Ask Coindirect CPO Stephen Young Anything About Cryptocurrencies

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Stephen Young

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#61
Like so many other average South Africans, I am a newbie in this field; how do I choose a cryptocurrency and how do I know if that cryptocurrency is a good fit for me?
There's a well used phrase in the cryptocurrency industry: DYOR. It stands for: Do Your Own Research. This is absolutely imperative. There are too many stories of people who blindly listened to advice from their friends of some random person is a Telegram group.

#DYOR.
 

Stephen Young

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#62
Hello


Hello!what is real or fake when coming to cryptocurrency and how can one learn and make money trusted way because there are lots of people and companies claiming to know more about cryptocurrency?
#DYOR is key in this space. Do Your Own Research. Figure out what you like and understand and then consider those projects as potential investments. Definitely don't listen to some random person on a Whatsapp group or your best bud. Always #DYOR.
 

Stephen Young

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#63
Dear Stepen,
How do you decide whether a cryptocurrency or token is worth purchasing or investing into?
The best thing to do is #DYOR. Always Do Your Own Research.

Figure out what you are comfortable spending (and potentially losing) then find teams you like, projects you back and understand, #DYOR and then decide if you're happy to invest.
 

Stephen Young

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#64
In South Africa crypto currency is relatively still new, how long do you think it will take before crypto currency will become an accepted form of payment at store not just online stores?
South Africa is not ahead or behind in the cryptocurrency revolution.

Everyone across the world has access to the technology and many people from many places are working together to take things forward. There are places where cryptocurrency is accepted as a form of payment; The Alexander Bar in Cape Town is one such example. There are others dotted through South Africa and the world.

No one can really say how long it will take to become a widely accepted form of payment but in my opinion we need to see the crypto market grow to a significantly larger size (1 Trillion USD or more) before using cryptocurrency as a payment mechanism becomes practical. With the current size of the crypto market "whales" (High net worth individuals) have the ability to move the entire market.

Until we see more stability the complexity and risk for retailers to accept cryptocurrencies is still too high. On top of this we need to see major improvements in the user experience of buying, storing and spending cryptocurrencies for every day users.
 

Stephen Young

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#65
Are you a Bitcoin fundamentalist or do you believe there is a future for alts, if so which ones and why?
I see Ethereum has been taking a lot of flack recently and EOS can't seem to get it's act together... especially with decent projects like Cardano, NEO on the horizon.
In general I don't think it's wise to think we can predict the future with a high degree of accuracy.

Having said that this is my view on the BTC vs alts question. I like to think of use cases first and projects second.

So in the case of BTC the use case is for it to become a globally accepted sound money (the 3 main use cases for money is as a store of value, a means of exchange and unit of account). I think there is a decent chance a cryptocurrency will achieve this status in the future and I believe that BTC is currently the currency most likely to achieve this goal. What interesting about the "money" use case is that one of the characteristics of money is that there is a "money premium".

This is best illustrated by looking at gold. Gold has some industrial uses (mainly in electronics) and some demand from the jewellery industry but the demand doesn't justify the current gold price. The gap between the price we pay for gold and the price that could be sustained by industrial demand is the money premium. We are willing to pay more for gold because we believe other people also find it valuable as a store of wealth. This money premium combined with the limited supply of many cryptocurrencies makes the potential future value of a cryptocurrency that becomes a globally accepted store of wealth extremely large. On the other hand most alts aren't trying to be "money".

If we take a project like Storj as an example. Storj is attempting to incentivise a network for cloud data storage. In this case there is no money premium, instead there is a global market for data storage and centralised incumbents that currently serve that market. Valuing a token like Storj is thus very different from valuing a money token, you need to look at the total addressable market, factor in token supply, competition from incumbents, the current cost per GB of storage and the expected market penetration for Storj. All of these factors combined give you a sense of the potential future market cap of Storj. Most likely the market cap for a storage coin will be significantly lower than the market cap of a money.

tldr; I am not a BTC maximalist in the pure sense. Instead I think the biggest upside is probably in the "money" tokens and BTC currently has by far the strongest position in that space. Alt coins also have a future but it will be a mistake to imagine most of them will have a market cap anywhere close to the winning "money" crypto currency.
 

Stephen Young

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#66
Do you see DAI and similar market making projects as having a significant impact on the volatility of crypto currencies?

Where do you see the most potential for blockchain applications other than crypto currencies? What are some of the potential applications of the technology you believe hcould have a mainstream impact in the short term?
At this stage I think we are still in the infrastructure building phase of crypto so projects that build out the decentralised infrastructure that will be needed to build global scale dApps are interesting. Things like identity, storage, smart contracts, computer grids, privacy etc.

The other thing cryptocurrencies allow us to do is to see money as a design problem. I think we will see some interesting new ways to incentivise and grow communities over the next few years. Some projects that spring to mind in this space are Numerai and FCoin. I think we still have a long way to go in figuring out what that looks like.
 

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#67
Hi Stephen what are you thoughts on crypto currency mining; both in being a miner or joining a mining company please?
Mining has become big business and there is significant advantages to economies of scale. This is one of the reasons we are seeing so much miner centralisation. If you want to take mining seriously you would need some serious network administration and data centre management skills. You also need access to very cheap electricity as the cost of power is the biggest expense for miners.
 

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#68
Do you have any insights on mining crypto? If so, is there still a market for people wanting to invest in hardware vs buying actual coins?
Mining is big business right now. There are a lot of players in the market globally and it's becoming increasingly difficult and capital intensive to make real returns. If you are a retail investor and casually interested in cryptocurrency then it's significantly easier to simply buy the coin you are interested in.

