I do not usually dabble in the second tier alt coins.  But once in a while, a project stands out in the pile of rubble.  PIVX is one of them.

PIVX (Private Instant Verification Transaction) is a proof of stake coin with a focus on privacy and distributed community governance.  Comparable projects includes Monero, DASH and Zcash.

Why PIVX?

PIVX has many unique differentiating features including masternodes, instant send, zero-knowledge proof and proof of stake consensus algorithm; all with potential to attract a lot of attention (hype).  It is also still cheap on a comparative basis.

Price

DASH, often compared to PIVX, has a valuation that`s roughly 13 times that of PIVX.  From a technical stand point DASH and PIVX share many similarities including masternodes, instant send, budget funding and a focus on privacy.  Where DASH excel is in its brand recognition within the cryptosphere.

DASH’s higher valuation is derived largely from being the most well known masternode coin.  However, I believe the gap in brand awareness and reach can be easily closed by PIVX if it can gain enough traction to be added on a few notable exchanges like Poloneix.

Especially given how fast crypto trends move, a x13 premium placed on DASH’s valuation is a bit hefty.  So either DASH is overvalued, PIVX is undervalued or maybe a bit of both.

 

Coin Price Market Cap
DASH $165.95 $1,382,237,505
Zcash $178.28 $306,380,261
PIVX $1.69 $90,839,720

 

Decentralized and Distributed Governance

PIVX uses a seesaw balancing reward system to prevent centralization of masternodes.  It does this by adjusting the reward split between masternodes and staking nodes.

As the proportion of masternodes increase, the reward for masternodes decrease while stake mining reward increases.  Conversely, if the proportion of masternode count decreases, reward for masternode increase and staking mining reward decrease.

This periodic adjustment of the reward distribution between masternodes and staking nodes incentivizes masternodes when their count is low and incentivizes staking nodes when masternode count is high.  It is a balancing mechanism built into the code to preventive centralization of masternodes.

Additionally, PIVX’s community designed governance initiative could potentially be a huge hit if done right.  Bitcoin’s scaling debacle has illustrated first hand some of the problems with unstructured governance and centralization of power.  As a result there has been a rise in demand for alternative governance models.  Decred (DCR), a governance coin which has skyrocketed in value in the last 2 months is evidence of that demand.

Though PIVX’s community governance project is still in its planning/discussion phase; the fact that it is taking initiative to redesign it’s governance to be structured, decentralized and distributed is very exciting.

Active Development

PIVX has proven itself to be more than just a project with a white paper.  It has a development team with an ambitious roadmap working on everything from a mobile wallet, multi-sig escrow system to the recently released release of zerocoin protocol which allows transactions to be 100% private.  This should give us some assurance that PIVX is a real project attempting to solve real problems and not a scam coin.

Summary

On a comparative basis, PIVX is one of the cheapest masternode coin with a focus on privacy.  It has differentiating features including proof of stake algorithm, masternodes, zero-proof knowledge, and instant send that could garner a lot of attention if it starts to take off.  Additionally, it’s see-saw reward balancing mechanism and initiative to redesign community governance addresses the problem of centralized power apparent in many crypto currencies including DASH.  And finally its proven that it’s a real project with long-term goals.

I would recommend investing a small portion (5% or less) of your crypto portfolio into PIVX.  Anything under $2 would be a great entry point.  For current holders of DASH and ZCash, PIVX would be a good candidate for an hedge.

With that said, it’s important to remind oneself that PIVX is still a relatively young project that is not without risk.  It wouldn’t surprise me if PIVX were to lose 75% of it’s value, especially if there is a Bitcoin fallout.  However, I am looking for a 300-500% return on this investment and believe the risk to reward profile to be attractive.

Catalyst to look for:

  • PIVX added to Poloniex and other exchanges
  • Announcement of key milestones such as: Zerocoin protocol, PIVX mobile wallet and redesigned community governance to name a few.

Disclosure: I hold and am long on PIVX. I not financial advisor and this article merely expresses my own opinions.