(c) Assets that are a store of value, such as gold, fine art - or your favorite fiat currency.

This criteria also reveals that there are things that pretend to be “assets” when they are not – e.g. lotteries, slot machines, and sports wagering.

So while our family friend remains firmly convinced cryptocurrencies fall into the “pretend” category, I’m equally convinced that they satisfy the basics of a store of value.

But that’s not the end of the case for cryptocurrencies. Not all stores of value are created equal. A fiat currency is a store of value, but precious metals require no blind faith in a government to manage its treasury to retain its value over time. Its fundamental “scarcity” makes it a valuable. But gold has its own drawbacks – for one, you can’t pay for groceries or your rent with it. So in the realm of currencies it is essentially “pick your poison”: Have a store of value that’s actually backed up by something, or have something that’s less a store of value and more transactable. Fiat currencies are considered legal tender but in reality have no tangible value.

In the view of many economists – who have much more experience than I do - Bitcoin and other cryptocurrencies may very well resolve this by presenting the investor with the “best of both worlds”: A store of value that is soon to be more transactable than ever.

But this is an article about my experience trading cryptocurrencies – not an analysis of their merit as an asset class. Getting back to my migration into cryptocurrencies, I discovered that on most of the crypto exchanges I had the benefit of information that was missing from my currency trading. In the FX markets, I had very little data on the actions of other traders in a short time frame. On the crypto exchanges, I enjoyed the ability to view the order book. I have been using the Gemini exchange, which features order flow analysis. (Although in the course of writing this article, I must confess my love for this exchange has waned given their constant shut-downs)

The order book is nothing new to professional investors in the FX world. However, market makers in FX markets tend to hide their order books from retail investors (and for good reason) or charge excessive monthly fees for access to one. This lack of access has been essentially the house edge. This house edge is mitigated for smaller investors in the Cryptocurrency world - as shared access to the live order book is paramount to keeping the unregulated free market as a lucrative alternative investment.

Although a free and open market like that Cryptocurrency market offers immense benefits versus other tradable markets, there are certainly some aspects that could be improved.

One scourge that plagues many deregulated markets is “spoofing.” For the uninitiated, spoofing is the act of placing orders that are meant to influence the market but are never meant to be filled. Bots and Quant Traders alike can and will influence the order book with these fake orders which can lead to investors making important trading decisions based on false information. Exchanges like Coinbase and Gemini need to address this. Also, the seemingly frequent flash crashes (Coinbase) and shut-downs for days due to security or software upgrades (Gemini) can be enormously frustrating.

Furthermore, as cryptocurrencies are a new asset class, with fundamentals that are based on new technological concepts, these markets will be subject to occasional “growing pains.” The “hard fork” in Bitcoin on August 1 may have kept many prospective investors away due to the fear of a massive devaluation of the currency if it was to split into two different assets. However, these investors who were kept away due to their fear would have missed out on a 63% increase in the price of Bitcoin after the hard fork (as of August 28th).