Dash passed Monero in market cap. It’ll eventually be #3 behind Bitcoin and Ethereum

Cryptocurrencies are all about incentives and network effects and right now Dash has a better mix of them than any of the other altcoins.

Bitcoin will remain the 800-pound decentralized currency gorilla given its brand familiarity, time in market, and deep investor base.

Ethereum’s potential is still enormous as the one blockchain that rules them all: ICOs, dapps, hybrid and consortium blockchains, Vitalik’s genius.

But in the mix with Dash are Monero, Ethereum Classic, Litecoin, and Ripple.

Ethereum Classic won’t grow no matter how much Barry Silbert pumps it up. Sorry die-hards.

Litecoin is silver to Bitcoin’s gold. Silver is ~$14B USD and Gold is ~$7T USD. If the same ratio holds than Litecoin should be 500x smaller than Bitcoin. Bitcoin is currently ~$20B USD (for ease of calculation) which puts Litecoin at $40M USD. Litecoin is currently almost $200M. So overindexed 5x. And not much community nor innovation that I’m seeing beyond (possible) Segwit implementation.

Ripple? Um, no. A test money for a small network of banks.

Monero is for drugs and dark markets. Definite upside. But may just act as a transactional in-and-out currency while people prefer to hold bitcoin. And there’s plenty of competition besides. Not sure yet.

Dash, meanwhile, is fascinating if only because the positive feedback loop is so strongly self-reinforcing. A higher price means the development team is paid more (10% of block rewards) and thus encouraged to build and promote. A higher price means Masternodes earn more and thus are incentivized to buy and hold more Dash (45% of block rewards) and involve themselves in decision making. The community is more active than any besides Bitcoin and Ethereum. The self-governance model has room for improvement but shows promise as a way to truly decentralize and thus accelerate consensus building and decision making.

I took a big Dash position at $17 and may add more later. Currently it’s 4% of my portfolio.