Fundamental Guides To Research Cryptocurrencies.

The crypto space is gradually getting proliferated with lots of people over time. There will be a need to measure the number of persons joining the space even in split seconds. When I started my adventure in the crypto space, it did it with every sense of enthusiasm as I knew that for once in my life, I genuinely have to get aligned and brace up for a bigger part of life.

A friend of mine had to share some thoughts with me. He began by comparing various innovations which broke the edge even when many didn’t believe. From the medieval times up till now, humanity have never been deprived of a better life. We all wake up to something new and interesting which makes life a lot better. On the contrary, some of these new inventions we wake up to have destructive effect.

In this same vein, the invention of Cryptocurrency has left many in disarray, not hopeful for the prospects it holds for the future while a few who were able to see afar and manage her risk portfolio went in for the dip.

When I started Crypto investment, I made a common mistake. I wasn’t conversant with the space so I did as I was told by some people who were ahead of me. I didn’t read about the coin or token, I didn’t check for its use case, I barely knew what white paper was called, I didn’t know the tokenomics as well, I was just eager to make a lot of profit from the space just as I saw my friends do. I remember throwing in over $5oo into varied projects just to buy and hodl their coin/token. I can’t say for such if those projects will ever do well but I’m very hopeful of some others which I know will do well.

From Coinstat, I have currently researched 142 cryptocurrencies and projects in a bid to learn how to forgo my past experience and brace up for more prospects from the space. I will love to give back to the crypto community by sharing my experience with others. In this article, Ill provide you with a step-by-step guide to teach you how to do your own research and find gems.

Let’s get rolling!

The following was written from discoveries. This may not be total as there will be more in this regard.

SECTION ONE — KNOW THE BASICS OF CRYPTOCURRENCY AND MASTER IT

Hoping into this big space can mean a whole. At first it will be an experience of finding your foots in water. As regards the crypto space, it’s never talked about without referring to the big whales; Bitcoin and Ethereum. One won’t fully comprehend the length and breadth of this space without having information on the above mentioned blockchains.

The Navigation Sage, Right ?

I would suggest you start with reading the original Bitcoin Whitepaper by Satoshi Nakamoto. I also recommend reading the book Mastering Bitcoin by Andreas Antonopoulos. You can skip the programming parts if you are not interested in those. But read everything else to get a basic understanding of Bitcoin and blockchain technology in general.
As a result, you should have a clear understanding of various things such as wallets, addresses, private and public keys, how transactions on the Bitcoin blockchain work, etc. I will advise that being intentional with the knowledge derived from this space should be put into effective use.

PS: IF IT REQUIRES READING UP ON CRYPTO DAILY SO AS TO STAY UPDATED, IT’S WORTH DOING THEN.

After gaining enough knowledge and experience with large-cap cryptocurrencies (also try buying and selling small amounts), you will probably want to explore smaller cap projects. By now there are thousands of different projects and coins in the crypto space.

Scintillating Right ? Let’s move on

SECTION TWO — PAY CLOSE ATTENTION TO THE WHITE PAPER/WEBSITE
For a majority of new or smaller coins in the crypto space, information is not as conveniently accessible as with the big and established platforms. For this reason, it is paramount that you do proper research.
Try these simple checks:

1. How does the project Website look?
· Does the website list important information such as contact address, terms of use, privacy policy, etc.?
· How much content is placed out there and is it up to date?
· Do information on the page look broken?
· Does the site link to external pages citing the project?
· Enter the page in https://www.urlvoid.com/ or similar sites to check its reputation and safety.

2. Make findings on its branch of industry.
You need a clear understanding of what this crypto project is about, the industry it is aiming for, and what issues it tries to solve.
· Is the project aiming for a new or an established market? Is the industry or market growing or do a lot of businesses in that field experience difficulties?
· What do businesses in a given industry do and what are their pain points?
· Does this industry pick up on innovations
· Why and how does introducing blockchain technology help the people and businesses in this industry?

