80% of altcoins will fail. Optimum strategy: picking 3 coins. No more. No less.

[JungleEskimo]

there's at least 1000+ blockchain products available, I'm gonna hazard a guess that many are redundant to each other. And some dont even make sense. Dogecoin.

The Pareto Distribution is a pervasive phenomena observed in nature, and it describes the 80/20 rule where 80% of the women have sex with 20% of men. 80% of wealth belongs to 20% of the population. 80% of your results come from 20% of your activities

So my strategy for building a crypto portfolio is to put all my eggs into 3 baskets. My reasoning is if I spread out my investments over 10 different cryptos, 80% of them will fail, and I'm left with 20% of my principal. If I concentrate my investments into 3 highly regarded coins and 2 of them fail (80% of 3 rounded) I'm left with 33% of my principal.

You might say what if all 3 were duds? You're likely to pick 3 duds and be left with nothing, at least when you choose 10 one of them is bound to be the right choice. That's a combinatoric way of looking at things, like pulling out colored marbles from a bag. But cryptocurrencies are volatile and future events might alter the outcome. What you first pulled out as a red marble might change into a green marble. If the marbles change colors randomly the marbles you pick are identical to the marbles in the bag, and you'll always end up with the same distribution of colors. So what I'm trying to say is that I could pick 10 cryptos and all of them have an 80% chance of failing. I could also pick 3 cryptos and all of them have 80% chance of failing.

Why 3? Just because. I like the number 3 because 3 is a good number. I like how curvy the 3 is and I like the way 3 split 80/20 rounds out to a 1/2 split (50% ratio, 33% of principal), whereas 2 split 80/20 rounds out to 0/2 (0% ratio, 0% principal). Going higher than 3 worsens your outcomes, 4 split 80/20 is 1/3 (33% ratio, 25% principal). 5 split 80/20 is 1/4 (25% ratio, 20% principal). And of course 10 split 80/20 is 2/8 (25% ratio). Why do I round? because either a marble is or isn't a color. It can't be one portion red and another portion green. Either it's a 1 or a 0, and the sum of the split numbers must equal the original quantity.

it goes without saying you can improve the odds in your favor by gathering good data and doing thorough research


or am I a crazy person?

[1715033437]

1715033437

[JungleEskimo]

bump

[Thirio]

You are a crazy person. Sure, most altcoins fail but you can still gain for some of them, i'm talking about doing bounties rather than participating in ICOs. I think this is better than participating since you really won't have to use your cash to earn. Therefore, there's low risk of loss. But you don't really know if the bounty you're into would be successful or not, here comes the picking of more than 3 coins enter. If you participate on more bounties, you may possibly outweigh the risk and gain more.

[vermigerous]

Well, that's your opinion. Most people here are risk taker including me, if i'm going to invest on ICO i will pick like 10 coins to hodl risky but surely. on that way i have a good chance to get back my capital.

[JungleEskimo]

picasso was considered crazy, but geniuses are rarely appreciated during their time

now im not sayin' i be a genius, but crazy might be just what we need in these troubling times

[Duzenn]

So I suggest you buy NEO,QTUM,ACT.
These three tokens are the tokens of the underlying technology, so they are worth holding for a long time.

[JungleEskimo]

you need some ICX in there bby

[gbest]

there's at least 1000+ blockchain products available, I'm gonna hazard a guess that many are redundant to each other. And some dont even make sense. Dogecoin.

The Pareto Distribution is a pervasive phenomena observed in nature, and it describes the 80 rule where 80% of the women have sex with 20% of men. 80% of wealth belongs to 20% of the population. 80% of your results come from 20% of your activities

So my strategy for building a crypto profile is to put all my eggs into 3 baskets. My reasoning is if I spread out my investments over 10 different cryptos, 80% of them will fail, and I'm left with 20% of my principal. If I concentrate my investments into 3 highly regarded coins and at 2 of them fail (80% of 3 rounded) I'm left with 33% of my principal.

