INDUSTRY FOCUS 10/20/17: HYPE-Coins Versus UTILITY-Coins

Cryptocurrency investing really can be the "Wild Wild West" when it comes to the different offerings that are available to coin investors. On any given day you can walk into, a virtual market for coins, and come upon a shelf with 2 coins sitting side by side with vastly different identities. Those differing identities carry differing repercussions after investment.

Most of the time the coins fall into two categories... Hype Coins and Utility Coins. Utility Coins is just a short way of stating that the coin has real world "viable" utility, or utilization. Bitcoin is the best example of a Utility Coin. It has been utilized for years now as a means of anonymous payment transfer. It has been utilized by the offshore sports betting industry as a means to eliminate all payment risks in their business model. Bitcoin has also been utilized as a store of value option for people living in jurisdictions with depreciating monetary policies or depreciating currencies. Globally, Bitcoin has been utilized as an investment tool for businesses and individuals alike. This is what 5 years of Bitcoin utility looks like.

But utility takes time. You have to build it. This graph of Bitcoin would show even larger returns if we could go further back in time. The reason the world breathes so heavy at the thought of Bitcoin, is the enormity of it's utilization... not the enormity of it's hype. In fact it's that very reason, that the entire world for the most part missed the opportunity to reap the gargantuan returns of Bitcoin. When Bitcoin was being built in the earliest days, there was no cryptocurrency market/industry and no one to hype to. Bitcoin toiled quietly from the point of imagination to application, and then entered the brave new world as something unknown and unproven... but with utility, if only yet to be realized. The early adopters, the Sports Betting Industry had nothing to lose. The US Unlawful Gaming Act was cutting into their ability to receive money from their clients via credit card, and they were left with more risk via third party processors. Credit cards had always been higher risk in general anyway, but the risk and restrictions were increasing. So they kind of stumbled into Bitcoin and tried it out, and it performed marvelously. So well, that the entire industry adopted Bitcoin as their #1 method of payment. From there, their clients also recognized the genuine utility of Bitcoin and made it their preferred method of payment. This became the tipping point, where Bitcoin was connected to the $400 Billion Dollar US Sports Betting Industry. That demand drove the price up dramatically, as the buying was enormous for a widely unknown cryptocurrency. Sportsbooks began realizing their profit margins in Bitcoin instead of in fiat currency, and it was like they were getting a pay raise. Instead of making 10-20% margin in dollars, they were making 10-20% margin in Bitcoin, an appreciating asset. That asset saw a x100 return in 2013 alone. So their profit margins took a x100 return as well. That's all that was needed to wake up the sports betting industry and isolated sections of the investment industries. Investment was then added to the mix, and that investment has increased globally until today. But everything that has taken place was first built and rooted in Utility.

Unfortunately, true Utility is hard to come by. It's just easier to create a coin or copy a coin and hype it to profit. So you find that in a market of over a thousand cryptocurrencies it is likely that 95% or more of these coins do not have real world viable utilization. Some do not hide it. They simply present themselves as a coin and a wallet. Others present imagined utilization, and investors are left to find out on their own if the path is viable or not, over time. In most cases these are new applications that have never been realized before... so there's no model to compare the investment to. That's what is so impressive and so important about Wagerr. Everything about it is rooted in the model of Bitcoin. Wagerr shares the same exact existing industry as Bitcoin (the $400 Billion to $1+ Trillion Dollar Global Sports Betting Industry). It also shares the exact same application and utilization... Sports Betting. But it also has many advantages that Bitcoin didn't have. It has a population of Global Investors that are awake and already "Turned On". That means that the world is anticipating the next viable coin with true utility and appreciation. Once it is discovered, they will find that coin faster and with more investment relative to the process that Bitcoin followed.

Wagerr also passes along new advantages to bettors. Just as Bitcoin erased risk for the Sports Books, Wagerr erases risk for the Sports Bettor. Through use of decentralized smart contracts, winnings are paid into a wallet that coinholders possess after every win. Meaning they gain complete control over their money and can wield it for their own purposes at any time. They no longer have to call the Caribbean and cross their fingers waiting for a payout. And there are no limitations on access. They can access all of their money at any time. Plus, the Sports Bettor now owns an asset instead of fiat currency, so like the sportsbooks with Bitcoin, Wagerr bettors own an appreciating asset. They could potentially lose more games than they win and still come out on top as their asset grows in price. Plus Wagerr has built in price management with Value Coupling that burns coins continually to control supply and promote scarcity, resulting in price increases. All of these things are added gas that even Bitcoin did not have... so there are so many advantages built in, that will encourage explosive growth once development becomes realization.

So the question is, isn't Wagerr a hyped coin until it reaches "realized" or "completed" development? The answer for the most part is No. There is an element of hype. It is hard to discuss all of Wagerr's potential and strengths without getting hyped up. It's natural to get hyped about it. But the definition of hype that we're using involves the way the team procedes with development. It also involves the viability of the coin or the idea, and the teams willingness to reap price increases prior to development.

When Bitcoin was being built, there was relatively no one to "hype" to. So that left them largely to put their energy into development only. There was no need for daily input to the Bitcoin community because there was no Bitcoin community... or at least it was just a very small pocket of followers. Instead they were left to build and realize the development quietly.

