Proof of Stake Investment - HBN/PHS/TEK/CAP and more

[StakeHunter]

Bottom line up front: this is about "investing" in altcoins that provide Proof of Stake return.

Everything I invest in provides dividends. I have stocks, mutal funds, bonds, REITs, ETFs, ETNs, CEFs, LMNOPs and more… So when I first jumped into cryptocurrency (Nov 2013), and really learned about the different coins and how they operate I was drawn to the coins with Proof of Stake.

Now coins are A LOT different than stocks, funds and the rest. Unlike a company, coins don't produce anything (besides more coins) - so their value is not based upon their profit (or loss) throughout the year. Coins are by design meant to be currency, a medium of exchange. So their value is determined by their adoption, scarcity, and other magic. Similar to foreign exchange trading, but far riskier, because those currencies have to be used by their countries for some time - they're not going to have a hard fork and suddenly become useless.        

So when I say "investing" I do so with trepidation, because the altcoin scene is a lot like gambling as well. You're hoping the coins get adopted and see wide scale use. Because if they don't you're effectively just trading baseball cards/stamps/or even pre-chewed gum.

The point: Don't invest anything - time or money - that you aren't willing to lose.

I have real money in the game because I believe cryptocurrency will grow. But it isn't my life savings, or a sizable amount because I am just an average man with bills and children that I want to see in college.

What is Proof of Stake?
It is a type of model where the holder of a cryptocoin after a set period of time will receive a Stake - a reward - for holding that coin. Now both the period of time and amount of the stake is variable. For a fairly complete list of coins, periods, and stake percentages, please see my other thread:
Proof of Stake Coin List

Proof of stake started with Peercoin (PPCoin), the first  scrypt adopter was NVC, while the first scrypt-jane adopter was Yacoin. I don't know if there are any quark-algo (or other alternate algo) coins with stake - but that'd be a good idea (hint hint devs) if pulled off right.

Arguments against Stake
Some will argue that the stake model is flawed. There are many arguments, but ponzi scheme and pyramid scheme are thrown around a lot. In my opinion stake is neither of these - offering stake is no different then a coin that offers decreasing returns over time. You're offering early adopters a reward for their work and effort (i.e. holding coins). I will not get into arguments on the matter - I'm just here to talk about what I am doing.  

Why a different thread
I did not want to muddy the other thread with my opinion on the coins - good, bad, and what to invest in. That is what this thread is for. So without further chatter…

When it comes to proof of stake there are a number of coins to choose from. However, I will contend that there are very few to hold on to for their stake. I am not interest in coins with small stake - the market will play havoc with the value, so even if you do get stake you won't likely recoup value in a reasonable time. I'm not interested in coins without devs - without good devs the coin dies. The coin needs to have a community - if no one is interested in the coin then you can't sell it to anyone.

Bearing those things in mind, I would contend that the following coins are possible investments:
Battlecoin (BCX)
50% NVCS (1%), SA 10/20, Coins 4.76, Cryptsy, CMC
Possibility. Fallen a lot recently. Time will tell.  
Cryptocash (CASH)
10% yearly (0.6%), SA 30/90, Coins 2.26, Cryptsy
Possibility. Fallen a lot recently. Time will tell.
Hobonickel (HBN)
100% NVCS (1.9%), SA 10/30, Coins 5.71, Cryptsy, CMC
A major contender. Good devs. Good fluidity. Not as big a community as others.
Mintcoin (MINT)
20% yearly – decreasing every year (1.1%), SA 20/40, Coins 3333, Cryptsy, CMC
Newest coin on the list. Large community. Price is very volatile.
Novacoin (NVC)
100% NVCS (1.3%), SA 30/90, Coins 95, Cryptsy, CMC
The progenitor of the rest of the coins on the list. Good dev. Good fluidity. Largest market cap of the coins on the list.  
Philosopherstones (PHS)
50% yearly (0.7%), SA 5/10, Coins 95, Cryptsy, CMC
A major contender. Devs seem responsive. Not a big community.  
Tekcoin (TEK)
500% NVCS (40%), SA 30/90, Coins 4.76, Cryptsy
Possibility because of its large stake, age and stability. Dev says there are things in work. Little community.
Cachecoin (CACH)
5% yearly (0.1%), SA 7/30, Coins 95, Cryptsy, CMC
Possibility because it is the only script-jane with the best stake/period combo. Time will tell.
 
Diamond (DMD)
On watch. Devs say things are in works. If they release an update that has fixed the stake - and it is a good stake, it can be a contender.
Teslacoin (TES)
On watch. Started well, but there is little activity of late.

Since many coins are descended from Novacoin, many will have a Stake percentage that mirrors it. However, Novacoins percentage is variable depending upon the Stake ready coins on the network. It starts out at 100% yearly and decreases based on the stake difficulty.
100% NVCS = 100% / (StakeDiff ^ 1/4)
Many coins will be listed as X% NVCS, which means that they would yield X% yearly, but difficulty decreases this percentage.

From the above list I have selected 4, and 4 only that I consider a stake investment core.

My criteria: Market Cap, Stake Return, Dev team, Community

My 4 core coins are:
Hobonickels [HBN], Philsopherstone [PHS], Novacoin [NVC], and Tekcoin [TEK]

I believe any stake investor should hold these 4 coins.

Now, the ratio in which you hold them is determined by how much risk you are willing to take. It is the old risk vs. reward profile. A portfolio heavy in TEK and HBN will yield a lot more, but it will have to deal with a lot of price fluctuation and low liquidity. A NVC heavy portfolio will be stable in price and you'll have liquid assets, but your return will be lower.

StakeHunter Portfolios
I offer two possible portfolios for those beginning to dabble in stake. If you only had 1 BTC and wanted to "invest" in coins that provide stake, the following two portfolios would let you do so. One is High Yield and you risk price fluctuation do to coin price. The other is more conservative and it will be more price stable but the yield will be smaller.

StakeHunter Conservative Portfolio - 1BTC/80% yearly/6.7% monthly
Hobonickels - HBN - 0.25 BTC - 0.0148 BTC monthly stake
Novacoin - NVC - 0.5 BTC - 0.0188 BTC monthly stake
Philosopherstone - PHS - 0.1 BTC - 0.0042 BTC monthly stake
Tekcoin - TEK - 0.1 BTC - 0.0289 BTC monthly stake
Other - 0.05 BTC

StakeHunter High Yield Portfolio - 1BTC/131% yearly/11% monthly
Hobonickels - HBN - 0.5 BTC - 0.0296 BTC monthly stake
Novacoin - NVC - 0.1 BTC - 0.0038 BTC monthly stake
Philosopherstone - PHS - 0.1 BTC - 0.0042 BTC monthly stake
Tekcoin - TEK - 0.25 BTC - 0.0722 BTC monthly stake
Other - 0.05 BTC

As you can see, two separate ways to invest can yield two vary different returns. But these are the only ways 1BTC can be split. It all depends upon how much risk you want to assume. And what about the 0.05 BTC Other - that is for new coins and opportunities - for example Growthcoin or Fluttercoin.  

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[Wipeout2097]

Nice post.

What does "50% NVCS (1%), SA 10/20" mean?

[StakeHunter]

Nice post.

What does "50% NVCS (1%), SA 10/20" mean?

My Proof of Stake coin list has a lot more info - https://bitcointalk.org/index.php?topic=458726.0
But I should have it here to make it reader friendly...

Since many coins are descended from Novacoin, many will have a Stake percentage that mirrors it. However, Novacoins percentage is variable depending upon the Stake ready coins on the network. It starts out at 100% yearly and decreases based on the stake difficulty.
100% NVCS = 100% / (StakeDiff ^ 1/4)
Many coins will be listed as X% NVCS, which means that they would yield X% yearly, but difficulty decreases this percentage.

[Wipeout2097]

Thanks!

[megashira1]

Why did you leave out NXT?

