From the Ukraine conflict to countries working to adopt Bitcoin as a legal tender, more investors are now flocking to cryptocurrencies – so much that the market reached an impressive volume of $2.21 trillion at the end of 2021.
With the space moving at an incredible pace, you would need to burn the midnight oil to stay on top of all the latest trends, participate in relevant Discord talks, and read all the newly published whitepapers. But while you still need to do your own research, as a crypto investor and founder of a blockchain-based company, I’ve compiled some lessons that could help you out.
Do your due diligence
Do you recall when, in 2018, Pincoin’s founders made $660 million worth of investors’ money disappear? The crypto world isn’t without its problems, which is why you need to take your time to interact with the team behind each project and learn about their background and expertise.
First, analyze their social media. Have they successfully raised funds before? Is there any negative coverage? Second, look at how they communicate. Are they in touch with their community on Twitter/Discord? And how far have they executed, according to their roadmap?
Subsequently, evaluate the project’s vision, purpose, and how the token is used. What is the value proposition? Because if it’s just to be a lousy copy of Ethereum that doesn’t solve its existing problems, don’t waste your time.
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Look at the “D-S-S”
Always keep these factors in mind to assess the long-term viability of a project:
Decentralization: Crypto is all about no regulation and control. If a project has an entity or a group of people with too much ownership over the token, the power could be abused – a red flag for investors.
Scalability: Look at coins that have the ability to scale and handle more transactions per second over time. If Ethereum can only process 15 transactions per second, and for Solana, it’s 65,000, you know which token might be a smarter investment. Another useful metric is the number and profiles of developers building on the token’s chain.
Security: If the security structures of a coin are poor, it could be vulnerable to attacks or “double spending”, defeating the purpose of trusting the network. So, make sure to read up on security protocols before investing.
Most top coins have the same purpose – to be a medium of exchange. So, always keep an eye on context, too – it’s the community and trust in the coin that will help a project stand out. To me, Kadena has been one of the coins that ticks all the boxes.
From Tezos to Solana, it’s obvious that coins that aim to overcome the limitations of Bitcoin and Ethereum will have a bright future – if they manage to marry scalability and speed. It wouldn’t be surprising if, over time, the majority of investors bet on new coins to seek bigger gains and more potential in the long run.