(and what does a not-so-juicy crypto look like)
95.7% OF ALL CRYPTO PROJECTS ARE GARBAGE AND WILL ULTIMATELY PROVE POOR INVESTMENTS.
(Where did we pull that accurate piece of data from you may ask, the same place banks print trillions of fiat currency, Nobody knows! All that matters is, it’s a lot)
Allow us to clarify, we say this is for a number of reasons;
Most projects in this space have just gotten very excited with Cryptocurrency’s as a technology, more specifically blockchain technology and DLT (distributed ledger technology) (Please see jargon explanation at the bottom of the page) It has spawned a multitude of companies/founders/developers to go on a developing spree, making all sorts of iterations to the technologies, which may prove to be very useful at some point but that is a big IF. Most of them are missing a fundamental ingredient in the recipe, they’re focus is building cool technology rather than SOLVING ACTUAL PROBLEMS.
Another chunk of projects within the Crypto space are simply ‘Opportunist’, or as most of us call them, CRIMINALS, these are the types of people/groups that will cleverly package a project as if it were legit with no intention to actually follow through, they will fake it until they’ve acquired your money through appearing to be a LUCRATIVE investment in various ways. Methods that will include faking volume/wash trading, ICO’s, marketing campaigns and paying influencers.
Lastly (for this post), there are projects which simply weren’t/aren’t good enough, this could be because they were competing with another project within the same field, or the team lacked experience (more on this later) or lacked funding. Overall, they came to the fight and lost, in tech, most of the time only the best survive, the rest die a boring death.
The good thing if you’re investing now is, which as of writing is May 2019, the current BEAR market/ Crypto winter, whatever term we use, has exposed and REMOVED many projects. Many criminals, to be perfectly honest, have taken their stealings and left, others have been caught and kicked out. Legitimate projects as mentioned earlier have lost out to better competition and some have run out of funding and have had to go back to their 9-5 job.
As you can see, it can be quite daunting to keep your investment from being robbed, let alone select a good project with relatively low risk and juicy rewards. We hope to make this easier with the below, we started with the bad stuff as it is important to know what NOT to do before you know what you SHOULD do.
What a juicy project has;
First tip – Team – Experience
The team assembled by said project is as a whole packed with experience not only in founding companies or projects but also team members that have worked for reputable companies such as your googles, facebooks and Amazon’s. Furthermore, they actually hold good roles at those companies, the water boy who worked at facebook is kind of cheating this criteria. A good project will have a credible CEO with a strong background, credible developers and senior members of staff with updated linkedIn accounts (and yes, we know it sounds like we’re sieving through CV’s, it basically is)
Second tip– Liquidity – Trading volume
A very important indicator of a good project is legitimate and consistent trading volume, it is within the powers of the criminals to fake volume, however, it is more difficult to fake volume with more recognized exchanges such as Binance as they have more stricter rules. Beware though, the smaller the project, the easier it becomes to fake volume, hence why, the more you look outside the top 10, the riskier the investment becomes.
Third tip– Social media – Presence
Now, this part is vital, however, it can be achieved in 2 main ways, some projects will provide live commentary on a frequent basis, sometimes even daily. Whereas others will provide monthly updates on whatever upgrades they’ve completed or are working on, furthermore these updates need to have a lengthy trail in terms of history. The longer the trail, the more credible it is, as a company that has a longer history is pretty much established and has always made it a priority to keep their followers informed
Fourth tip – Community – Following
Although the size of the community is important, we don’t believe it to be absolutely essential, however it is a good indicator if a project has a large following on all social media platforms, it is most important if it is an active community. The reason why an active community is more important than a large number of followers is that it is very easy for projects to gain ‘Fake followers’ which are mostly automated bot accounts, and thus disguising as a credible project. However it is quite difficult to fake an active community, which can be seen by the amount of engagements in twitter posts with comments and likes . The most popular social media platforms in Crypto are; Twitter, Instagram, Telegram, Github.
Fifth tip – Is it solving a problem?
Arguably the most valid question that needs to be answered by the company, is it actually solving a problem in this world, rather than simply being a new technology with no problem to solve. This is where many Crypto’s fundamentally fail, only a select few can say they are truly solving a problem and are therefore being used by real companies i.e they have paying customers. The most notable example of a crypto currency solving a real world problem are Ripple with their crypto ‘XRP’, although a controversial crypto due to the tribalist nature of the crypto community as a whole, it is actually solving the expensive and inefficient issue of cross border payment within the financial industry, they have over 200 financial institutions signed up to their network and many production contracts, not many crypto projects can say they even have customers, let alone over 200.
To conclude, all these tips should help navigate your way into finding trustworthy projects that will help grow anyone’s investment portfolio, however, be aware that with any investment, there is no such thing as certainty, all the above tips help improve the probability of success but they do not guarantee it. Anyone that says otherwise is most likely bending the truth or even worse, telling downright lies.
Distributed ledger technology– more commonly known as [DLT], this is where the information on a ledger is distributed between the participants of a network, all participants have the same copy of the ledger, also there is no central data store. I.e there is no one data center that stores all the information making it very difficult to attack, and it means there are not varying versions of the ledger, all participants have the SAME copy.
Blockchain technology – Simplified, it is where consecutive transactions (e.g sending someone some bitcoin) accumulate and fill up a block (could be 1mb worth of transaction), once this block is filled, a new block starts to be filled, the two blocks are connected by a chain, as more blocks are filled and connected to the chain, the order of the blocks are recorded. Every time a new transaction is recorded, i is verified by all the participants in the network, there is no need for a central authority to authorise. To go into more detail about Blockchain would be counter-productive to the newbie trader.
Initial Coin Offering – Commonly known as ‘ICO’ – This is very similar to an IPO (initial public offering), where it is a method for a company to raise capital (money) by selling a percentage of it’s shares to public/private investors, however with ICO’s, it is not shares of the company that is sold, they are selling the tokens they have produced.
Liquidity – The level to which the crypto currency can be bought or sold at the price closest to it’s real value, it can also be desribed as how easy it is to convert it to cash