypto Ecosystem?

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Tokens that achieve substantial price gains may have little utility in the real world. Instead, they tend to attract capital based on price trends and technical analysis. When these technical indicators fall short, crypto trading can seem to be nothing more than mere speculation.

Value investing provides cryptocurrency traders with an arguably more effective method for investing. Instead of performing technical analysis, value investors seek out assets that they believe the market has undervalued. Thus, value investors tend to be long-term investors, as they believe market prices will eventually reflect a token’s long-term fundamentals. 

A select number of tokens gain an inordinate amount of attention from value investors. Among these are the five tokens listed below, each token listed provides investors with a strong rationale for holding long-term.  

Monero (XMR). Monero primarily focuses on privacy and decentralization. In light of current privacy concerns, when it comes to Monero there are no similar competitors among major cryptocurrency coins. 

In the United States, a proposed infrastructure bill is being debated with provisions that will ultimately do away with the pseudo-anonymity associated with cryptocurrencies. 

Even if this legislation does not come to pass, however, bitcoin is planning an upgrade named Taproot that will make all public keys visible on the blockchain. Investors alarmed at this development will find Monero to be a credible alternative. .

Cardano (ADA). Like Ethereum, Cardano offers a public blockchain platform that can host smart contracts and dApps. Unlike Ethereum, it does not wrestle with scalability concerns (as it employs proof of stake). 

Moreover, the Cardano management team has a reputation for delivering on its promises. Serious investors also recognize that the management team is highly talented and able to fill a market need. 

Cardano is heavy on security and interoperability. For instance, the platform offers “special extensions which allow for adding more signature schemes through a soft fork.” (source). Consequently, they can add another security layer without disrupting the network.  

Although the Cardano team is intent on making their platform quantum-resistant, previous attempts to do so have not panned out (including adding such signature schemes BLISS and BLISS B). Nonetheless, achieving this goal remains a top priority for them. 

Algorand (ALGO). While not yet quantum-resistant, Algorand is another coin that can be modified to meet this challenge.  

The cryptocurrency’s founder (Silvio Micali) invented what is known as a verifiable random function (VRF) to prevent any user from gaining a staking advantage by creating multiple accounts.

By using VRF, Algorand supposedly is able to ensure speed, security, and decentralization simultaneously (thus solving the blockchain trilemma).  Moreover, VRF provides the coin with an immense ability to scale.

At present, several white papers have been written detailing how the coin’s VRF could be modified to make Algorand quantum-resistant (hint: by incorporating an XMSS Signature Scheme).

Algorand is a lock for value investors, particularly those concerned with scalability (to meet mass adoption needs) and the potential for quantum resistance.

Quantum Resistant Ledger (QRL). Given the rapidly-evolving race to create a practical quantum computer, investors would be wise to hedge their investments in a quantum-safe cryptocurrency. 

QRL achieves this by using the quantum-resistant, hash-based signature scheme named XMSS. Moreover, QRL can also update this signature scheme without compromising its security.  

  • Not incidentally, It should be noted that the QRL team is also createinga quantum safe for crypto assets named EnQlave.  It will be released after a security audit which everything has to pass before release by the qrl tram. EnQlave enables Ethereum users to protect their Ethereum and ERC20 balances from the risk of a quantum computer attack, using Smart Contracts on mainnet Ethereum.

Investors concerned about bitcoin’s ability to withstand a quantum computing attack should consider QRL. Such an attack is destined to occur far sooner than most people expect (since most technological advances tend to trend exponentially- not linearly). 

Expect the QRL token to serve as the ultimate safe haven when rumors about public key cryptography being broken begin to surface.  

Concluding Remarks

The successful value investor seeks out value first, then takes into account the risks and rewards involved. Patience is just as critical, since value investing requires retaining a long-term perspective.

Although value investors typically focus on a cryptocurrency’s utility, they’re gradually taking into account privacy concerns and quantum-resistance as well.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.

Posted In: Partner ContentQuantum Resistant LedgerCryptocurrencyMarkets

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