Blockchain and Cryptocurrency: How to Invest and What Awaits Us?

Navruz Karimov, expert, CABAR.asia School of Analytics (Tajikistan):

This is a distributed database that contains information about all transactions carried out by system members. All information is stored in it as blocks that create a blockchain. All of them are connected by the hash algorithm that acts like a meat grinder, which turns any information into a mass that is impossible to decode. It is needed to protect the blocks and keep the database structure.

It is called distributed because information about the whole blockchain is distributed and kept with all network members. In other words, if anyone happens to have a failure, the database will not disappear.

There are two types of blockchain – permissioned and permissionless.

In the permissioned blockchain, a limited number of people have access to the system and only they can customise the system. It needs no built-in currency. Moreover, a wide audience has access to transactions in the view mode only. This type of blockchain is used in wholesale banking transactions.

In permissioned blockchain, all people have access to the database. They can view, change and add new blocks. Usually, this type of blockchain have a built-in currency and cryptoeconomics. Users believe they can use safe currency and protect their anonymity. Miners process transactions, generate new blocks and earn on commission charges. There are investors who can speculate or just possess a certain cryptocurrency for a long time.

Bitcoin is the first and most famous cryptocurrency that uses the blockchain technology. Transaction is the remittances of funds between users’ wallets. Information about it and hundreds of other transactions generate a block that connects to the chain of other blocks containing information about earlier transactions.

After bitcoin, other blockchain-based cryptocurrencies began to emerge. 

Navruz Karimov, expert, CABAR.asia School of Analytics (Tajikistan):

Yes, to be short. However, let’s see what money means and what functions it has in the society:

• Money is the way of payment for goods and service,
• Money is the way of assessing the cost of goods or services,
• Money can be kept as savings. 

However, all people must believe that if they go to a store and give a dollar, they will be given some bread or any other good instead.

To make sure that the money does not lose value, it should be difficult to raise, limited and have some qualities that add extra value to them. For example, bitcoin has such qualities, they are demand, safety, decentralisation, anonymity.

Based on the above, any cryptocurrency can be called money despite the fact that it is a bit of a code.

Elena Chigibaeva, founder of the community of girls and women in cryptocurrency, crypto enthusiast and investor:

There are nearly 10 thousand types of cryptocurrencies or coins in the world. This figure changes every day because new cryptocurrencies appear, and some cannot stand the competition and disappear.

Bitcoin is considered one of the most important cryptocurrencies, whose rate affects all other coins. Today, one bitcoin costs about 44 thousand dollars.

All other cryptocurrencies are called altcoins or alternative coins. These are any other cryptocurrencies with their blockchain other than bitcoin.

In addition, there are tokens. They are digital assets without their own blockchain. Instead of mining, tokens are issued by total emissions based on projects that try to raise funds for their project development.

There are also memecoins or shitcoins that are based on internet memes, relevant events, online communities, or influential persons. They do not have internal value or usefulness, are mainly based on existing algorithms and protocols, their popularity or mass trade depend solely on influential persons and trends.

There are also stablecoins, whose price is pegged to material assets – dollars, gold, oil, etc.

Recently, NFT and tokens GameFi, DeFi, SocialFi are said to be a variety of cryptocurrency.

NFT or non-fungible tokens. They are created to transfer blockchain-based rights of ownership to unique assets.

Tokens GameFi, DeFi, SocialFi are tokens of platforms and projects intended for internal payments and voting by users, a community.

Elena Chigibaeva, founder of the community of girls and women in cryptocurrency, crypto enthusiast and investor:

To choose a cryptocurrency for your investment portfolio, you can use website CoinMarketCap and see the listing of coins. It has, for example, the top 15 list of coins based on the volume of invested money in the market.

If you are interested in any cryptocurrency, visit the website of a project to see what it is and pay attention to:

• The community – how many people follow the project, support it and take part in it;
• The project description, technologies used;
• The volume of existing and circulating coins;
• The price of cryptocurrency over time: how price changed? What was the price correction? For example, you can see the annual increment on Crypto Bubbles;
• The value – what the project gives and what is the main point of the technology.

Elena Chigibaeva, founder of the community of girls and women in cryptocurrency, crypto enthusiast and investor:

• Invest your extra money that you won’t need soon;
• Do not invest the money you borrowed;
• Check the cryptocurrency before buying;
• Diversify your portfolio – do not put all of your money in one cryptocurrency;
• Set specific profit goals;
• Do not buy the hype as you can become a victim of scammers;
• Do not choose isolated or centralised projects.

