What Cryptocurrency Should I Invest In? A Lesson on the Power of Dividends

Buying shares in a Company can be an exciting experience, however buying shares in a Company that pays dividends can be empowering. Owning dividend paying stocks allows you to make a passive income, which can often be referred to as “making your money work for you”. Warren Buffett himself holds 92.5% of his portfolio in dividend paying stocks, which pay him on average 2.9% per year (source). Now 2.9% per year sounds pretty good right? It’s a whole lot better than buying a stock that pays nothing. However, what if I told you that there was a stock that paid 11% per year? Well, there is, and it comes in the form of a new blockchain technology, so lets explore…

When thinking about investing in a blockchain technology, it can be beneficial to think of every blockchain as a DAO (Decentralised Autonomous Organisation). This allows you to critically analyse the technology using a simple process before diving straight into the investment. For demonstration purposes, lets look at Bitcoin as a decentralised autonomous organisation. Bitcoin is similar to a regular organisation, it has a product (settlement layer), shareholders (owners of bitcoin), revenues (transaction fees), costs (payments to miners), employees (miners), voting rights (miners), charter (bitcoin core), customers (users of bitcoin). All these features are requirements of a organisation and as you can see, bitcoin, and for that matter, all blockchain technology meet these requirements. I know, it’s confusing right. Is it money, a organisation or something else? Well it can be used and thought of as both of these and more, but for investment purposes I prefer to look at it as a DAO, it just makes it easier.

So now that we have clarified how these technologies can be viewed as DAO’s, lets look a little deeper into some of the most promising (top 10 in market cap) DAO’S that are currently on the market.

Bitcoin Wallpaper

DAO Specifications (non dividend paying)

  1. Product = decentralised settlement layer
  2. Shareholders = owners of bitcoin
  3. revenues = fees charged for transactions
  4. costs = miners
  5. employees = miners
  6. voting rights = miners
  7. charter = bitcoin core
  8. customers = bitcoin users

Benefits for Investors

  • Largest market cap
  • Most liquid market of all blockchain technologies
  • Biggest user base
  • Capped Supply
  • Oldest blockchain technology
  • Over 1 billion dollars has been invested in companies building the infrastructure

Downfalls

  • Doesn’t pay dividends
  • Controlled by a few big miners, who don’t necessarily have a stake in bitcoin
  • Development is funded by 3rd parties

ethereum wallpaper

 

DAO Specifications (non dividend paying)

  1. Product = distributed world computer
  2. Shareholders = owners of ether
  3. revenues = fees charged for transactions
  4. costs = miners
  5. employees = miners
  6. voting rights = miners
  7. charter = ethereum core
  8. customers = ethereum users

Benefits for Investors

  • Worlds first decentralised computer
  • Uses a development fund to fund developers
  • A large amount of development happening on the platform

Downfalls

  • Doesn’t have a capped supply
  • Doesn’t pay dividends
  • Controlled by miners, who don’t necessarily have a stake in ethereum
  • Young technology

Dash Background

 

DAO Specifications (11% dividend yield)

  1. Product = decentralised payment system
  2. Shareholders = owners of dash
  3. revenues = fees charged for transactions, instantx, privacyprotect
  4. costs = miners, masternodes and budget proposals
  5. employees = miners and masternodes
  6. voting rights = masternodes
  7. charter = dash core
  8. customers = dash users

Benefits for Investors

  • Pays 11% dividends
  • Investors have voting rights
  • Capped supply
  • Development is funded directly from the blockchain
  • 2 tiered network allowing services to exist within the network (think apple computers – they owned the software and hardware)

Downfalls

  • Not as much liquidity as Bitcoin or Ethereum
  • Young technology

safenetwork Photo

DAO Specifications (non dividend paying)

  1. Product = decentralised internet
  2. Shareholders = owners of maidsafecoin
  3. revenues = fees charged for transactions
  4. costs = providers of computing resources
  5. employees = providers of computing resources
  6. voting rights = providers of computing resources
  7. charter = maidsafe core
  8. customers = maidsafe users

Benefits for Investors

  • First decentralised internet
  • Uses a flexible supply side to help reduce price volatility
  • Pays developers for developing

Downfalls

  • Doesn’t have a capped supply
  • Doesn’t pay dividends
  • Young technology

bitshares

DAO Specifications (non dividend paying)

  1. Product = decentralised exchange/credit market
  2. Shareholders = owners of bitshares
  3. revenues = fees charged for transactions
  4. costs = miners and delegates
  5. employees = miners and delegates
  6. voting rights = owners of bitshares
  7. charter = bitshares core
  8. customers = bitshares users

Benefits for Investors

  • Investors have voting rights
  • Capped Supply
  • First decentralised stock market
  • Pays developers using development fund

Downfalls

  • Doesn’t pay dividends
  • Doesn’t have high liquidity
  • Young Technology

Factom photo

DAO Specifications (non dividend paying)

  1. Product = decentralised record keeping system
  2. Shareholders = owners of factoids
  3. revenues = fees charged for transactions
  4. costs = miners
  5. employees = miners
  6. voting rights = miners
  7. charter = factom core
  8. customers = factom users

Benefits for Investors

  • Uses a flexible supply side to help reduce price volatility
  • Biggest decentralised record keeping system

Downfalls

  • Doesn’t pay dividends
  • Doesn’t have high liquidity
  • Doesn’t have a capped supply
  • Young Technology

Summary

As we stated earlier, buying shares in a company can be exciting, however buying shares in a company that pays dividends can be empowering. Dash is currently the only top blockchain technology that offers any kind of dividend yield, and an extraordinarily empowering one to say the least. For that reason, I believe Dash should not only be a part of every blockchain investors portfolio, it should be a large part of that portfolio.

As Albert Einstein once said “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it”.

 

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