So with so many options to invest in, how to know which of these coins will give you the best returns, if any? For those of us who aren't coders who understanding the underlying workings of these different projects, how are we to know where we can put our money in a promising team working on an efficient technological advancement?
The process for deciding on your company to back can be daunting understandably. A lot of these companies have gone through extensive lengths to try and fool the eye and make it seem like their product holds some value to the future of the blockchain when really it is just an overly worded scam to illicit funds from the eager.
For me, I got tired of the confusion and came up with a set of guidelines I follow to ascertain whether I make a position in a coin or not. If the company doesn't pass my test then I will not invest.
While these steps I take are far from all that should be done before throwing your life savings at it and hoping for a fortune having these things understood will make the final decision much easier once you get there.
So the first question I like to ask before considering giving my money:
Is this Even Innovative?
What you will notice is that a lot of these companies like to use extravagant wording to confuse and make their mission seem more important than it actually is. Or that will just simply add 'Put it on the Blockchain' and suddenly it seems like a necessary innovation when really it was performing perfectly fine off of the blockchain.
I have a general rule of only investing long term in coins that are working on a technology not widely in use today that, with blockchain technology, can vastly change the experience of our day to day lives. To put it as simply as possible, the growth in companies working on a technology with unrealized use-cases is exponential.
So if the projects goal is to simply take something we already do and task that on to the blockchain I am much less interested. I would like to add that this is just my own personal rule as I want the long shots. Not all projects that are based in technologies we already widely use are deemed to flop actually a lot of them will do very well.
Industries like healthcare, manufacturing, retail, banking and many more will see a wide range of benefits within blockchain technology. The warrant research and investments and I do not suggest ignoring them. Just realize that the growth potential for the amount of research necessary may not be as great for a technology that is relatively unknown and misunderstood by many. ROI of time is much better with the future techs.
Which brings me to my next point of how to discern amongst this many projects yet which to lend your funds to.
Research the White Paper
Now I'll be honest with you all. I am far from a tech guy. I know my way around simple HTML but to sit here and act like I understand any of the coding or techy language that goes in to this stuff is beyond me. This doesn't mean you have to blindly invest in something you don't fully understand. The internet is an amazing tool with plenty of cross-referencing resources. Multiple people have done the research and dug it up for you.
Give the white paper an overlook to have a general idea of what is going on but spend your time researching the validity of what is being said by people who KNOW THE LANGUAGE.
The bulk of our research comes from cross-referencing others and streaming together a conclusion from that. Just like how you shouldn't trust the opinion of one doctor you shouldn't trust the opinion of one random person on the internet. Contrarily if you are coming across the same opinion from different sources then maybe it warrants a bit more of an ear.
Who is Behind it and Why?
Partnership allegations run rampant in this space. Coins will say that have this big partnership with some big shot company like Microsoft, or advisors from the company lending a helping hand in development when all it really was is some paid advertisement or a phone call with an executive explaining their business model.
In a lot cases none of these partnerships aren't set in stone and are mainly these big companies way of being involved in the space without it taking up too much of their day to day business. They don't yet know what is great in crypto, but they are willing to give these companies a listen even if it will cost them some scratch.
So how to know when these partnerships are legit?
Well I like to look at the team of people and their background. In a lot of these projects there are people with reputable backgrounds working together with other people of equally reputable backgrounds. This isn't alone a telltale sign that you've got a winner as it is very possible that a group of these nerds got together and decided that they wanted to try and scam the blind out of their savings. Not only that their names could be lended simply because they were in a room when a conversation was happening.
When researching the team make sure their position is relevant to the project's goal and not simply tied to a big name company or that they are actually active in the product's development and implementation. Which leads me to my last point:
What/When is the Product
It is easy for a company to say that they have a mission and all of these companies are not shy about telling you just that. Them saying that this is what they want to do with blockchain technology is not enough.
Are there visible steps being taken by the development team to get a product on the ground? Is the github active? Is there an updated roadmap and are there adhering to it? If not are they updating the telegram on delays? When will the public see the product in use and exactly what will it do?
It is very easy to throw around big tech words that the common person doesn't understand especially in this space as the more obscure sounding tends to seem like the more innovative choice; which is far from the truth. Getting down to the nitty-gritty of questions like these can help quiet the noise.
If you can't get straightforward answers from the company's representatives on these answers then it is probably a good sign that you shouldn't trust them with your money. This place is too full of scams for people not to be straightforward with what is going on behind doors. I do understand that this space is competitive and some things are kept secret for the edge. Nonetheless this general questions still warrant a thorough response.
As stated before these are just the first steps you can take to help streamline the process of making a decision much easier when it comes to deciding which of these companies to give your money to. Always keep in mind that this space is vast. There will be many players in the end even within a certain field. Just because a company is leading today doesn't mean they will be in the future and vice versa.
Also, things can happen to this companies there are well out of our view. They could have a promising team and product and still flop. Or they could have no visible signs no and be the true winner. Though the latter is rather doubtful industries will behave in mysterious ways.
This space is reserved for the risk takers. Please invest responsibly.
If you are interested in my personal picks find me on Twitter/IG: @ogsaff
It's always tricky, thanks for trying to educate folks about the Crypto culture