The bigger picture – a guide to alt coins

Tracey: [00:00:19] Welcome to the crypto curious podcast designed to help you navigate the dynamic world of cryptocurrency. Hello, my name is Tracey, and as always, I'm joined by my pals, Blake and Craig. [00:00:32][13.1]

Blake: [00:00:33] Hey, Tracey. Great to be here. [00:00:34][1.2]

Craig: [00:00:34] Hey Trace, happy to be here. [00:00:36][1.1]

Tracey: [00:00:36] Hey, guys. So we've taken you through the big two Bitcoin and Ethereum, and now would be a good time to take you through the altcoins or alternative coins. And we're also going to talk a little bit about portfolio mix. Now's also a good opportunity for us to remind you that this is not financial advice. We're here to help educate you. So if you do have any questions or suggestions, then we find that chatting to a financial advisor is the best way to go. [00:01:04][27.7]

Craig: [00:01:05] If this is your first time tuning in to Crypto Curious, and you're not sure about bitcoin or Ethereum or the basics. Go back and listen to our feed from the beginning. [00:01:13][8.7]

Tracey: [00:01:14] Yes, good idea, Craig. So altcoins, these come in all shapes and sizes. Today, we give you the lowdown on the altcoins, the blue chips we've talked about in our past two episodes Bitcoin and Ethereum. So as Craig said, go back in our feed and hear more about those top two crypto currencies. To begin, Blake. Can you explain to us why there are so many different types of coins? [00:01:37][23.1]

Blake: [00:01:38] Yeah, that's right. Tracey, everyone has their own version of paradise and their own beliefs of how blockchains should be designed and should be built. And in that sense, that's why there's so many different projects and different blockchains in the same way that people like fast cars or safe cars or all terrain vehicles. There's a blockchain for every purpose. There's some that doing fast payments. There's others that have like a Swiss Army knife functionality. Others with privacy features and those that are extremely safe. And all of these have their own speciality or use case. And there's a really funny example when Brian Armstrong, who's the CEO of Coinbase, once did a Twitter post in 2013, and he said, basically, every coin that you're going to see within the top 10 is just going to be a different version of Bitcoin. And now, you know, almost 11 years on. That's the case. They're all trying to make their own versions of bitcoin. [00:02:38][60.0]

Craig: [00:02:39] The crypto market at time of recording this could change is approximately 60 percent of bitcoin and Ethereum, so all of the love is being taken up by the big two. So from our previous episodes, we know bitcoin is a store of value and for payments, we know Ethereum is a general purpose blockchain to build DApps on. And there are countless other ones with their own purpose. Now, for example, number three at the time of recording is Binance Coin. Now, Binance is an exchange that utilises their token to promote actions on their platform. [00:03:12][33.4]

Tracey: [00:03:13] So if we look at the leaderboard, we have Bitcoin and Ethereum sitting in the top two. But if you're listening to this in the distant future? Firstly, hello. Secondly, you can check out how much this listing has changed, and the best place to go is a place called CoinGecko, which gives you a list of all crypto currencies and their details. This is actually a really handy little app that you can get on your phone as really easy to check out all the new coins and keep up to date on the day with their price action. And there's some really cool features and things that you can do on there, like adding your own profile or portfolio and do some exploring. So what is in the top 10 right now? It's made up of blockchain tokens, main coins, stablecoins, ecosystem tokens. These are all categories of their functionality. Blake, can you expand a little? [00:04:02][49.3]

Blake: [00:04:03] Yeah, for sure. So that's one way that we can categorise them the different coins, which is basically your ways in which they work, or the purpose in which they're meant to be used, and a few in the top 10 protocols or their own blockchains. For example, Cardano, Polkadot and Solana. And they all function in a similar way to Ethereum. Whereas Tether is actually built on top of the theory, and Tether is something that we call a stablecoin. [00:04:32][28.9]

Tracey: [00:04:33] And Blake, do you want to explain exactly what a stablecoin is? [00:04:35][2.4]

