Prism-based crypto investing

In a previous article, I noted some initial thoughts about the currently-in-beta, smart-contracts-based Prism investing platform. In this article, I’m going to discuss some of the ideas that are forming around how I will use it when it’s launched.

While crypocurrency is broadly considered an emerging asset class on its own, I like to further consider use-case based sub-classes, for example:

  • Value
  • Utility
  • Privacy
  • Distributed Exchanges
  • Prediction Markets

With Prism, investors will be able to conveniently implement use-case or sub-class-based investment strategies. For example, I might define:

  • Value — Bitcoin (60%), Bitcoin Cash (20%), and Litecoin (20%)
  • Utility — Ethereum (60%), Ethereum Classic (20%), and Stellar (20%)
  • Privacy — Dash (30%), Monero (30%), Zcash (30%) and Pivx (10%)
  • Distributed Exchanges — EOS (40%) and 0x (60%)
  • Prediction Markets — Augur (50%) and Gnosis (50%)

So rather than trying to predict the individual winners in these use-case categories, I could instead create and invest in diversified “Prisms” built around each, leaving me only with the task of identifying the most promising technologies/protocols in each class, regardless of how many there are, and allocating according to the success probabilities I would assign to the constituents.

And at the highest level, I would fund these categories in proportion to the relative values I assign those use cases long-term. For example:

  • Value — 40%
  • Utility — 40%
  • Privacy — 10%
  • Distributed Exchanges — 5%
  • Prediction Markets — 5%

Acquiring and holding all of these currencies would be quite inconvenient, and possibly insecure, but implementing the above strategy could be done in a few clicks and half an hour on the Prism platform!

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