If You Are Bent On Investing In Cryptocurrencies, Read This
So, a lot has been written even on this platform, why you should not invest in cryptocurrency. If you decide to invest in cryptocurrency, you are likely to going to invest in one or two of the over 15,000 crypto coins that are available today.
The most popular ones are Bitcoin and Ethereum. However, irrespective of whichever crypto coin you decide to invest in, here are 4 important researches you can do if you insist on taking the plunge.
1. Research The Founding Team: “Look at the founding team of the crypto coin that you are looking to invest in. You can start with their educational background.
“If someone has a PhD in Computer or Math, that will be interesting but really look at what the product they have built in the past.
“This is really an important gauge because it shows you how they are going to trouble-shoot and how they are going to build something that lasts,” said Jeff Kauflin, a cryptocurrency expert.
2. Read The White Paper: This is as important as the first. According to Kauflin, developers will structure a white paper the way academic white papers are structured during their coin offering, and the one thing you really want to look out for is, what problem is this crypto coin set to solve?
“This is because block chain is really in its early days and it is really the technology that underlies this cryptocurrency.
“It is not necessarily easy to build a blockchain or something that works on top of it. And so, right now, they are slow and expensive to build.
“So, if a new coin said it is solving a new problem, what you want to ask is does this really need to be on a blockchain?”
3. Find Out When The Token Was Launched: You see, of all these blockchain projects, they first build a network which is really just a network that a lot of these things are going to happen on top of, almost like a railroad.
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A lot of the time they don’t need a coin. So, if you have a new coin coming out on a blockchain platform that has already been built a while ago, you probably should ask, why are they now introducing a token? They didn’t have one originally, it wasn’t part of their original plan of how this thing was going to operate, so why do they need a token a now?
“Sometimes people say it just for fundraising purpose and if a token is being introduced solely for fundraising purpose, it might not be the best investment. You want to see a token that is going to be introduced that will add real value to the system,” Kauflin added.
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