Blake: [00:04:35] Yeah, sure. So a stablecoin is a digital representation of one US dollar. And the reason that these stablecoins were built was because it can take days or weeks to transfer US dollars around the world. But using blockchain technology, it can take minutes and cost just sense. And the way that a stablecoin works is for everyone tether that is in existence, everyone. Crypto token. There's $1 in the bank that represents it and the company Tether. They manage this and maintain it, and they are supposed to be backed one for one to one digital token for one dollar in the bank. But there may be some controversy if this is the actual case. Now there are many. Companies doing the stablecoins, and it's a really great tool to enable people to transfer value around the internet. [00:05:27][51.6]

Tracey: [00:05:28] I think the stablecoins are really important and it's a lot to kind of unpack in in that sentence or that statement there. So I think at some point we will cover off a lot more about stablecoins because they're a really important aspect to this whole ecosystem, and it's probably something that we need to discuss a little bit further. Looking back at what else is on that top 10 leaderboard, we've got your meme coins, Craig. Do you want to tell us a little bit more about your favourite meme coin that we speak about sometimes? [00:05:53][25.1]

Craig: [00:05:54] Yeah. Well, it's everyone's favourite meme coin Dogecoin, which is consistently now in the top 10, which is a bit crazy. It was actually started off as a joke from an Aussie guy, which is, you know, proud of us. Aussies were in the top 10, which is pretty cool. It's iconic in the crypto community because it is a joke. [00:06:13][19.3]

Tracey: [00:06:14] But but is it even a joke now? [00:06:16][1.8]

Craig: [00:06:17] They call it the people's coin. Elon Musk is actually putting a literal dogecoin on the Moon in his new Space X mission now. That's pretty cool. [00:06:26][9.0]

Blake: [00:06:27] And Dogecoin is the coin that's classically known with with a dog's head on it, and the project's now worth about, I think, 35 billion US dollars. So it's pretty ridiculous how much traction that project's got madness. [00:06:42][14.8]

Tracey: [00:06:43] And I mean, look, I guess one thing it has brought a lot of eyes into the space. I guess a lot of people do know about crypto because of Dogecoin. My kids certainly know a bit more about crypto because of Dogecoin is part of the roadblocks games like it's it's madness. But going back up again and having another look at that leaderboard and what else round out the top 10, we talked about payment tokens or ecosystem tokens. Anyone else want to touch on XP? [00:07:07][23.8]

Craig: [00:07:08] I mean, Blake touched on before Tether being a little bit controversial and you know, there is a few controversial ones in the top 10 like, as you mentioned, DOGE and XRP. So XRP's actually in the middle of a lawsuit at the moment, still maintaining its top 10 status at the time of recording. So Ripple, which is XRP, is focussed on being the transfer settlement between banks. Now it's a really cool idea. I'd like you to touch on what XRP actually is. [00:07:37][29.3]

Blake: [00:07:37] So they basically want banks to interchange or settle payments between them using the Ripple network, which is a lot faster than going through traditional methods like Swift. And their argument is that they could do it a lot quicker and look cheaper. But the take from large banks globally has been very shallow. But there are those people that have chowder and there are others that are using it. But still, it's a value proposition. I think the verdict still out on that one. [00:08:06][28.2]

Tracey: [00:08:06] So with that one, it really does polarise people. There are really big like there's a big XP fans out there and then you've got the likes of Ashton Kutcher and those guys who are big XRP fans and then those who are against it are saying that it's just like the banks. Why they why do they it that way be like, how can we explain that? [00:08:25][19.6]

Blake: [00:08:26] Yeah, because it's not that decentralised. Ripple has a CEO, whereas there's no CEO of bitcoin. You know, it's fully decentralised. So in that sense, it is a different proposition. And kind of I think we touched on, you know, some of those core guiding principles of blockchain technology earlier in some of the first episodes. And you know, decentralisation is one of those key pillars. And if you don't have a decentralised network, then you know it's susceptible to, you know, corruption or all sorts of things. So yeah, that's that's one of the other points that, you know, some people tend to steer away from it. [00:09:02][35.8]