You might say what if all 3 were duds? You're likely to pick 3 duds and be left with nothing, at least when you choose 10 one of them is bound to be the right choice. That's a combinatorial way of looking at things, like pulling out colored marbles from a bag. But cryptocurrencies are volatile and future events might alter the outcome. What you first pulled out as a red marble might change into a green marble. If the marbles change colors randomly the marbles you pick are identical to the marbles in the bag, and you'll always end up with the same distribution of colors. So what I'm trying to say is that I could pick 10 cryptos and all of them have an 80% of failing. I could also pick 3 cryptos and all of them have 80% of failing.

Why 3? Just because. I like the number 3 because 3 is a good number. I like how curvy the 3 is and I like the way 3 split 80/20 rounds out to a 1/2 split (50% ratio, 33% of principal), whereas 2 split 80/20 rounds out to 0/2 (0% ratio, 0% principal). Going higher than 3 worsens your outcomes, 4 split 80/20 is 1/3 (33% ratio, 25% principal). 5 split 80/20 is 1/4 (25% ratio, 20% principal). And of course 10 split 80/20 is 2/8 (25% ratio). Why do I round? because either a marble is or isn't a color. It can't be one portion red and another portion green. Either it's a 1 or a 0, and the sum of the split numbers must equal the original quantity.

it goes without saying you can improve the odds in your favor by gathering good data and doing thorough research


or am I a crazy person?

You're thinking that the pareto principle applies to crypto and that's a really long shot, remember that 20% of the coins will be almost 500 coins will survive this madness, I don't think this number can be so high. I'm thinking more like a 100 so be careful and DYOR

[JungleEskimo]

the pareto principle would only be applied to your choices. We may very well boil down to less than 100 coins but your choices would be made within that 100. Nobody will hold on to the eliminated coins. Those 100 coins will represent the entire market cap, and whatever random selections you make theres a 20% chance you selected one of the 20 coins that hold 80% of the market cap.

The pareto principal is also a social phenomena. Human beings instinctively behave in a manner that favors pareto distributions. The cryptocurrency industry can be viewed as a living organism thats driven by the emotions of many investors, a superorganism that respirates and grows in response to our confidence and fear. Our dna evolved in alongside the success of the herd mentality, and cryptocurrencies will be an extention of what drives us on a primal level, a new level in the fractal pattern of nature itself. We will naturally rally to form a majority/minority relationship with each other, whether were sitting on opposite ends of trading terminals or villagers in a tribe.

[Herbert2020]

i agree with your idea of sticking to only 3 coins. i have some additional reasons for that such as the fact that it is easier to handle 3 coins instead of handling 50! unfortunately people these days love creating a long list of useless worthless crap and call it "portfolio"! in reality what they are doing is that they are making everything harder on themselves and also increase their risks.

but i disagree with calling it "optimum strategy". in this market based on my experience, the optimum strategy is when you stick to a handful of coins but not for a long time. you go in and run out just as fast. in this strategy you will be trying to enjoy the pumping part of the market and avoid the dumping part of it best way you can and also you will move on to another coin and do the same thing practically maximizing your profit.

[bajindul88]

Depending on the choice of each, in fact many also netted entire altcoin to get some valuable coin. it's not easy but it's a powerful way. we must be smart to choose a good project in accordance with market demand

[JungleEskimo]

i agree with your idea of sticking to only 3 coins. i have some additional reasons for that such as the fact that it is easier to handle 3 coins instead of handling 50! unfortunately people these days love creating a long list of useless worthless crap and call it "portfolio"! in reality what they are doing is that they are making everything harder on themselves and also increase their risks.

but i disagree with calling it "optimum strategy". in this market based on my experience, the optimum strategy is when you stick to a handful of coins but not for a long time. you go in and run out just as fast. in this strategy you will be trying to enjoy the pumping part of the market and avoid the dumping part of it best way you can and also you will move on to another coin and do the same thing practically maximizing your profit.

word.