[noelmal]

Why did you leave out NXT?

because in crypto investment circles only a nutjob would invest in 100% premine scamcoin.

[galbros]

Thanks for this list and your other thread.  I'm thinking these coins make a lot of sense as a holding.  I just wish there was one with the community of something like doge.  Maybe PPC?

Thanks again!

[tokyoghetto]

Good post. I like the list you have come up with. There is two coins I wish you would have left out, as I am still building up positions on them. It will make my life a bit harder if people start to get wise to the trade, I am prepared to do battle on the orderbook if they want to battle me.

Its hard to maintain a PoS coin so a good dev is important. This is why Hobonickels is one of my larger holdings and the basis for my investment journal. (shameless plug warning) check my sig below.

[kelsey]

Big fan of POS myself. Prefer ones with decent POS rewards (rather then just token POS as a security measure), BCX being my favorite pick as decent reward and active dev with a unique plan for the coin ie could get interesting  

[Buratino]

You have omitted microCoin (POW/POS Combined).

[StakeHunter]

All, please note - these coins are my personal picks. Your picks might be different and all the coins mentioned are on my complete stake list - in the first post.

I will be expanding more upon these coins and how I invest in further posts. However I want to address some comments here...

@megashira1 - I do not want to invest in NXT currently. I personally can't get behind a coin that was distributed as shares. And it's POS model is undisclosed. If I invest X amount - I truly don't know what I will get as a return because it depends upon the use and adoption of NXT.

@galbros - Feel free to invest in PPC - it does have a big market cap. However it violates one of my roles - is Stake is minimal: 1%. I don't want the coin as much as the return that can be converted.

@tokyoghetto - I know...You're like an investing brother - we have similar mindsets. I weighed whether to make this post. But I think its necessary to broaden community awareness of all the coins. Its better to fight over a coin so there are people willing to buy it from you when you want to sell. Plus, we've all (the whole cryptp community bought into this crypto thing - so lets benefit from it.

@kelsey - agreed on BCX. It seems active, and the concept is interesting. I've picked up some to see if it will recover, but it is not a cornerstone.

@Buratino - microCoin is Stake, but it violates another of my rules - its period of stake is toooo long. Its min stake is 1 year. Who knows where crypto and especially microCoin will be in a year...    

[Peacefrog]

I've mined a few tek but its not worth it with my cube. I'm just gonna purchase a bunch instead. The stake rate is really attractive

[EBT]

Don't forget about EBTcoin!

We're up and coming in the stake game!

PoS Reward: 10% - Begins on day 30, mature at day 90

https://bitcointalk.org/index.php?topic=437660.0

[garbagerun]

I'm very interested in POS myself. What are your thoughts on CryptogenicBullion?
My personal top 3 favorite stake coins are:

1. Hobonickels
2. TEKcoin
3. PhilosopherStone

[oaks05]

i know its a real new coin just wanted to know your view on zeitcoin, might be to early to throw a review out there but it does have 25% stake first year and alot of people are mining it right now, obviously getting TZM involved will help the coin alot but i just started getting into the POS coins myself and value peoples opinions.

[garicson]

Growthcoin (GRW)
https://bitcointalk.org/index.php?topic=267019.0
https://bitcointalk.org/index.php?topic=469464.0

GrowthCoin provides monthly interest rate of 5.95%, for stakes that are held during that period of time. This equivalent to an annual interest of 100%. PoS blocks will be generated if the stake are held for more than 5 days (first generation will starts around 9th days). There is a hard limit of 2 billion coins.

now very low difficulty 0.05-0.1 for mining

EXCHANGES
CoinEx
http://www.coinex.pw/trade/grw_btc
BTCLTC
http://www.btcltc.com/home/index/grw_cny (Chinese)

[StakeHunter]

All - again, just being frank.

@EBT - What makes EBT different from CASH - same "profile" and stats basically. CASH is on Cryptsy, seems to have a bigger community, and is on CMC.

