Crypto Diversity

Full Disclosure (aka What is KemoNine up to?)

Preface

NomRocket recently published a post about diversification and how you can’t lose in crypto recently. I’d recommend taking a second to read it here (link).

Good, now that the read is out of the way…

Nom isn’t wrong

NomRocket makes a pretty solid point: holding coins throughout the top 15 (and 30) is a great way to ensure you don’t lose your ass with dips in the market. The market is still young, and people are running around with great FOMO. This token, that token, this tech, that tech dominates the news anymore. It’s as if people are running around like decapitated chickens and not sure what they should be doing.

Yes, it’s annoying. If you’re even minimally invested: do you lose out? The overall market has grown by leaps and bounds and consistently sets ‘new records’. The market isn’t setting records as much as it’s maturing and attracting traditional investors.

Diversity

Because of this growth and attraction, the top 15 (30 really) coins are all doing well. As a whole you can’t lose if you’re diverse in your holdings. I hold 15 coins at present. Yes: 15! Once I started diversifying my holdings I have seen consistent, positive gains. Sure, some coins have oscillated up and down but I’m ahead.

Of those 14, 9 are top 30 coins. I’m slowly building piles of coins in the top 30. I finally have enough vested in crypto that I can start to diversify my holdings. The more diverse my holdings become, the better my portfolio performs. On top of that I’m insulated against a single coin failing in an epic manner.

What to pick?

I measure coins based on merit mainly. However, I’m also disgruntled enough to hold coins that I don’t like. I rarely stand on principle when it comes to NOT holding a coin in the top 30.

Changing the Game

Seriously: even if you “don’t see it”, others may. BTC is a perfect example: it took years to build up from “what is this goofy tech thingy” to “oh crap! invest! now!”. There are top 30 coins that are head scratchers but many people see the value.

Remember the iPhone launch? People thought Apple was going to fail in the most epic of fashions. Years later and it’s still seen as a game changer. The top 30 coins are exactly that: game changers.

Seriously, what do I pick?

Pick whichever coins “make sense”. I’m not going to advocate for an individual coin in this post. I’ll tell you what I’m holding (later). I just ask you keep in mind these are my PERSONAL picks. What you see as having value [or not] is your opinion. Trust your gut if you’re going for the top 15 or top 30.

Evaluation

When evaluating coins in the top 30: look at the market cap, trading volumes, the overall history at a minimum. I’d also strongly recommend poking around the website, reading the white paper (if there is one), social media and wallet software. Get a feel for what the coin is all about start to finish. One thing to note: whitepapers are a new phenomenon. Older coins won’t have one. They’ll just have a solid description of the coin and its purpose.

I regularly poke around websites, read white papers and play with wallets before investing in coins. Based on this feedback loop I make a decision: invest or walk or keep an eye on it. The first two are pretty obvious. In the third case I usually buy a small amount of the coin and stash it in a cold wallet. By stashing a small amount of coin in a cold wallet, it lands on my tracking spreadsheet and I loop back for more evaluation about once a month. If it starts looking better, I’ll start buying a bigger stake. If it starts looking bad, I’ll cash out via Changelly or an Exchange.

What I look for

When I evaluate coins, I look for the following information and weigh the coin based on these primary metrics. These are not in any particular order, just things I look for in a coin. I ask you weigh these according to your personal needs/desires.

Reasonably polished website
It doesn’t have to be super professional, just well built and maintained. Preferably a with news section, community section and FAQ that are up to date. Negative points if it’s all marketing fluff and I can’t find useful information quickly. Extra bonus points for a roadmap that’s easy to find.
Multiple forms of community management
Do they have social media presence? Do they have a forum? Do they have discord/slack/IRC/other? How do I get in touch with them as a community member? Are they jerks based on their posting habits?
Solid description of the coin and what problem(s) they are solving
I want to know what problem this coin solves, if any. How does the coin solve the problem? Is this a platform? Is this an API layer? Do you have a good set of technical docs? Do you have a white paper? Bonus points if you have a white paper and you have a solid technical description beyond just a white paper.
Wallet
How do I use this coin in practice? Do I need the full block chain for your wallet? Does the UI for the wallet make sense? Are all the features you put forth on the website/white paper present? How do I backup/restore my wallet? Does my Ledger Nano S support the coin for cold storage? Is there a paper wallet?
How to buy/sell
Is there Changelly support for buys/sells? Is this coin traded on any of the exchanges I use? If I can’t buy/sell, why am I investing? I should have a good reason if it’s hard to obtain or sell.
Usage
Will I use this coin for something? If I can see myself using this coin, even more bonus points. I have specific needs in getting paid for content, work, etc. and if this coin facilitates I’m going to be a lot more interested suddenly.
Viability
Over time how has the coin performed? Does it surge and fall consistently? Does it look like it’s been manipulated in the last 12-18 months? Is there only a small number of stake holders that could manipulate the market? Is there a reasonable market cap and trade volume?

What I will NOT hold

I alluded to there being coins I will NOT hold. So far, the only coin to make this list is BTC. Yeah, BTC. I will NOT hold BTC at this point. Sure, it’s the gold standard of the market right now but I have MAJOR issues with the community. There is far too much crap being flung by all sides for me to be comfortable. The transaction fees are also far too high for it to be useful to me. I need larger transaction sizes to beat the fees and I’m not there yet.

Maybe in time I’ll change my opinion but for now I will NOT hold BTC.

Having said that: I have a very strong opinion and it’s not held widely. I still recommend people invest in BTC if they are comfortable with what they know. Don’t let me stop you from making good money on BTC while it’s doing well. I’m willing to walk away from very good returns due to my opinion.

What I hold

OK, time to let you know what I hold. Simple lists this time. I’m not going to explain the how/why of my holdings. I leave you to figure out why I may be holding these coins and to judge them for yourself. You’re welcome to follow my lead but some of these holdings are based on my personal opinion(s).

One very important thing to keep in mind: I mine XMR+XDN (merge mining) and ZEC on many different machines.

Top 30 coins

  • ETH
  • XEM
  • ZEC
  • XMR
  • ARDR
  • XRP
  • EOS
  • LTC
  • BCH

Others

  • NXT
  • SC
  • LBRY
  • XDN
  • MUSIC
  • JLRDA

Keep in mind…

This IS an opinion piece

Ever see people play the stock market? It’s like blind squirrels in search of a single nut. Everyone runs around talking about this, that and the other thing while simultaneously trying to sell you on their opinion. Opinions are assholes: everyone has one and none are wrong. They are all correct and smelly within a given frame of reference.

Yes, this is an opinion piece and I’m definitely selling you on the idea of diversity.

Is that a bad thing? I’m not selling you on specific currencies, I’m selling you on top performers that have consistently risen above the pack and have stability over time.

Think about diversity, it’s a really good way to ensure your portfolio does well over time. It’s Investing 101 anymore.