Nurislam Nurgalyi, co-founder of Neo Capital, entrepreneur, crypto enthusiast and investor:

Yes, as in any other sphere related to money. For example, there are the so-called scam projects. They can be divided into two types:

• Projects that issue cryptocurrency in the wake of hype. They usually do not have any value or technology.
• Projects that have carried out their obligations to investors for some time, and then stopped keeping to their roadmap. 

Scam projects can be:

1. Short-term. They are actively advertised, promise high profits, but after a flow of investors comes, the project closes immediately. Very often, their life span is about a week.
2. Mid-term. The project gathers pace gradually and even pays dividends for a while out of other members’ contributions. But when the flow of investors decreases, the project closes. Their life span is about a month.
3. Long-term. First, the project pays regular profit to investors, and when the new flows of investments cannot cover expenses, the project closes.

Nurislam Nurgalyi, co-founder of Neo Capital, entrepreneur, crypto enthusiast and investor:

The first sign of a scam project is no function of money withdrawal. In other words, you can buy the cryptocurrency, but you cannot sell it.

Also:

• They promise excessively high return on investment;
• They promise special benefits of return for investors who invest greater sums of money;
• The project website is not well developed, can contain inauthentic materials and images;
• The project idea is absent or poorly developed;
• Poor maintenance support of the project, no technical support, underdeveloped internet resource. 

For example, Squid Game coin emerged in October 2021 based on the popular series ‘Squid Game”. The coin was allegedly intended for the never launched cryptogame ‘Squid Game’. The coin rate skyrocketed up to 2,861 dollars in a week, and 10 minutes after the peak, the coin cost 0.0008 dollars.

The coins could not be sold as it was suggested that people could exchange it for their national currency when the game was launched. The project founders are unknown; they earned over 3.3 million dollars on the scam.

Nurislam Nurgalyi, co-founder of Neo Capital, entrepreneur, crypto enthusiast and investor:

• Assess the demand and tangibility of the idea;
• Find out more about project founders and pay attention to biography and education of founders, as well as their previous projects;
• Study the offered development strategies;
• Analyse the roadmap and compliance with it;
• Assess the reliability of the technical input of the project;
• Read the news and opinions of experts about the project;
• Read the reviews about previous projects of developers, if any;
• Check if cryptographic audit was performed.

Askar Begaliev, founder and general director of IT company, Oracle Digital, founder of Netex.kg project (the only blockchain service in the Kyrgyz Republic now):

Their future is related to the development of internet and meta universes.

As to the former, the history of internet can be divided into three stages:

1. Web 1.0 – from 1991 to 2004 – users could not interact with the website, but only read.
2. Web 2.0 – from 2004 to the present – users can influence the content – publish texts, photos and videos in social networks.
3. Web 3.0 – it is just a concept of the internet of the future, which will be based on decentralisation, with no single body of control and censorship.

It is expected that the basis of Web 3.0 will be blockchain technologies.

Besides, large corporations now move towards the meta universe. The notion of meta universe first emerged in 1992 in the science fiction novel ‘Snow Crash’ by Neal Stephenson. According to the book, corporatocracy rules on earth in the 21^st century – countries abide by the rules of major corporations, and they join together in the meta universe (three-dimensional virtual reality). People there interact with each other. The real and virtual worlds are interweaved: events in one world can affect the events in another world.

In October 2021, Mark Zuckerberg changed the name of Facebook to Meta and announced that the company was waving towards the metaverse.

Afterwards, Microsoft presented its platform for joint work in virtual reality with 3D avatars.

Today, the examples of metaverses are:

• The Sandbox — a game for mobile phones (iOS and Android) and Microsoft Windows developed by game studio Pixowl.
• Decentraland – a decentralised platform in virtual reality that consists of 90,601 land plots.
• Roblox — a multiuser online platform, where users can play games created by other users and create their own games.
• Fortnite — a computer online game developed by American company Epic Games.

Askar Begaliev, founder and general director of IT company, Oracle Digital, founder of Netex.kg project (the only blockchain service in the Kyrgyz Republic now):

New economy develops along with the development of metaverses. Plots and goods can be bought in virtual reality for national currency or cryptocurrency. For example, Gucci on Roblox has sold the virtual bag at a price more expensive than the real one. Coca Cola has presented its lines for avatars in Decentraland. Nike has opened its virtual office on Fortnite, and Balenciaga will sell virtual collection for avatars on Fortnite.

The metaverse is scattered on the internet, but I think that global corporations move towards its consolidation. Its capabilities can reverse the way we work, spend and entertain. Here NFT comes to the fore, or legitimate ownership of virtual things in virtual worlds.