[Sithara007]

In total, there are around 10,000 altcoins and tokens circulating right now. In the long-term, I don't expect anymore than 1% of them (around 100 currencies) to survive. You can decide on the number of coins to invest. But do your research before doing so, and remember that there is no fail-proof strategy available around.

[mpufatzis]

Your way of thinking isn't crazy. What you are describing is real and it could be applied to the cryptocurrencies as well.
Cryptos follow the same rules (more or less) with currencies and as we know there are about 180 different coins, some of them follow the price of USD but all of them co-exist. The cryptos can coexist too. If digital money will be successful in the future, we will see some thousands of them more but few of them will survive. 3 coins are not enough, If I were you, I would choose 5 to 10 coins.

[CryptoRama]

Experts are saying 93% of coins will fail, but you should still have scattered until they fail, usually if you are looking what is happening to coins, you can predict ups or downs, also you can predict if there will be a shutdown or not... But usually you should choose coins that a legit, not that coin existence is there only for money and nothing more, if you want to have only in XRP, bitcoincash, and lumen, or NEO, just go for it, NEO has a shutdown buttton and others are here only for money... the probabilities of fail, from these currencyes are allmost 100%, if you want I can give you some more examples for only cash streaming and ****ing with people that aren't in crypto world yet... but still, I think you should get more than only 3 cryptocurrencyes... why? There are a lot of interesting values arround, and still coming...

[Robbio]

Even if 80% of altcoins will fail, then there are still 20% of altcoins will be successful. All you need to do now is to choose 3 altcoins that you think it will be successful,yes, this is enough.

[Temik2704]

Why 3? Just because. I like the number 3 because 3 is a good number.

I have nothing to say 

If to speak seriously - 3 is very small amount: the more coins you have, the better your diversification will be. Maybe some coins will be dumped in future, but other coins in your portfolio must compensate that.

[platinov_and]

So, many altocoins often fail, but there are many coins that succeed. But I think that the number is 80% too large, I think this percentage is about 60% - 65%. I believe that you need to store more than three coins in order to succeed and make a profit.

[crampus]

So I suggest you buy NEO,QTUM,ACT.
These three tokens are the tokens of the underlying technology, so they are worth holding for a long time.

I agree with you, I would also add to your list such coins as NEM and Waves - very good coins for a long time.

[JungleEskimo]

If to speak seriously - 3 is very small amount: the more coins you have, the better your diversification will be. Maybe some coins will be dumped in future, but other coins in your portfolio must compensate that.

Frankly, this is peasant mentality. These are not stocks and bonds, diversification will not protect you from the extreme volatility of cryptocurrencies. Unlike investing in stocks and bonds, these coins are in direct competition with each other. These coins want to eat each other alive. It's not like you're buying blue chip stocks to hedge yourself against real estate. The more you spread yourself out, the more exposed you become.

The probability of many coins/tokens succeeding long term is low. You're not diversifying to put yourself in a better position, you're diversifying to cover more numbers on the roulette table. And then you tell yourself the few magical coins/tokens you happen to land on will *HOPEFULLY* compensate for that... nay... they *MUST* compensate for that. That is dangerous thinking. Have you ever been to a roulette table and seen somebody placing small bets on every square? Or to take it to the extreme, you should buy many lottery tickets, and the few winning lottery tickets must compensate for the losing tickets.

You expose yourself to greater risk for a diminishing return that is landing on the lucky golden coin that will blow all the other coins out of the water.

So, many altocoins often fail, but there are many coins that succeed. But I think that the number is 80% too large, I think this percentage is about 60% - 65%. I believe that you need to store more than three coins in order to succeed and make a profit.

where are you pulling those numbers from? Why do you find comfort in quantity over quality? Are you making your choices based on confidence, or doubt? It sounds like you might not confident in your selections or you're thinking emotionally.