1. Be part of the community
Cryptoassets investing field is tough.
To make sense of it may be difficult at the beginning.
A new asset going on fire is something like the spread of the ermahgerd girl meme. Most people simply can’t get it. But if you laughed your ass off on that one, you may have what it takes to be a successful cryptoinvestor because, like memes, it’s an internet thing. Created by geeks, spread out by enthusiasts and adopted by users.
The conclusion is: if you’re not part of the community you won’t make it.
Take Dogecoin, for example. Could a reasonable, even-minded person have seen it coming?
All it rested upon was this
It sported a funny mining reward lottery mechanism, where you could gain millions doge just mining one block. It used scrypt algorithm for proof of work, making all ASIC mining equipment designed for bitcoins unfit for the work.
Just 11 days after its launch, it rose 300% in value. Three days later it dropped 80%.
Even if Dogecoin is ancient history in cryptoassets world, it still is the 7th most capitalized cryptocurrency and a lasting icon.
It success was due to an insider’s attitude on:
too much perceived seriousness around bitcoin;
a natural tap into meme culture;
a smart technical choice. Picking scrypt made all SHA-256 Bitcoin mining equipment unfit for Dogecoins, giving back power to the large community of individual miners disgruntled with the rise of ASIC equipment.
2. Understand the basics.
You don’t need to be a geek genius to understand how things work. Spend some time grabbing the basic concepts behind Bitcoin network, since all other cryptoassets are trying to adress real or perceived shortcomings of the main network.
2. Set up information channels.
Once you’re in, you’ll be flooded by too much information. Lean on reliable sources to filter signal from noise. This is the main reason to join a group of people you can trust.
3. Get in early.
I don’t mean when you see cryptoassets skyrocket on charts. That’s damn too late. By early I mean the developement stage and the launch stage. Every new cryptoasset needs a community to support it. Developers will be online before they launch their projects, publishing code, blog posts, white-papers. Follow them. You’ll get a feeling about their skills, reliability, timeliness in meeting release deadlines. Tear the material apart, discuss it online and with your team.
4. What is this new asset meant to accomplish?
This is the most important question you have to ask. The web is full of copy-cat projects. Pin down each new release value proposition against current situation backdrop. Best indicators are: a) tackling a new market (example: Digix proposal to digitalize gold); b) solving open issues (example: Raiblocks offers to solve the scalability problem of cryptocurrency transactions).
Once you find promising cryptoassets, vet their technical viability. Of course you cannot do it all alone. This is what your team and information channels are for.
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