No element of finance or technology has caught the attention and imagination of mainstream news media, and the people that consume it, more than bitcoin and blockchain have done during 2017.
Right now, the former is taking something of a hit to its market capitalization based on negative fundamental developments out of China. With that said, however, bitcoin is still priced in and around $3500 per coin and its market capitalization currently sits in excess of $57 billion. Once the pressure from China eases, and it will, both of these numbers should increase dramatically towards and subsequently beyond previous highs of circa $4800 apiece.
And that's just bitcoin.
The technology that underpins the cryptocurrency, blockchain, has practically unlimited applications in the global commercial world. The simplicity and efficiency of a decentralized public ledger that records encrypted data and stores it indefinitely, without the potential for alteration, could revolutionize pretty much every aspect of the way we live and work.
And this isn’t just speculation. Right now, hundreds if not thousands of companies are building technologies that are changing their respective fields for the better. Companies like Tezos, which recently raised more than $232 million as part of its initial coin offering (ICO) and Bancor, which raised $150 million in its own ICO, are leading the charge for change.
Even with these large capital raises, however, and with the hundreds of companies pushing for technological change, the space remains somewhat under the radar. A large knowledge gap prohibits many traders and investors from picking up an exposure to some of the assets that are returning thousands of percentage points in reward and, for these individuals, this knowledge gap is an opportunity missed.
With global equities markets riding high against a backdrop of geopolitical and military uncertainty, the risk of an economic downswing in the US and internationally is ever present. Traditional safe-haven assets like gold are benefiting from risk off sentiment but, as outlined above, these traditional assets are poised to be superseded by decentralized (and, by proxy, risk mitigated) assets like cryptocurrency.
For a trader or investor looking to take a position in the cryptocurrency space, be that to limit the risk of a downswing in the more traditional assets or to gain exposure to the reward that these newer assets are offering, a number of options exist.
Buying bitcoin outright is an obvious choice. Taking part in ICOs is another alternative, albeit relatively risky based on the difficulty associated with assessing a technology startup's longer-term potential.
One option that many are landing on right now is an altcoin exposure.
These are cryptocurrencies that, just as does bitcoin, rest on the blockchain technology that has proven so effective and, in turn, pivotal to, the meteoric rise of bitcoin and the cryptocurrency space.
A number of altcoins are available right now, many of which have slightly different features built into the code on which they rest, with these differences designed to differentiate them from (and, in most cases, serve to improve on) the bitcoin blockchain.
Litecoin is one of the most well known examples, commonly referred to as the silver to bitcoin's gold. Ether, which is the token associated with the ethereum platform, is another. The latter is a smart contract platform that has served as the building block on which a number of the above mentioned ICOs are based.
Both of these coins, however, have already drawn a lot of speculative attention. With speculative attention comes an influx of buy volume and, as a result, this means that a large portion of the opportunity to gain exposure to early gains has already passed.
So, the question now is, for an investor looking not only for an altcoin exposure but for one that remains somewhat under the radar and, as such, still has a large potential for rapid upside reevaluation, what options exist?
There are a handful of just this sort of opportunity available right now in the markets but none of them are as innovative and potentially game-changing as Sonocoin.
For many reading, the cryptocurrency space and technology on which it rests will likely be relatively new and, as such, seemingly complex. In order to tackle this issue first, then, and so as to facilitate an understanding of what exactly differentiates Sonocoin from its peers in this space, it's worth taking a quick look at exactly how cryptocurrency transactions work.
We will use bitcoin as an example.
One thing that many don't realize about bitcoin is that, as far as any sort of physical or even digital asset is concerned, it doesn't actually exist. All that exists are wallets, which are identified by a string of numbers and letters, and the blockchain, which is a ledger of how many bitcoins have been sent from one wallet to another. An individual who wishes to send bitcoin from one wallet to another accesses said wallet and signs off on the transaction with a private key. The private key is in place to prove that the individual owns the wallet and, once signed off, the transaction takes place.
It is then verified by a process called bitcoin mining, which is where computer power is used to add a group of transactions (called a block) to the blockchain (the record of previous transactions) and stamp it with a hash, which is a sort of time stamp made up of data from both the current and the previous block.
Once verified, the bitcoin that was sent shows up in the receiving wallet.
So, for bitcoin, this has proven effective. However, the complexity of the process (for those not familiar with the space) has prohibited mainstream adoption, at least so far. As more and more individuals become familiar with this technology, bitcoin should become increasingly mainstream but, even if it does, individuals wishing to send bitcoin to one another need to do so using the wallet and private key system.
What this means is that both parties must own a bitcoin wallet. There are around 10 million users of the most popular online wallet service right now, Coinbase, meaning around 0.14% of the global population has a bitcoin wallet. This assumes that the number of individuals that own wallets outside of the Coinbase ecosystem is offset by the number of individuals that own one or more online wallets.
Enter Sonocoin.