And CASH isn't that great either. As I will outline soon, I will not put much money into it - I have mined it, but I have not bought any except for ~.15 BTC. There are more lucrative investments than CASH.

@garbagerun - CGB is a no go. It has a good market cap, but its stake is so small it is none existent, so it is not for me.

@oaks05 - What makes Zeitcoin different from MINT? It smells like a copy and paste - complete with a stake that decreases every year. Yes their may be a tie to the TZM, however it isn't there now. And what about the premine...

And MINT...smells like DOGE - both good and bad to that. I mined MINT in the beginning, but I won't be buying any - it is too volatile. Unless it takes off/becomes stable I will be selling of my stake to buy NVC probably. And once the stake decreases I may not even look at it at all.

@garicson
I should put GRW on my watch list. The problem is, it had a history, it died, and now its back. I have mined GRW and I'm sitting on some to see if the stake is real. It is working on coinex.pw...however like all the coins it suffers from pretty low volume because its community is even smaller than the others.  

[StakeHunter]

Besides rule 1: Don't invest anything - time or money - that you aren't willing to lose.

I should mention 2-6...

2. Have a plan - stick to the plan
You need to outline what your goals are, so you can measure how your investment is performing.
- Do you want to make X BTC a month?
- Do you want to grow your portfolio to Y total BTC?
- What currencies are you going to trade?
- What are your criteria?

3. Don't put all your eggs in one basket
Don't trust just one currency. Especially when investing in high stake coins. The market is very volatile - you'll get tired of hearing me say that. Spread out your investment - have a portfolio - so a shock to one doesn't wreck you. This ONLY applies to stake trading. If you only want to day trade and hold BTC or LTC be my guest - but that is not what I'm about.

4. Be able to cut your loss
If a trade or currency doesn't go your way - cut your loss. Don't get sentimental about a crypto - don't keep it because you like it. THat isn't what this is about. Besides - crypto is a VERY risky market. There is NO guarantee it will recover, so don't "double down" on hopes that it will rise from the dead. It may, but IMO your money is better put into other crypto. 

5. Compound your interest
Read up on compounding interest. The basics are, that you hold some of the stake back so that the next time you take stake you stake some of the previous gains. This allows you to grow your investment faster than selling all your stake every time. Plus it is the coin equivalent to dividend reinvestment in the stock world - you effectively "buy" coin in all markets - when its high and low to average out the cost of the coin. 

6. Take profit
VERY important. We're in this to make a profit right? So if you hold onto all your coin where's the profit? Currently only one coin is truly "spendable." Now I hope that will change, but it is important to lock in some gains in BTC. Why? It helps the market - having volume and liquidity is a good thing. Plus having BTC around allows you tot take advantage of deals in other currency in your portfolio. 

Those are some basic tips. Next time I'll talk about my cornerstone portfolio - BCX/HBN/NVC/PHS/TEK - and why I chose them.

[broken_pixel]

Add Mint.

MintCoin is an innovative, secure and energy efficient PoW/PoS coin. It uses a faster PoW distribution mechanism to distribute the initial coins, then after 5 weeks the coin is basically transferred to a pure PoS coin, where the generation of the coin is mainly through the PoS interests.

MintCoin also adopt a variable PoS rate, which gives the highest payout at 20% the first year, then decrease 5% per year until the 4th year it reaches annual interest rate of 5%, then it will remain at this rate.

Because after 5 weeks it is basically a pure PoS coin, it does not need to be intensively mined, as the PoW payout will remain the minimum. Most coins will be generated through PoS, thus it is a coin that will save a lot of energy compared to other coins.

MintCoin will have a total of 70 billion coins. Initially each block will deliver 100000 to 900000 coins randomly. The PoW payout will be halved each week (7 days). After 5 weeks, the PoW payout will be fixed at 1 coin per block.

PoS will start after at least 20 days of holding of the coins in the wallet. With PoS, the coin is more resilient to 51% attack.

[Jeezy911]

Might want to add Zeitcoin, its very similar to mintcoin and still on week 1 of mining.