3. Check for It’s Use Case?
Dig deeper and find out why the people behind the project think that what they do will help to solve an existing problem.
· How exactly does the project approach the challenges that the businesses in a field have? Does it make existing processes easier and faster? Does it help save money?
· Which problems does the project try to solve?
· Taking a step back, does it make sense to introduce blockchain technology to solve the specified problems? A crypto project only has chances for success when it is an upgrade to the existing solutions. That’s because, without a significant advantage provided to the user, the currency will likely have difficulty reaching wide adoption.
· Based on the information you gather from points 2 and 3, do a SWOT analysis. What are the strengths, weaknesses, opportunities, and chances when it comes to the cryptocurrency you are researching?

4. What is the actual use of the cryptocurrency or token issued by the people behind the project?
This is very important from the perspective of an investor. A crypto project might have a very good use case.

5. Do more research about the cryptocurrency or token behind a project.
As a potential investor, you should know as much about a token or currency as possible. Here are a few more things to look out for:
· Is it a token or a coin? Does the project build on an existing chain or does it have its own blockchain? For example, many projects issue ERC20 tokens because they are built on the Ethereum blockchain. This ties into aspects such as chain technology and security. Many projects that built their own chains went bust after clever users found a way to exploit certain mechanics.
· What is the total amount of tokens issued, will there be a hard cap to the maximum amount? If the total amount increases over time this can have a negative effect on price. On the other hand, it is a plus when the developers have built a deflationary mechanism (e.g. when tokens get burned after use)
· How many tokens or coins will be held by the company behind a crypto project? You don’t want the team to hold a large amount as their decision to hold or sell will have a large impact on price action.
· Was there a pre-sale or any other action that let a few people accumulate a large amount of the token or coin?

6. What is the consensus algorithm of the chain a crypto project uses?
The consensus algorithm is a vital part when it comes to how decentralized a project is. This way you will know how centralized or decentralized it is. The more decentralized, the better.
Why is this important?
One of the most important use cases of blockchains is that they decentralize certain mechanisms or tasks which otherwise would be done by central servers. Trust in institutions and the participants in a network play a big role in this.
Depending on the algorithm, nodes in a blockchain can be run by several partner companies or a few whales. This means that a few parties have a lot of control over the whole system. For example, they can roll back the transactions on the chain.

7. Make findings of the Team.
Doing research about the team behind a cryptocurrency or project is very important. You only want to invest in something if you know that the team is qualified to handle all the challenges that might come its way.
· A few names plus some titles on the website are not enough. At a minimum, there should be sufficient information about the previous experiences, achievements, and qualifications of each team member.
· Do not be satisfied with just the information provided on the project’s website. Do more research and see if you can look up people’s profiles on platforms such as LinkedIn and Twitter. Check how active people are on these networks, what things they talk about, and so on.
· Reach out to the team and ask them your questions. If they come back to you and provide you with good feedback you will not only gather more useful information but also a feeling of how dedicated they are.

You surely won’t tell me you’re not enjoying this piece. Probably it relates profoundly with your experience too. Let’s take a bigger step!

8. What is the Project’s Road Map?
Road maps help you to understand what a crypto project wants to achieve in a given timeframe. Keep in mind that software projects are often very complex so delays happen frequently.
· Expect things to take some time to materialize if the team wants to start from scratch. Delays of several months are not unusual. However, if developers constantly miss the timing for milestones, it is a bad sign.
· If the timeframe given in the road map is too short, it is probably not realistic.
· Beware that especially when you invest in the very early stages of a project it might take a long time for results to show. If your money is locked up in a smart contract this means you will have to be patient before there is a chance to turn your investment into profit.

9. Check for strategic partners?
Established partners are vital for any crypto project because they help the team to tap into additional resources, get publicity, and learn from their experiences.
Established partners are vital for any crypto project because they help the team to tap into additional resources, get publicity, and learn from their experiences.
· Having many partners is good. But quality is more important than quantity. If a project has established a cooperation with a renowned company, official institution, or research institute, it will get a lot more credibility.
· Because it gives them credibility, crypto projects usually list their cooperation partners on their website. Analyze how cooperation is portrayed. As a rule of thumb, the more detailed the information, the better.
· Don’t be fooled by a few logos. To make sure that the strategic partners mentioned by a projects website are real, do more research. Check for press releases or other external sources that give information about the nature of the cooperation.
Probably you will not be able to find every piece of information listed in this guide for how to research a cryptocurrency.

That's OK, trust we can continue and get more knowledge.

Try to find out as much as you can. As a rule of thumb, the more information a team is willing to publish about its project on their website and in their whitepaper, the more trustworthy it is.