Tracey: [00:09:02] So even though, broadly speaking, crypto is still seen as a more risky investment, there are varying degrees of risk and reward when it comes to where you choose to invest in. With this in mind, bitcoin would be lower risk and lower reward, which sounds weird to say lower reward, considering that there's still potential to gain, you know, 100 percent gains in the next 12 months and beyond. But there are other groups of coins which offer much higher gains for much higher risk. [00:09:30][28.0]

Blake: [00:09:31] Yeah, that's right, Tracy. These coins do offer different risk profiles depending on how far down the leaderboard you go. Polkadot, Solana and Cardano, which are all very highly ranked, still sit in the medium risk category, and they're generally referred to as blue chips and all of these smart contract platforms, which are similar to a. But with your varying value propositions and they all have varying qualities, Cardano takes an academic approach to their research and development, which is really interesting. Whereas Solana is focussed on being super fast for applications like gaming, and Polkadot is another popular protocol which focuses on connecting all of these blockchains together [00:10:18][46.5]

Craig: [00:10:18] the words blockchain protocols. Forms Laotians are all synonymous as in they all mean the same thing. And these platforms like Blake, mention support things like lending, borrowing, NFT, virtual world trading or with the use of smart contracts, and it's all happening across that platform. But as all this is happening across the platforms, you've mentioned which one will emerge as the winner. Or could there be a few Blake? [00:10:42][23.5]

Blake: [00:10:43] Yeah, it's interesting that you say that and this has been a lot of debate around this in the sector and everyone's trying to pick a winner. There's a great analogy that I heard from a guy from an investment fund called Dragonfly Capital, and he said that, you know, Ethereum is very much like New York City, and that's where the finance happens. It's really expensive. It's very busy. And often there's gridlock and there's other people building other cities with different qualities to, you know, counteract this. For example, you know, Cardano is very much like a research and a uni town, and they're expensive minting with new methods of your driving research and development. And then there's other cities like Solana that are fast and, you know, they got high speed transport. So you can do particular things there that you can't do in New York. And the ecosystem is going to develop in a myriad of different ways. And as I said earlier, you know, everyone has their own version of utopia and people are, you know, subscribing to those dreams and building towards them. [00:11:45][62.5]

Tracey: [00:11:46] That's cool. I really like that. That's a good that's a good way of looking at it. Another group here in the medium risk would also be exchange tokens, and we mentioned BNB earlier, which was the Binance token. Blake, do you want to give us a few of the others and maybe explain a bit more about the the exchange tokens? [00:12:02][16.6]

Blake: [00:12:03] So Binance, which is a massive exchange X and Q coin, which are also very large cryptocurrency exchanges, have like their own native cryptocurrency, and it's used to reward their customers for behaviours and kind of functions like frequent flyer points where people get rewarded for doing particular things that they might get discounts on or doing certain actions. [00:12:25][22.6]

Craig: [00:12:26] The idea of rewards tokens is being used in traditional finance for years, like flybys, bullies points, Qantas points, but the difference now is you can sell them for cash. So it's actually a tangible reward. [00:12:39][12.5]

Tracey: [00:12:40] Yes, I'm actually a user of the exchange and I know that when I'm trading, if I'm holding the token in my trading account and I get discount on my face to trading. So that's similar to what we're doing with our band token for bamboo. Is that right? [00:12:54][14.4]

Blake: [00:12:56] It's very much just a rewards token to incentivise behaviour on the platform. [00:13:00][4.3]

Tracey: [00:13:01] So we've spoken about the medium risk blue chip options. Now let's talk about the high risk, high reward coins. Craig, do you want to take over here? [00:13:09][8.6]

Craig: [00:13:10] Yeah, I mean, the super speculative staff are the ones that are like DOGE, Shiba, really cheap on paper and people think, Wow, this ever hits a dollar. I'll be a millionaire when you know, that's probably never going to happen. This is a trap that many new investors fall in, including myself. When I first started, I got caught up in the bright lights I bought verJ, which is X Viji for less than one cent and thought This is way better than bitcoin. You know, bitcoin's old and the boom a coin. No one wants that. Now, looking back on her, if I just held bitcoin, I would be much better off than what I was now. So these highly speculative coins, I would say to you, Tracey, that you should do your own research and, you know, be very cautious with where you put your money because if you want to gamble, you might as well go to the crown. OK. [00:13:57][47.2]