Wagerr, as a newer coin has a relatively larger community of investors in the coin... so that's a bit different. But Wagerr for the most part follows this same quiet development approach. They have been post ICO for 3.5 months and they are working. They put out announcements if there are delays and they put out announcements when there are advancements. And that is all. They announced twice within 2 weeks a single delay announcement explaining that some milestones in the roadmap would occur on time and some would delay 3 to 6 months. They announced the upgraded Wagerr Wallet when it became available, and provided steps to obtain it. And they provided the announcement when Wagerr Betting was enabled for the Conor McGregor / Mayweather fight, along with the instructions for it. Other than those few occassions they have largely been quiet in development. They have not been making promises of any sort. And quite honestly, they have not been spelling out the opportunity that they represent. They never connected dots for investors. They never drew comparisons from themselves to Bitcoin, though they are many and substantial.

More importantly though... they were disinterested in opening the coin to exchange trading. Exchange trading is the gateway to Hype.

They had no interest in exchanges, even though coin appreciation would have been the result, and would have been to their benefit in the near term.

The only reason they opened Wagerr to the Waves Exchange, was that they needed a smart prepackaged solution that would quickly and reliably provide investors with access to their newly owned coins post ICO. It just so happens that the Waves Wallet they utilized has an exchange. That's really the only reason Wagerr has exchange access right now. In fact a closer observation is that the Wagerr team wanted to be clear that ICO participants could keep their coins on the Wagerr website securely until MainNet launch (realized development).

So the bottomline is, yes there is a degree of hype in the Wagerr project, but it comes from outside of the team and it's relatively responsible hype based in all of the fundamental opportunity that is built into the project.

There are many coin investors though that prefer the other type of "Hype" coins. You know the coins where they as early investors buy in before you do, and then hype to you actively or passively. They chat in slack channels about how great it's going to be, or late investors see the "pump" of the early investor, only to see the "dump" after they buy in. A lot of investors prefer these tight windows, and throw their money into coins like Peyton Manning and Aaron Rodgers throwing footballs into tight openings. Their plan is to get in and get out with profit. They could care less about success of the project or success of other investors. It's this model of investing where you truly have people left holding the bag. We ought to be thankful that Bitcoin and Wagerr don't represent these types of opportunities. As it stands right now, many many people globally are reaping profits from Bitcoin Utilization, and not directly at the expense of other investors. It really is best to control trading on a coin until it has completed it's development. Otherwise you have the "Wild Wild West" or even "Boiler Room", where winners are few and losers are many. That dirty side of investing comes from projects that knowingly trade or encourage trading on coins that are not developed or may never develop. Wagerr has restricted trading as much as possible, even to the begging of short term coin holders looking to flip quick profits. And again this is despite the potential to profit on price increases their coins would gain as well. Here is the trailer from Boiler Room for a good example of what trading for profit on companies without development looks like. I for one am thankful the Wagerr Team is focused on development and not trading until the development is reached first.

Now that's what a lot of young ambitious investors want... they want profits at all costs, and don't care who is left in their wake.

There are many coins out there that are actively trading and have been actively trading for years during development on multiple exchanges with nothing to show their investors in terms of development. One example is CasinoCoin (CSC). Let me say this. I'm not saying they are dirty, and I'm not saying they are a bad investment now. What I am saying is they were available to buy, at one time on multiple exchanges over a four year period... and they never developed their coin properly. Their original vision was a little spotty to be honest, and I think most people would likely have questioned their path. Two years in, they had cards to sell CasinoCoin offline, where the cards were like minute phone cards. They were somehow going to encourage players to play at those online casinos they were affiliated with. But they had an offline presence essentially with those cards. That to me kind of reeks of a flawed path. But given the sensational returns of cryptocurrency at the time, no doubt people likely jumped in blindly.

You can read the four years history of CasinoCoin through their page, then click the link for announcement to lead you to their community forum on Bitcoin Talk to see for yourselves.

Bottomline is the old CasinoCoin tanked for four years and was traded up and down on hype alone in multiple exchanges leaving bagholders. The entire history is in BitcoinTalk.

In any case, it wouldn't be relevant at all except for the fact that CasinoCoin (CSC) has relaunched under an entirely different management team and with different advisors. However they hold the same website URL, and there's very little about about the coin's purpose or roadmap. The only thing being explained now is that the coin is going to be connected with regulated gambling operators online. As an investor it doesn't hurt to have diversification. To have a decentralized opportunity and a regulated opportunity also couldn't hurt if the path was laid out and seemed viable.

But, thus far the coin is trading on hype only. The coin has rocketed based on nothing more than pictures and profiles of the advisor team and their pedigree.

So, while the project and coin are officially "relaunched" under a new team, and have shifted from cards, to a decentralized casino coin, to now a regulated coin, it is presently trading on zero development all over again. It's yet to be seen if this hype coin can become a utility coin, and offer a long term path for investors.

Wagerr on the other hand, has dominated the gambling segment for it's 3.5 month existance (in terms of ROI), because all of these coins are still in development. Even Edgeless got pumped on development "news", and peaked at $1.42. For sale/trade across many exchanges, Edgeless is down today, with it's price at 49 cents per coin as of 3pm ET, US.... only 30 days later. That hyped buying and trading across many exchanges before real development, leaves bagholders. Edgeless buyers caught up in last months news are likely to see their coins worth only a third of what they bought them for last month.

Wagerr has only been in existance 3.5 months, and despite a slow and quiet pace, the subtle signs, the quiet decisions and the data itself keeps pointing back to the truth that they are making some good long term decisions in there. It still is a speculative investment, but among an ocean of pretend coins, it's one of the most viable, and it's potentially the most explosive and legitimate opportunity available. We should remember that each time we see the whales entering in 25 bitcoin buy orders. For most people, Wagerr is the opportunity they are looking for even if they don't realize it yet.