SECTION THREE — ADD OTHER SOURCES
Expand your scope of research away from the information provided by the developers and make use of other sources. These are your next steps:

10. Research a cryptocurrency’s competitor(s).
Are there competitors? Use Google search strings such as crypto [industry] and crypto [market] use case as a starting point.
· If there are any competitors, how are they different from the one you want to invest in? How long have they been active and how far is their development compared to the one you are researching? To give some well-known examples, check out the differences between Ethereum and Ethereum Classic, ZCash and ZCoin (Firo).
· This way, you can find out more about the projects competitive advantage, its weaknesses, as well as other aspects. Maybe this will even help you find other promising projects.

11. Don’t relent, Get more Information.
· Check different sources for all kinds of information you can find. Sources can be news websites, analysts and other businesses. Be creative in digging up information.
· By doing this you will be able to find information the people behind the project probably don’t want you to know about. For example, has the project been hacked before? If yes, how did they deal with it? Did the team show unprofessional behavior such as careless use of funds? Did important members leave the project? Etc.

12. Maximize and Engage the Social Media.
Check whether the project is active on social media and if users are creating content about it. You can learn multiple things from doing so:
· Does the team have its own social media channels to get the news out? Are these channels well maintained?
· Does the team often update their progress in order to keep the community up to date and involved?
· Are there a lot of people talking about it? It is also a healthy sign if there is a lot of engagement not only from the users side but also from the developers.
· What is the general sentiment? Is the community friendly and helpful? Are they only interested in the price of the token or coin? What you want to see here is a positive atmosphere surrounding a crypto project.
· Be aware, though, that people who invest money into a token or cryptocurrency tend to easily get hyped and emotionally attached. In such an environment, people try to get something positive from even bad news. For this reason, it is important that you always take a calm look at things. I CANNOT STRESS THIS POINT ENOUGH!

13. Do they engage Github?.
Not many may know about this site.
Many crypto projects claim to be open source. As a result, they should have posted their code on Github. Check it out. While you probably cannot understand the code, you can still see on the insight page how many contributors there are.
· Are developers contributing regularly to the project?
· When was the last time the project code was updated?
After you are done with these steps you should have gathered a lot of information from different sources that list up the pros and cons of the crypto project you are researching.

SECTION FOUR — RESEARCH ON HOW TO BUY
The fundamentals are looking good. You think you found a potential crypto gem.
Beware
The best crypto project is of no use to you if some of the monetary aspects dont add up. Heres what you should look out for:

14. Find out how and where to buy a projects token or cryptocurrency.
· How can you buy the token or coin? Can you buy them from an exchange or do you have to send money to a contract? In the latter case, there is a risk that your investment might get lost due to technical issues or fraudulent activities.
· For crypto projects with an ICO (initial coin offering), tokens usually have not been listed on an exchange before a certain date. When you invest in those tokens it means your funds will be locked up for a period of time. Are you willing to wait for that long?
· If tokens or coins are listed, you need to find out on which exchanges. If those are very small exchanges, it could mean a higher risk for you, because they are more likely to get hacked or go bankrupt.
· Also due to a low number of users on smaller exchanges, the token or cryptocurrency will probably not be very liquid. This means it could be difficult for you to sell when you want to cash out.

15. How high is the market cap?
It’s pertinent to stress a little on this. Funny enough, some projects usually have big market caps than the total market caps and this isn’t really a good sign. Making more research is ideal.
If the market cap of a coin or token is very small, it means the price can be easily manipulated by the people who accumulated a lot. As a result, various pump and dump schemes may play out.

16. Is the currency supported by software wallets such as Exodus, Coinbase or Bitgo?
This will influence how you can store your coins/ tokens. Usually, only well-established cryptocurrencies are supported by hardware wallets. For smaller projects, you can usually use dedicated wallets or keep your coins in an exchange. Both come with risks so make sure to inform yourself in order to find the best solution.

At this point, I trust that you have found this insightful and quite useful. If you’re a newbie, you surely will be able to avoid the hurdles most people went through and more so, you’d be able to invest wisely after doing a thorough research on the project you wish to invest in. For others who may have been in the space for a long time, this will serve as a simple reminder and guide yet still.
Let me know what you think in the comments and feel free to post any questions.
Cheers.

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