I don’t want to spend too much time on the Qortal project. However, I need to mention that it was designed to be much more than simply another crypto currency. Yes, the Qort coin did come into existence and yes, the developers did create a way to trade that coin with other currencies. But from the very beginning, their intent was to create a platform that was secure, private and reliable – one that anybody could access.
Some explanation may help
Qortal is also 100% decentralized. This implies several things. For one, it cannot be taken over by a single entity, whether a person, a government or a corporation. Second, it has no choke point or bottleneck. Third, once it reaches critical mass, it will be self-regulated – that is, only by its members. The higher their level of involvement in Qortal, the more voting power they will have. That is to say, my voting level increases with each block that my computer node builds on the block chain.
Because Qortal is decentralized, Qort coins cannot be purchased for fiat currency on any existing currency exchange. However, Qort coins CAN be traded for other coins, including Litecoin (LTC) and Dogecoin (DOGE). These can then be converted into one of any numerous fiat currencies, including the U.S. dollar.
What I discovered
As soon as I installed the Qortal core (the “engine” that runs in the background), my Raspberry Pi started working with other small computers like mine to mint Qort coins. At first, I was minting for my sponsor. (Everyone in Qortal has to be sponsored and must build enough blocks to move up to Level 1.) In June of 2021, I reached Level 1 and was able to start minting for my own account.
As my account started to grow, I watched what was happening to the value of Qort in the trade portal. I used the value of LTC as a reference point. When I started watching events, a Qort would trade at 0.002 of an LTC. That is, a Qort was worth 2/10ths of one percent of a single Litecoin. When Litecoin was valued at $172 in U.S. dollars for example, one Qort was worth about $0.35 or 35 cents. Fairly rapidly, the trading value of Qort climbed from 0.002 to 0.003 and then to 0.004. Did you notice what just happened to the value of Qort. It doubled! That’s right, in the move from 0.002 to 0.004 the value increased by 100%.
Time to put some “skin in the game”
Understand that while this was going on, the “purchase power” of my U.S. dollars was dropping due to inflation. (Thanks to the liberal politicians in Washington and of course, the Federal Reserve) By any honest measure of value, the dollars I held in December of 2021 could now buy only 93% of what they had in January of 2021. At the very least, they had lost 6% of their value – and if we could get honest figures from our government, the real loss was certainly greater than 6%.
Also, during this time, I was monitoring the stock market. While it had a fairly bullish run in 2021, it was nowhere near the 100% return I had just seen in Qort value. Worse, all indications were that it was about to take a tumble – and did. So, I made the obvious decision. I moved some stock investments to a crypto exchange, used the funds to buy LTC and then traded the LTC for Qort. Remember, at the time, a little bit of LTC could purchase a lot of Qort coins. Sure enough, in less than 6 weeks, my Qort holdings doubled in value.
Lesson number ONE
I had always feared the erratic volatility of crypto. The wild swings in price made no sense to me. However, I had just learned a lesson. While that volatility certainly applied to mature crypto currencies, it did not really apply to emerging coins. Put another way, if the value of a new coin is essentially zero, where can the value go except up?
The problem with most “buy and hold” strategies is timing. That is, when do you sell your holding to maximize profit? It is highly speculative. This is far less of an issue with a new coin that will likely double in value many times before the trading price peaks.
Lesson number TWO
On the heels of this lesson, I learned something else – actually, a couple things. First, I discovered that more than 80% of all crypto currency trades are not made by humans. What does this mean? It means that computers are placing the trades. The obvious question is why? This leads to the second “a ha” moment I had. I discovered that computer programs have been created to take advantage of trading volatility. You mean that the very volatility I had feared could actually be a good thing? Yep!!
It turns out that computers are completely dispassionate when it comes to trading. They don’t have any worries or concerns about what might happen tomorrow or even later today. They just do what they are told to do. They also do it 24 hours a day. They don’t sleep or take time off to play. Also, they never make irrational decisions based on feelings or emotions.
Dollar cost averaging on steroids
One strategy commonly used to take advantage of volatility is dollar cost averaging. When the price of a currency drops (by a predetermined amount, say 1%) the computer buys more currency at the lower price. When the price increases by an equivalent amount, the computer sells a share of the currency. It then pockets the difference. Yes, it is generally a small amount but the computer program has just put money into your account.
Here’s the thing: It can do this hundreds of times a day if the currency is going sideways. So, even though the currency value is not rising or falling dramatically, the computer is taking advantage of small fluctuations in price. And THAT my friend, is why more trades are placed by computers than by humans.
You now know more than most people who buy crypto currency and play the losing game of trying to “time the market.”