HOW WE EVALUATE NEW COINS: J.A.R.V.I.S. Phase I

In today's rapidly moving market, finding the right Blockchain company to invest into can be challenging.

Currently there are over 1,300 blockchain companies or cryptocurrencies listed and there are over 100 new ones coming out every single month. This makes finding the good ones from the bad ones very difficult and time consuming.

The 3 stages of Emerging Technologies, tell us that any new technology goes from "innovators" and "early adopters" and into the most profitable phase of Early majority.

We know that finding the companies that make it through to the 3rd stage of Mass Market Adoption is the key to making massive wealth.

Think back to the last big technology boom, the Internet Boom of the late 90's. Remember the famous Pets.com example. They raised millions and millions of dollars, and lots of people were rich overnight from the stock, but just as fast as they came, they went, leaving people broke.

But the companies that made it through this cycle, like Amazon, have returned massive profits and wealth for those that were able to see the opportunity and take part of this

The goal of The Digital Underground is to find the few companies that will become market leaders through this final phase of Mass Market Adoption.

This becomes very challenging with there are hundreds if not thousands of new companies to go through each month. But using a few key questions helps us to weed out over 90% of them right off the bat, giving us time to really dig into the remaining 10%

Question #1.a

What is the problem they are trying to solve?

and are the only ones trying to solve this problem? Or are there others who can come in from the outside and solve their problem.

Example is Pot coin.

They want to solve a problem for the legal marijuana industry. The problem is that most banks won't work with the legal marijuana industry so they are forced to deal in all cash.

Often times having very large amounts of cash, and this creates all types of problems as you can imagine.

Pot coin came up with a solution.... They created a coin just for this legal marijuana industry to use instead of cash solving this big problem.

Now this sounds like a good idea. A big problem and a nice solution. However, why doesn't the legal marijuana industry just use of the the many existing cryptocurrencies that are already out there, and are more accessable and widely adopted?

Did they really need to have their own coin?

For us, the answer is NO

Read more on our opinion Potcoin here: https://www.facebook.com/groups/blackcryptoinvesting/permalink/145272386244780/

Read on how Dash (bigger dog) is competing against Potcoin here: https://cointelegraph.com/news/digital-currency-looks-to-solve-cannabis-industrys-cash-problem

So what has greater upside, Dash or Potcoin (Dash is currently being monitored as part of JARVIS’ active long term position dashboard, but don’t buy on this recommendation because our chatter levels indicate that the price is a bit high)

Which horse would you rather bet on? Dash, which if successful, would solve the problem Potcoin is solving and more? Or Potcoin, which if successful, will still be a small fraction of what Dash could handle…

Question #1.b

Are they using the "blockchain" technology to it's highest and best use?

meaning, are they using the blockchain to solve a problem that only the blockchain can solve?

We see many new companies today "creating" a problem, and then "creating" a solution using the blockchain. But the problem could just be solved using traditional means.

To us, this is a non starter

Question #2

How is their coin or token being used?

We are looking for coins that are referred to "Utility" coins. Meaning they are needed to run the on the network.

A good example of this is Ethereum.

Ethereum is a platform that most new blockchain companies are being built on.

And in order for the new companies to process transactions on the Ethereum blockchain they must use the token called "ether"

As more and more applications are built on the Ethereum, this makes the ether token more valuable, which then pushes the price of the token up.

So we are always looking for blockchain companies that have their tokens useful, so we can find a way to make profits on our investments.

Many new blockchain companies use their tokens as Securities, like shares of stock. You own these tokens like you own shares of stock but why would they go up in the future?

We want to see utility tokens.

The Remaining 10%

So by asking the above two questions:

1. Are they solving a real world problem with unlimited demand
2. How is the token being used and how will the coin appreciate?

That let us weed out over 90% of the coins.

After running the new blockchain companies through the previous questions, we are left with a few remaining companies to evaluate.

We then spend hundreds of hours digging into these remaining companies to find out everything we can about them.

After digging through 100's and 100's of blockchain companies that have been success and failures, we have identified three characteristics of successful blockchain companies.

For a new blockchain company to have the highest chance of success, and survive into the 3rd and final phase of Mass Market adoption, the should have one or more of these Three Keys.

Key #1 – Scalable

This goes back to one of the earlier questions we asked, which is...

"does it have unlimited demand"

Because we're looking for coins that solve real problems with unlimited demand, we need to make sure that the coin is scalable enough to handle this.

This means that their code is written in such a way to be able to run the amount of transactions needed to solve a global problem.

Can they run transactions like the Visa Network which is 150 mil transactions per day?

Or are they like Bitcoin is now, where they have not been able to scale with the growth and demand, and now the transactions can take 10 minutes or longer sometimes.

So scalability is the first key we look for.

Key #2 – Interoperable

The blockchain technology at its core is simply a digital Ledger, keeping track of deposits and withdrawals.

Currently there are all types of ledgers, such as what banks use, and other types of businesses.

but all of these ledgers are private and are not able to transact and communicate with each other.

For example:
Paypal keeps a ledger of how much money you have, your deposits and withdraws,
Your Visa card does the same.

However these 2 ledgers or systems cannot talk to each other, they are not able to "operate together" or be "interoperable"

For something to truly scale it must be able to operate with other ledgers, both online and offline, blockchain ledgers and traditional database ledgers.

So companies that build out their code to be able to interoperate with other ledgers and blockchains will have massive success and that is why this is the second key to success.

Key #3 - Fat Protocol

Protocols are what allows the technology to work.

Think of the internet, currently there is trillions and trillions of dollars of business being done on the internet technology, and the entire internet technology uses two protocols...

These are called IP and TCP.

You have probably heard of these before but might not truly understand what they are.

To make it simple,

IP or your "IP address" as you may have heard is the address of your computer on the internet.

TCP is the connection that is opened between your computer and another that allows you to upload and download information.

These two protocols, TCP and IP power the entire internet... trillions of dollars of business is conducted using these two protocols every minute of every day.

But nobody owns these two protocols...

In the internet technology world, it's the applications that are "fat", applications are the Facebook's, Amazon's, and Google's, we call them "Fat Applications" because they make all the money, where the protocols or the platform makes none.

But the blockchain technology space will be very different...

In the blockchain technology world we have a chance to own the equivalent of TCP and IP, in the blockchain technology world the protocols will make the majority of the money while the applications make a little which is why we call these "Fat Protocols" because they are making the money...

As I said TCP and IP are powering trillions of dollars of business on the internet, can you imagine owning a piece of that and getting paid a percentage for its use?

Well that's the opportunity we have today and that's the third key that we look for.

THE BLOCKCHAIN WILL BE DIFFERENT:

The blockchain space is being built much differently.

In this new blockchain world, the applications, the new Google and Facebook type applications will make a little bit of money, while the protocols, what actually makes the applications work, will make the majority of the money.

This means that platforms and ways to make these blockchain applications work will be worth the most, and that is where we want to look at investing.

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