Tracey: [00:13:58] Love, love me. Some crowd action. OK, do my own research. Don't listen to Craig. Don't go to crown in a moment. Let's talk about market cap and crypto, and then we'll talk you through our research tips for when you're considering a new project. Let's talk about why some coins are worth thousands of dollars and some are only worth a few dollars or even a few cents. [00:14:18][20.2]

Blake: [00:14:19] Yeah, can be a bit of a minefield trying to navigate, you know, some coins are worth $85000 and other other ones are worth zero point zero zero one of a cent. And there's an easy way to help people navigate this, and it's by looking at the market cap. Now, the market cap is a piece of jargon that basically is made up of the price of all the coins in circulation. So, for example, if I have 10 coins worth $1, the market cap would be worth $10. And some projects you confuse investors by putting a very, very small price on their coins and making billions and billions of coins. Which makes it look like a good deal, but you know, it may not necessarily actually be one. [00:15:07][48.3]

Craig: [00:15:08] This is where this is. Why DOGE is 20 cents in bitcoin is between 50 and 100k, because DOGE has $115 billion in supply, whereas bitcoin has 21 million. And when? People ask me, you, can doge overtake bitcoin. Well, if that happened is market cap would be the GDP of the whole world like times 100. So it's I just can't happen. So this really does confuse new investors. And I think coin rankings on CoinGecko are calculated by a market cap and market cap is is supply times price. [00:15:38][30.2]

Blake: [00:15:39] It's simple to work out. You basically just grab the number of coins in circulation and times it by the price of each coin. [00:15:46][7.0]

Tracey: [00:15:47] There's definitely some shitcoins out there, and because of that, there's a saying that you often hear, which is do your own research. So don't just jump on something shiny and new that you hear someone talking about one day, you know, at work or on a YouTube channel, go back and take your time and look into something and the background of the project. What type of things should we be looking into, boys? What's on your list when you hear about a new project or a coin? [00:16:13][26.2]

Blake: [00:16:14] Yeah, the first thing that I do Trace is, you know, look at the team behind it and seeing what they've done before and what they're trying to achieve. And then I always look at, you know, what's the value proposition? Where does their product or where does their blockchain fit into the market compared to everything else? And then, you know, something a little bit more complicated is that you are looking to the economic model and you know what drives the token value or the the use of the token. [00:16:41][26.8]

Craig: [00:16:42] The thing I like to ask myself is, will this 100x in two days and if and if the answer is just kidding? Seriously, though, the thing I like to ask myself is, do I understand what this project is doing? Do I understand the problem it's trying to solve? Because if I don't, I won't have high conviction and I'll most likely sell at any opportunity. So it's also weighing it up. When I first saw Uniswap, I first use it for the first time and I was like, Wow, this is really game changing stuff. So I thought, this is a project I have high conviction in, so I felt better about holding it during the bad times. [00:17:16][34.1]

Tracey: [00:17:16] Yeah. Yeah, I'm going to hammer that one home that back in the day when I was losing money because I was jumping on one thing and then it would go down and I would sell, and then that would go up the next day again. And, you know, I was literally buying at the top and selling at the bottom, and it's because I was just jumping on things that everyone else was talking about. When someone much smarter than me told me, Make sure you understand what the project is and that you believe in it, or at least know what it's all about and understand it. And I think that's so important. Make sure that you know what it's all about. Do you understand it? And then you actually can see it going somewhere? Yeah. [00:17:54][37.5]

Craig: [00:17:54] And isn't it funny when as soon as you sell something for a loss to know where it goes up the next day, you notice that chasing the way, [00:18:00][6.1]

Tracey: [00:18:00] always the way. Yeah, every every single time. Blake, can you give us a rundown on how you see a good portfolio structure looking because this is a really important aspect. [00:18:11][11.0]