If you are dead set on mining then you need to consider things like: network administration skills, data centre management and scaling and you will also need seriously cheap electricity to scale your operations to the point of profitability.
 

Stephen Young

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#69
I feel that crypto currency is a bit too complicated for the average guy on the street to understand.... is there any way one could explain it in easier terms?
This is absolutely the biggest problem right now - we need a better customer experience across the board. The industry is lacking great user interface design and simple methods to put fiat currency into crypto and get it back out. Coindirect.com is absolutely solving this problem and leading the industry right now.
 

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#70
In emerging markets, which industries will be most disrupted by the implementation of cryptos and how can the leaders in those industries take advantage of the disruption?
Blockchain technology is disrupting industries that extend far beyond just the emerging markets. Over the next 20 - 50 years we will see massive shifts in industries like banking, law, regulation, property and many, many others.

It's tough to say exactly what the global reach of the technology will be but it will be significant for certain.
 

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#71
A lot has been said about cryptocurrencies enabling terrorism and illegal activities. Is there a way it can be used to curb corruption?
Blockchain technology can definitely be used to create an immutable level of transparency when it comes to corruption on any level.

However, there is a lot to be done to get the technology to the place where it's used in systems that can really make a difference. For example, placing votes on a blockchain doesn't automatically make it a corruption-free election.

Many processes would need to be altered or replaced to ensure that elections become more free and fair. Blockchain doesn't magically change things.

If you are keen to dig into your first cryptocurrency purchases and see the blockchain at work, take a look at what we're doing at www.coindirect.com.
 

Stephen Young

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#72
Traditional investments urge us to take the long route. Invest for 5 years, 10 years, 25 years. etc. Is this a wise route to take with regards to investing in Crypto, or should we keep it as a short-term & higher risk profile?

If you believe in the product, the team and the platform being built then you can definitely choose to buy and hodl the company token or coin. The key thing is to Do Your Own Research (DYOR) and ensure that you are comfortable with what you find, your decision is well informed and you can afford to lose what you invest. Never, ever invest more than you can financially afford to lose.
 

Stephen Young

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#73
Do you agree/disagree that Bitcoin will survive due to its "Byzantine general fault tolerance" (proof of work) over other crypo blockchains? Explain?
Byzantine fault tolerance and proof of work are not the same thing. Proof of work is the mechanism by which Bitcoin achieves byzantine fault tolerance. Before Bitcoin came along there where other ways to achieve practical byzantine fault tolerance but they either didn't scale or required some form of trust or special nodes in the network. There are also other candidates for consensus algorithms that do not use proof of work.

The Cordana Ouroboros Proof of Stake algorithm for example has been mathematically proven to be secure. I think other factors in the Bitcoin ecosystem are just as important as the consensus algorithm. The quality of the implementations, team and development process, the size of the community, resistance to censorship, fiat to bitcoin onramps, regulatory approval etc all play a factor.
 

Stephen Young

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#74
Why does Coindirect have no stop-loss orders? Surely a wider range of trading tools attracts more traders = more liquidity? Sometimes it feels like there's two kinds of exhanges:

●Those that act like a market for buying some digital asset and the buyer needs to take it off-exchange right away to keep in private wallets.
●Those that act like a trading exchange where assets are often kept on-exchange for trading.

Which kind are you aiming to be?
Stop loss orders are definitely on the radar at Coindirect.com. Our exchange offering is highly targeted at professional traders. We have a full API to support trading bots, multiple fiat pairs to make it easier to buy crypto using ZAR.

Over time we will be adding more and more technical indicators and support for automated trading strategies etc. Please DM me with any suggestions/requests you have along these lines. We would love to speak to as many professional traders as possible so we can build the exchange that they want.
 

Stephen Young

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#75
As a novice I bought, thought I could get a "card" to do purchases. Apparently not so. I wanted to sell, was told I need to get a buyer, a washing machine was used as an ex, you buy one, can only sell it if you get a buyer. Unfortunately was under the impression it is like "shares" you buy and sell, trade.. Don't know how to get buyers, as the person who introduced me into buying, is no longer interest to assist me to sell.
Join Coindirect.com and if the coin you are holding is one that we support, you can find buyers!
 

Stephen Young

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#79
After buying a cryptocurrency, is it best to store it on our computer or keep it with a broker third party please?
It actually, depends on your trading strategy. If you need quick access to take advantage of market movements you might want to keep some funds on an exchange like ours at Coindirect.com. If you are buying and holding for the long term you should consider a paper wallet or cold storage. If you do decide to use cold storage or paper wallets you really need to make sure you have good security procedures in place. Loosing a private key or getting one stolen means you loose access to all your funds. Treat your paper wallet or hardware wallet the same you would treat a gold bar.
 

Stephen Young

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#80
Given the established history of other markets and the reasonable certainty over what is bought and sold (If you buy current futures contracts or stocks, you know what you're buying) and the relative volatility of the cryptocurrency market in general, do you think we'll get to the point where it makes sense to have Crypto derivatives and margin trading?
Futures, derivatives and margin trading are important parts of financial markets. In the long term I think they will be important for crypto markets too. I also think we will see new kinds of instruments develop in crypto that haven't been possible in traditional markets. Exchanges like ours at Coindirect.com provide enough tools for experienced and entry-level traders to trade and view the volatility.

Token curated registries give a hint of the innovation that is heading our way.
 
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