One very obvious feature of this bull market is that many currencies listed on exchanges no longer follow the overall market.

There are very few currencies that can confidently say: If Bitcoin goes up, we will definitely go up too; as long as Bitcoin doesn’t go down, we will definitely not go down much either. Those large-cap currencies that have the ability to follow Bitcoin’s rise, the old “blue chip” coins, sometimes seem to be unable to outperform Bitcoin itself.

In the last bull market, anything you buy will go up, it's just a matter of time. Buy the top 50 coins by market value with your eyes closed, and when Bitcoin doubles, it will be no problem for these coins to triple or quintuple on average. At that time, if someone said they were all in on Bitcoin, I would laugh at them, saying that it would be better to buy XX coins than Bitcoin, which can double at worst, and ten times if you're lucky, and your Bitcoin can only double at best.

This round is different. When others buy Bitcoin, I admire them. They are smart people. Bitcoin is a sure win! Other altcoins can really go back to zero.

Some say it is not the right time, others say the environment has completely changed. More and more so-called "rotational sectors" have stopped moving or even moved in the opposite direction. It can be said that this is a kind of value decoupling between altcoins and Bitcoin.

I have discussed this phenomenon with many friends. Is it because VC coins are being cut too fast? Is it because there are too many new coins? Is it because the coin speculators have been replaced by institutions? Is it because they have become accustomed to not accepting each other's orders? Is it because the institutions and exchanges are too arrogant? Is it because the old coins really have no innovation? Is it because the old investors have learned to speculate in new ones instead of old ones? Or is it because there is really not much incremental funds? ...

Each statement has its reason. Of course, these are interpretations put forward in the context of the failure of altcoins to take off - there is no bad news in the world. When a coin falls, the phenomenon behind it becomes bad news.

So, while thinking about why the altcoins in my hands fell, I was also constantly thinking about what kind of coins are likely to follow the market, not lag behind when rising, and not directly return to zero when falling. To be honest, it is quite difficult to find. Maybe the recognized ETH and SOL are on the top, or BNB. However, someone told me that SOL is going to flip ETH, and someone else said that SOL is a meme bubble, and someone else said that BN might explode in the future... Hey brother, I just want to take a ride in the bull market, and get a coin that will not return to zero, can rise with the market, and is expected to outperform Bitcoin.

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Coincidentally, there is an interesting new track this year - colored coins (ARC-20 token standard), which seems to enable us to find "reliable altcoins" to a certain extent.

What is a colored coin? As the name suggests, a normal Bitcoin can be "colored" to become a colored coin. To be more specific, it means taking out some Bitcoins and labeling them as other new tokens.

What are the benefits of this? If Bitcoin rises, the "intrinsic value" of this asset will rise accordingly; if Bitcoin falls, although the intrinsic "bottom line value" falls, it does not necessarily mean that the overall value of the token will fall, after all, it is still an independent token.

This involves the value design of a token. The relative proportion of its initial market value (what percentage of Bitcoin it contains) and its added value determines its risk preference. Some tokens have very low BTC content, but because they are representative, meaningful or have other additional attributes, their prices can be almost far away from the "dyed body" value; some tokens have extremely high BTC content, so that people buy them basically out of a "financial management" mentality, investing in BTC in another way; and some tokens have relatively average body value and added value. Such tokens can also show a certain degree of resilience. They are not completely safe, but they also have more room.

The initial design of a colored coin with satoshis does not completely limit the future development path of the token. Some tokens are high-risk at first, but over time, with changes in narrative, community, and the heat of the environment, "safety" gradually emerges; some tokens are very safe at first, and with the development of personalized narratives, their value has been greatly improved. At this time, "safety" no longer needs to be a continuous narrative, but becomes a large-scale risk token that has said goodbye to the bottom and opened the ceiling. Low-risk tokens are not necessarily always low-risk tokens (the more they rise, the stronger the volatility will be, and the natural room for growth will also be opened), and high-risk tokens are not necessarily always high-risk tokens (the more they fall, the weaker the volatility will be, and the bottom-line guarantee will become more obvious).

Here, you can choose a coin that is highly tied to the market (there is also a small probability that it will significantly outperform the market), or a coin that is only somewhat correlated with the market, or a low-correlation, mediocre copycat. The risk appetite is determined by you, and the potential narrative space is determined by the token community or project party. Please note that there is no longer a "return to zero" in this world. The end of failure is "return to Satoshi", that is, returning to the original body of Bitcoin. This behavior has nothing to do with liquidity or buying and selling orders. Any colored coin can be directly used and consumed as Bitcoin.

These are interpretations from the perspective of personal investment. In fact, we can also look at another major feature of colored coins from the perspective of project parties and VCs - no air coins are allowed! All colored coins must implement the principle of "one coin, one satoshi". If a project party wants to issue 10 billion tokens, it must use 100 bitcoins as the colored entity (each containing 100 million satoshis as the basic unit). The project party personally pays out the cost guarantee for users, makes an initial value bundle with bitcoin, and then strives to create a premium for these 100 bitcoins through the true value of the project itself. I think this is a currency issuance model that is sufficient for "web3".

There are still very few colored coins on the market today. If you want to screen coins with different risk preferences, there may not be many choices for the time being. If you want to distinguish different communities or different project parties, there are not many similar items for comparison. However, there are also advantages to being few. If it is early enough, it is easy to choose. Maybe you don’t need to see the narrative of a bunch of tokens. You just need to believe that "colored coins" themselves will become the next mainstream, then the objects worthy of your attention are very clear.

As a person in the cryptocurrency world, you should not not believe in Bitcoin. Then as a person who believes in Bitcoin, you can indirectly invest in a highly volatile Bitcoin in the form of colored coins according to your "degree of belief". In my old words, welcome to the new cryptocurrency world on Bitcoin.

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Colored coins are an old concept that appeared more than a decade ago. It is only now that they have been implemented in the form of the ARC-20 token standard. As we all know, innovation on the Bitcoin chain is a very slow and long road. Many people don’t know that before Vitalik Buterin started Ethereum, he was an important contributor to the conceptualization of Bitcoin colored coins. (Thanks to @shak0sama for telling us this interesting history)

This is a track that has been highly anticipated, and perhaps the only way for the Bitcoin ecosystem to prosper. It appeared too suddenly, and many people may not have realized its value. If one day Bitcoin has a huge token ecosystem, then colored coins will definitely occupy an important position in it.

I believe that starting from this bull market, colored coins will slowly become a type of asset recognized by the public. After all, people are fed up with air coins.

ARC20 is truly a historic new track.

#Atomicals #arc20 #比特币生态 #染色币 #Quark