Hello,
I’ve been learning about crypto since about a year or so and I invested a little money into it to understand better and try to make gains on EVM compatible blockchains. I definitely think there is some good in it and having possibilities to do things like loans on a blockchain, without trusting anyone, is really "revolutionary". However, lots of things I use feel like ponzi (mostly yield farming stuff and tokens specific to liquidity pools, etc..) and the recent events with Terra increases my fears. So I now only stick on simple things like grid bots between Bitcoin and Ethereum, and DCAing into Bitcoin as much as I can because I think they are good investments and I really took the time to understand the underlying technologies. However some things are really missing on Bitcoin that would make it perfect that Monero have. Monero is truly private, and thus have much greater chances of achieving its role as a currency.
However, my primary goal here is to build a portfolio that will generate me some kind of return in the long run, as a hedge against inflation. The biggest and most influential cryptocurrency as of right now is BItcoin and basically every crypto currency follows it. So when investing in a new cryptocurrency I check its price against Bitcoin to see if it holds value. Here’s the graph that correlates the price of Monero against Bitcoin:
Overall, Monero feels like a good investment right now because it will soon reach a "low", so I’m pretty sure I am not "missing out" on the potential returns that Bitcoin could give me, plus Monero seems to increase in value against Bitcoin pretty often so some simple trading strategies could be applied to it. However, I don’t see myself buying Monero when its price hits 0.02 BTC/XMR for instance. I’m thus considering to soon convert 50%+ of my Bitcoin into Monero. Also, though Monero doesn’t have a max number of coins, its supply is slowly growing so it has the same "rareness" potential as the 21 million max bitcoins. I thus consider it as a proper hedge against inflation.
If I were to invest into Monero in the long run, I would continue to buy Bitcoin regularly on CEX exchanges and once the BTC/XMR rate seems interesting to me, I’d convert my Bitcoin into Monero. However, they are risks inherent to Monero:
- my country could at any moment forbid Monero for anti-fraud, anti money laundering or other illicit activities and then I would lose all my money invested
- I suppose that doing my tax reports would be very difficult because I might not be able to prove from where my money originates from
- possible better privacy oriented crypto could be created. I’m thinking of Zcash here.
- I didn’t read the whitepaper as of now so I won’t invest in it until I fully understand how it operates. This can be easily fixed :)
- I don’t want to have to think all the time about cryptocurrencies. I want to do a simple bot that buys automatically and once in a while I will withdraw my assets into my wallet. I don’t want to keep track of other available privacy cryptocurrencies on the market and study them every time.
- I own a Trezor One which doesn’t support Monero. So what I am planning to do is create my software wallet in a secure OS like Tails and encrypt my private key with my gpg key secured on my Trezor, access to my wallet would thus be restricted and there are still risks associated with my hardware being compromised (i’m thinking of the privileged access that have Intel ME and the AMD equivalent).
- The hash power is much slimmer on Monero than on Bitcoin so the blockchain is less "robust"
- PoW seems a little bit dated and its equivalent PoS seems more sustainable for the planet. However, I’ll have to check if ETH 2.0 succeeds before making this a top priority.
Basically, I really want to find the perfect asset I can safely invest 10+ years without thinking about it. Do you think Monero can achieve this? Why?
Thanks in advance!
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