As mentioned above, Sonocoin is rooted in exactly the same sort of technology that underpins bitcoin. However, there exists a key difference that serves to overcome the just mentioned problem of users wishing to transact in bitcoin each needing to have a bitcoin wallet.
This difference is that each coin can be represented by a digital audio file. In other words, Sonocoin takes the bitcoin concept and adds a layer of conversion to the unit of currency associated with its blockchain that – and here is the key point – allows Sonocoins to be sent and received through a vast number of channels.
With bitcoin, the only way to send coins between users is through the wallet system. With Sonocoin, however, because what you are sending is a digital audio file, the number of transaction pathways available to a user is very large. Think about it this way – any method you can employ to send a digital audio file from one location to another, you can also use to send Sonocoin.
So what are the advantages of this?
Say somebody has purchased a computer from an online retailer and the retailer in question wants to be paid in cryptocurrency. Right now, the most common method of fulfillment for this transaction would be through the buyer sending bitcoin from his or her wallet to that of the online retailer.
That's okay for anybody with a bitcoin wallet or the understanding of how to get one and, then, in turn, the understanding of how to buy and transfer bitcoin from one place to another.
For anybody outside of these categories, however, it's a problem.
Sonocoin solves this problem.
All the buyer needs to do if he or she wants to pay in Sonocoin is to send Sonocoins (at the relevant exchange rate) to the retailer through one of many available transaction methods. This could be via email or through a messenger system. It could be over a social network or even via audio signal.
No wallets are required at either end and, once received, the buyer can exchange Sonocoin for his or her preferred asset type, cryptocurrency or otherwise, across one of the major exchanges in the sector.
As an additional layer of security, the digital audio files that represent the Sonocoins can be password-protected and can also be sent as a raw audio file, a digital file or as included in a media file (or, in other words, as part of another sound file).
So that's the concept.
The point of this piece was to present a trader or investor looking to pick up an exposure to an early-stage, high reward potential altcoin the opportunity to do so. With this in mind, the next obvious question is, where is Sonocoin in terms of development and advance right now?
There are generally three stages that need to be completed before these sorts of coins take off.
The first is development and early implementation/mining. Sonocoin has completed this first stage, with all coins having already been pre-mined to a limit of 100 million Sonocoins. This outside limit negates the potential for inflation long term, regardless of how popular this method of digital audio transaction becomes.
The second is widespread issue, which generally starts with a pre-sale of the coins in question before making said coins available to the general public. Sonocoin is in this stage right now. Users can buy Sonocoins at a predetermined exchange rate with a range of different cryptocurrencies including bitcoin, Litecoin, Dash, Ether and more. For reference, one BTC (bitcoin) will buy 1327 Sonocoins at the current exchange rate.
The third is mainstream launch, a key component of which is getting the coins in question (in this instance, Sonocoins) listed on the major exchanges in the sector. An exchange listing allows the value of coins to be determined by open market forces (i.e., buyers and sellers) and is key to providing liquidity. Once liquidity and an open market price is established, the foundations have been laid for wide-scale adoption.
Sonocoin is already in discussions with a number of the top exchanges in the cryptocurrency space, including Poloniex, OkCoin, BTCChina and Bitstamp, and expects listings before the end of the year.
Many reading might now be familiar with this concept and understand the opportunity in terms of potential mainstream growth of Sonocoin as a currency, but might also be wondering where the return comes from with an exposure at this stage?
That's a good question and, again, it is an aspect of the space that can seem complex at first but isn't all that difficult to grasp with a basic understanding of the fundamentals.
With Sonocoin specifically, the idea is this: buy Sonocoin as part of the current pre-sale and wait for the cryptocurrency to be listed on the major exchanges. In order for people to transact using Sonocoin, they must first buy it over the just mentioned exchanges. The more popular Sonocoin becomes, the more individuals there will be buying Sonocoin over the exchanges and, just as with any other financial asset, an increased buyer demand will lead to an increase in price.
It's really that simple.
The more popular the service becomes as a means of exchange and transaction, the more valuable the tokens that underpin the transactions in question (in this instance, Sonocoin) become. Anybody that buys a number of Sonocoin right now, therefore, is doing so in anticipation of adoption of the method of exchange (with adoption being driven by the above-discussed benefits over more traditional cryptocurrency assets) increasing over time.
It's worth noting that this is far from a risk-free allocation. While cryptocurrency is proving a safe haven for a large portion of the market and while this portion is likely to increase over time as economic uncertainty grows, the truth is that only some of the exposures available in the sector will prove rewarding long-term. For anybody that is looking for a very low-risk allocation to the space, a simple bitcoin buy might be a better option.
With that said, however, for anybody that is willing to take on a little bit more risk in return for what is potentially a lot more reward, a number of altcoins are very attractive right now. Of these, Sonocoin is differentiated in such a way that it stands head and shoulders above most of its peers.