4. Cryptocurrency Investment Best Practices
This article will explain some of the best practices for Cryptocurrency and Blockchain investments
1. White Paper
Read up the white paper of the cryptocurrency you are interested in, look at the development roadmap and vision of the project, there should be a detailed work plan for the next 18-24 months. A product and project that will become successful have a strong, professional business plan both short and long term, since investors generally look at those and decide if the business can be profitable for them to invest their money in.
2. The Team leading the Cryptocurrency Project
The most important consideration of choosing a cryptocurency to invest is know the team leading the Cryptocurrency. You can invest in a crypto coin or project with the best idea in the world but it will fail if the team is not committed or inefficient. A detailed white paper and website will contain information of the team, and a good team will consist of a Decision Committee, R&D department, Marketing Department etc. with strong committed leaders instead of only a handful of staff running the show. Leaders and developers that have a history and resume of finishing their projects with success should obviously be favourably considered, especially if they have experience in blockchain development.
3. A Solution for the Society
Invest in cryptocurrency project or blockchain services that will solve an existing problem or fulfil a gap for the society, since it will be difficult for a crypto project to be popular if there are many existing services (be it crypto or non-crypto) already serving the targeted group of consumers or purposes well.
4. Be Wary of Scam Coins
Always remember that there are many cryptocurrency scams around. One way that helps in ruling out scams, is to research on the founder of the coin. Founders that have successful existing businesses, eg. Tron’s founder Justin Sun owns an app business in Peiwo that is doing well, will less likely create scam coins and risk their existing well-to-do businesses and reputations.
A coin that will become commercially successful needs a good marketing team, put in time to evaluate that. The team’s marketing efforts will reveal their marketing commitments and expertise. Ensure they have strong, positive social media presence: Facebook, LinkedIn, Twitter, Telegram etc and best of all, regular news coverage. Even coins that are superior in technology are not going to be commercially successful without decent marketing strategies. Put more considerations on coins that have a team providing regularly updates on the project progress, instead of one with a silent team.
Coins that have backing or partnership with big organizations eg. American Express, Microsoft, banks etc. are good indicators of a coin with bright future since big organizations will not invest in a project that they do not believe will succeed.
Scalability is one of the key considerations for investors, since that is the toughest challenge most crypto coins and blockchain in the market are facing. Ideally, the cryptocurrency and blockchain that you invest should be sufficiently scalable to support the global population with fast transactions.
8. Growth Potential
Investors look at coins that can grow, rather than on coins that have grown, with stagnant growth or developments with no progress for ages. Invest by buying for the future of a coin, not the present state of a coin.
9. Regular News Search
Regularly visit official website and search (eg. google) for news of your coins, add the social account eg. (twitter, telegram) of the founder or head of the team to follow their development and marketing updates. Be mindful and vigilant while reading news, use common sense to determine if news is fake or real. Search for more than 1 reputated news sites to confirm specific news of interests. If a founder or team leader suddenly turned around 180 degrees and started criticising his own coins asking public to sell it, then it looked very suspicious of an account hack which happened numerous times before. If there is no account hack, the regular comments and updates provided from these leaders are very valuable for investors to understand and know the potential/progress of the coins.