Riding the 2021 Crypto Bull run
I am continually asked which Alt Coins should I invest in
Here is my response for 2021
I am still mostly Hodling bitcoin. My main strategy is to HODL more bitcoin. I see alt coins as annuals or at best perinials with Bitcoin the mother tree.
During the bull run that happens every 4 years I slowly move some of my HODL btc to Alts.
I am usually mostly in microcap Alts. These take a lot of tech expertise and active management but give incredible returns, as a technologist and investor in startups I feel safe here.
This year however I am slowly changing my strategy as I fall down the Polkadot rabbit hole.
I normally avoid anything in the top 20 by market cap excexcept bitcoin because their market Cap is huge and only Eth has had any real upside.
I expect Litecoin, bitcoin cash, XRP, XLM to be flushed out this bull run. These projects have failed to create a dev community or do anything exciting around them. They will no doubt still do well in USD terms (everything does in a bull run) but will be outperformed by some of the new projects.
So what changed firstly I got to the point where I was so pissed of with paying ridiculous gas fees that I stopped wanting to even invest in small cap ERC 20 gems.
Then I started to look at who was solving this problem how and why. I slowly began to fall down the Polkadot rabbit hole. Similarly to how I fell down the bitcoin rabbit hole. Where every day I have a new realisation a new understanding of the full debth and scope of this project.
Polkadot is my absolute favorite for this bull run and we are slowly selling all our ERC20 tokens and either buying DOTs or buying the microcap Alts in the Dot Ecosystem. Half of our trading account is in Dot and the rest of our portfolio is slowly moving to Dot Projects.
Dot was created by Gavin Wood. He is a cofounder of Etherium and the creator of Solidity the language that developers build Dapps on in Etheium.
Dot however is an absolute revolution and as a software developer it is a thing of beauty. As someone who has spent his life exploring how people can organise themselves to unlock their true creative lives by collaborating deeply and being economically rewards for it Polkadot makes my heart sing. I am wanting to support her in every way possible as such I am heavily invested in her and I am looking to become even more involved writing code, creating videos and generally sharing what I am seeing and why it is so important for Humanity.
Dots purpose is often lost in the terminology of how she is doing this instead of what she is doing as I understand it Dots purpose is to 'Create an ecosystem where people can run rapid experiments exploring entirely new ways to organise human creativity through collaborative tokenomics, on chain governance and synchronised communication.'
Basically Polkadot is creating an entirely new way for people to participate in an Ecosystem where all the participants are fairly rewarded according to their contribution.
The Ecosystem is designed be a hub of innovation to achieve this in true crypto world the solution is in the interesting mix between ground breaking technology and innovative tokenomics that are tweaked to continually reward those participants who contribute most to the Ecosystem.
Technically Polladot is building a framework for people to create interoperable highly specialised blockchains. Most independent blockchains fail because despite their technological breakthroughs because as seperate Islands they fail to attract a critical mass of users and they don’t interoperate with existing blockchains.
With Polkadot you have an Ecosystem where you can develope parachains, blockchain specialised for a particular purpose that interoperates with all other blockchains, all users in Polkadot etc.
As an example some parachains provide Distributed application programming framework (Dapps are what make Etheium great), Moonbeam for instance is totally compatible with Etherium so that Etherium applications like Defi that are unable to perform due to crazy gas fees resulting from Etheium one general purpose blockchain model can quickly migrate (they can migrate accounts, code and user interfaces). The major Etherium Dex’s like SushiSwap are already porting to Dot.
And then there are highly specialised Blockchains like Acala which are specialised around Defi, as such the blockchain (parachain) performance and programming language is specialised for financial transactions vs the more generalised Solidity of Eth. This capability addresses the issues we have experienced with Etherium Defi (ridiculous gas fees, smart contract hacks, inability to upgrade and change and fix the smart contract without hard forking the coin, which is costly, confusing and time consuming for the entire team).
For tokenomics and organising people around the goal of unleashing the pent up creativity of humanity.
Polkadot has developed on chain governance where a totally decentralised voting system is used to how determine changes to Dot and Dot code are rolled out.
This on chain governance avoids the bazzaar of bitcoin where no decisions can ever be made and the Cabal of Etherium where the Etherium foundation tries as best as it can to include discussions from the entire community but eventually they make the decision resulting in disenfranchised groups and very long decision making times.
With on chain governance a set of codified executable rules are recorded on the Block Chain. Including the rules of how to change the governance rules.
On a code level this governance token allows Dot to rapidly roll out enhancements. The rapid rolling out of enhancements is unique in all blockchain history. Normally because the code is the law it is very hard to get the entire community to upgrade to the new version at the right time, a new coin has to be created each time you do a major upgrade, all validators/miners have to upgrade all exchanges have to upgrade new coins must be issued fairly etc etc. You can see with Eth 2.0’s multi year rollout and 2 years of planning how complex this process is on the legacy blockchains.
With Dot not only does it become easier to upgrade Dot rapidly but because this mechanism is available in the meta level any projects on Dot can to use the same mechanism with whatever nuances they want.
The on chain governance along with forkless uogrades provides all of this.
On financial level there is a way to continually fund the treasury. The treasury is controlled by the same on chain governance and is dedicated to funding exciting projects in the Dot Ecosystem. The result is they DOT behaves a bit like a VC seed funder controlled by the Dot community.
On a technical level how has Dot achieved this Dot is technology that allows all seperate Blockchains built on Dot to interact. There is even a blockchain project Chain X which is specialising in bringing legacy blockchains like Etherium and BTC into the Polkadot Ecosystem so that Etheium and all its thousands of tokens can interoperate in Dot. Their are a number of projects dedicated to making our precious bitcoin even more valuable as bitcoin can safely enter the Defi world as a full first citizen. This allows bitcoin which has up until now largelly been excluded from this to fully participate.
So my strategy is to keep stacking more DOTs and more KSM’s by selling my ERC20 coins and then slowly moving these funds to Dot.
I am extremely grateful to all here coins that I have accumulated this year and it is with Sadness that I am selling some of my beloved coins.
I have to follow my heart and my heart wants to commit itself to Dot. I think many many others will react the same way as they start to familiarise themselves with the most underhyped project of the Decade.
I am betting the 2021 bull run on this.