Blake: [00:18:13] Yeah. You know, everyone has their own idea of how a portfolio should look, and I know it's boring. But when I first started, there is a general rule to follow that I didn't, and it's regarded generally as best practise for a portfolio structure in crypto. It's basically made up of having 70 percent of a theorem in bitcoin in there, which is a low risk. I'm twenty per cent blue chip, which is medium risk, and this is basically any project over a billion dollars and then five to 10 per cent on most speculative investments like NFTs, ISOs and small caps. And when I first started, I think I was, you know, almost 100 percent in ISOs and small caps. So a decision that I definitely regret. [00:18:57][44.3]

Tracey: [00:18:58] And just remember, with any kind of investment, you don't want to be putting anything in there that you're not willing to lose. Bitcoin has a reputation for volatility, and the market can see swings of 90 percent drops, but then also sees a thousand per cent increases. And Bitcoin and Ethereum are the least volatile because they are much larger over time. As the industry matures, the volatility will decrease. This creates a lot of risk, but on average, bitcoin has increased in value 100 per cent per annum for the last 12 years. [00:19:29][30.8]

Craig: [00:19:30] Yeah, and these big returns, this is what attracts people to the market, but we encourage people to learn about the technology and get involved for the technology, and volatility is going to be normal in any new age market. You know, there's an example of a day for Coin called R V, which crashed 99 per cent and then went up five hundred X. So if you're investing something because you truly believe price shouldn't matter and it's always good to check the fundamentals and the risk and reward your comfortable with on each investment. [00:20:02][32.6]

Tracey: [00:20:03] To finish out today's episode, let's go around the table and talk about our favourite coins in today's top 10 and what we're liking, Blake, you're going to have a chat about Tether. [00:20:14][10.3]

Blake: [00:20:14] Yeah. So Tether is not necessarily my favourite coin, but I do think it is the most interesting coin in the top 10, apart from Bitcoin and Ether. And because, you know, one day I believe that stablecoins are going to replace all money, which is very different. You know, we've had paper and coin money for hundreds of years. And, you know, so it is really a change that here doesn't happen very often structurally to our financial system. And already many countries are looking at using stablecoins as their government issued money. You know, the euro's looked at it, China's moving direction. And one day they they all will. And on top of this, at the moment, you're able to earn, you know, something like 10 per cent per annum on these stablecoins and which is very different to the USD or the IUD that you would have in your bank account earning, you know, sub one per cent interest rate. So it's a financial instrument that creates lots of opportunities. And you know, it's going to pave the way of the future. [00:21:16][62.0]

Tracey: [00:21:17] And like I said before, I think you'll hear a little bit more about stablecoins in the news and read a bit more about it in the newspaper in the coming months. And we definitely will talk a bit more in an upcoming episode about stablecoins, because this is a lot to learn there. And Craig, which one of the top 10 are you going to talk about? [00:21:32][15.0]

Craig: [00:21:33] I'm going to go with Solana Tracey. Just building on Blake's New York analogy, New York is full of traffic. If you're not wealthy, you can't really do much over there. You can't drive. There's a gridlock. But Solana is, you know, it's new. It's cheap, it's quick and it's super, super easy to use. So I really believe that Solana could be not the Ethereum killer, but definitely a blockchain that's going to be used by a lot of retail investors like myself. What about you, Tracey? What are you bullish on in the top 10? [00:22:05][32.1]

Tracey: [00:22:05] Well, if we're looking at the top 10 and you've taken the two good ones, Solana and Tether, I would be looking at Polkadot. Polkadot would be my pick that's left out of that bunch. Dot or Polkadot, is created by Gavin Wood, and he was a co-founder on Ethereum. The system itself is meant to act as a bridge to all blockchains, and it's compatible with Ethereum, you know, with many big backers and a really strong community. I see this staying within the top 10 for a really long time to come. Let's leave it there for today, but we want to know what you want to know about crypto specifically. Any questions on anything we've spoken about today? So send us an email at podcast@getbamboo.io Or follow us on social media. All those details are in the show notes below, and don't forget to write and review and your podcast app. And that's it for this episode of crypto Curious. I'm Tracey. [00:23:01][56.2]

Blake: [00:23:02] I'm Blake. [00:23:02][0.2]

Craig: [00:23:03] I'm Craig. Thanks so much for joining us. [00:23:03][0.0]

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