Image courtesy of Pixabay Obligatory Disclaimer: I am NOT a financial advisor, and none of this advice should be taken without speaking to a qualified professional first. Further, do NOT invest more than you’re willing to lose, and do your own research first. If you’re new the cryptocurrency space, odds are you’re overwhelmed with all the new information. If you’ve done any sort of research, you’ll have realized that there are plenty of other tokens in which to invest, other than Bitcoin, Etherem, and Litecoin. After all the new blood rushes into the “big three” clogging all their networks, the hunt will be on for “the next Bitcoin.” But how do you go about determining what makes a good token? There are tons of scamcoins just waiting to take advantage of you, so it’s important to do plenty of research before you invest. Below are four good steps you can take to figure whether or not you should invest in a token. ( : before you get started, it’s important to know how to actually invest in tokens. You can , my , or you can set up an account on an exchange, .) Note check out a guide I wrote here toolbox on terminology and resources here like Binance Look up your token on CoinMarketCap CoinMarketCap is almost always my first stop when I hear about a token I may be interested in. The first thing I do is take a glance at the chart to see if there has been a “hockey stick” spike yet. If there has, I’m much less likely to invest unless steps 2–4 convince me there is just as much growth to come. Next, I look at things like USD price and BTC price volatility (because there’s a big difference between the two), and I look at the token’s total supply. Generally speaking, I like to invest in tokens that have a supply of 500 million or less. I’m extremely attracted to tokens that have less than 10 million total supply. In my opinion, these tokens have more of a chance to be influenced by supply and demand as they grow in popularity. 2. Read the token’s whitepaper This is a step a lot of people skip because it seems tedious or too technical. However, if you don’t have the time or patience to wade through the whitepaper to understand the technology in which you’re investing, you probably shouldn’t be investing at all. Look for things like transaction times, anonymity, security, what type of blockchain it is built on, how they handle transaction fees, whether or not they proof of work or proof of stake, etc. All of these factors are vitally important to the future of the token, and will determine how successful it will be. If you need to do a little Googling to understand terms, do it! Don’t just gloss over this part. 3. Join your token’s community One thing that the crypto-world is really good at is building vibrant and supportive communities. I’ve learned a ton from joining Slack channels, Facebook groups, Discord groups, etc. Ask questions. Get clarification on the tech from the moderators and more experienced investors, and just listen to conversation. A cryptocurrency’s community often reflects the underlying potential value of the token. Is the community sparse, full of trolls, and lacking leadership from the token’s company? Probably a good idea to steer clear. Are the community members helpful, willing to share information and walkthroughs about the token, and is the community supported by development staff? Odds are the token is worth a second look. 4. Check Twitter’s pulse on your token CryptoTwitter is a fun place, and it’s an easy way to keep up with current news and do research. If you’re not on Twitter already, create an account, and follow some leaders in the space. . Here is a list to get you started When researching a token, you can use a “cashtag” to search for every mention of that token. It would look something like this: “$DCR” or “$BTC.” Keep in mind that sentiment is merely emotion, and that’s generally what you’re looking at on Twitter. Do NOT invest purely on emotion. Put in due diligence on steps 1–3 before considering Twitter’s opinion on your coin. You can always find a shiller and a scammer on Twitter. People ask me all the time for investment advice. “What token should I invest in,” or “what exactly does a good token look like?” I rarely if ever give direct responses to these questions because we are completely different, you and I. Our risk tolerance is different, our technological preferences are different, and our buy and sell methodologies are different. If you have to rely on someone to know when to buy, you should also rely on that person to know when to sell. So do your own research. Ask informed questions like “here’s what I’ve researched so far — where else can I learn more” instead of “what token should I invest in?” Following these simple steps will start to transform you from a crypto noob into a budding crypto community member. If you haven’t invested in Bitcoin yet and you want to join the movement, the easiest way to begin is with Coinbase. Get $10 of free Bitcoin when you use this link — it’s my referral link — and get started now! If you’d like to start using an exchange instead of Coinbase, Binance is a great place to start. Sign up here !

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4 Easy Steps to Discovering the “Next Bitcoin”

4 Easy Steps to Discovering the “Next Bitcoin”

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