For someone first starting out as a cryptocurrency investor, finding a trustworthy manual for screening a cryptocurrency’s merits is nonexistent as we are still in the early, Wild West days of the cryptocurrency market. One would need to become deeply familiar with the inner workings of blockchain to be able to perform the bare minimum due diligence.

One might believe, over time, that finding the perfect cryptocurrency may be nothing short of futile. If a cryptocurrency purports infinite scalability, then it is probably either lightweight with limited features or it is highly centralized among a limited number of nodes that perform consensus services especially Proof of Stake or Delegated Proof of Stake. Similarly, a cryptocurrency that purports comprehensive privacy may have technical obstacles to overcome if it aims to expand its applications such as in smart contracts. The bottom line is that it is extremely difficult for a cryptocurrency to have all important features jam-packed into itself.

The cryptocurrency space is stuck in the era of the “dial-up internet” in a manner of speaking. Currently blockchain can’t scale – not without certain tradeoffs – and it hasn’t fully resolved certain intractable issues such as user-unfriendly long addresses and how the blockchain size is forever increasing to name two.

In other words, we haven’t found the ultimate cryptocurrency. That is, we haven’t found the mystical unicorn cryptocurrency that ushers the era of decentralization while eschewing all the limitations of traditional blockchain systems.

“But wait – what about Ethereum once it implements sharding?”

“Wouldn’t IOTA be able to scale infinitely with smart contracts through its Qubic offering?”

“Isn’t Dash capable of having privacy, smart contracts, and instantaneous transactions?”

Those thoughts and comments may come from cryptocurrency investors who have done their research. It is natural for the informed investors to invest in projects that are believed to bring cutting edge technological transformation to blockchain. Sooner or later, the sinking realization will hit that any variation of the current blockchain technology will always likely have certain limitations.

Let us pretend that there indeed exists a unicorn cryptocurrency somewhere that may or may not be here yet. What would it look like, exactly? Let us set the 5 criteria of the unicorn cryptocurrency:

Unicorn Criteria

(1) Perfectly solves the blockchain trilemma:

o Infinite scalability

o Full security

o Full decentralization

(2) Zero or minimal transaction fee

(3) Full privacy

(4) Full smart contract capabilities

(5) Fair distribution and fair governance

For each of the above 5 criteria, there would not be any middle ground. For example, a cryptocurrency with just an in-protocol mixer would not be considered as having full privacy. As another example, an Initial Coin Offering (ICO) may possibly violate criterion (5) since with an ICO the distribution and governance are often heavily favored towards an oligarchy – this in turn would defy the spirit of decentralization that Bitcoin was found on.

There is no cryptocurrency currently that fits the above profile of the unicorn cryptocurrency. Let us examine an arbitrary list of highly hyped cryptocurrencies that meet the above list at least partially. The following list is by no means comprehensive but may be a sufficient sampling of various blockchain implementations: