One Simple Rule To Help You Pick The Best Cryptocurrency Application Investments
As a full time investor in the cryptocurrency space, I spend most of my time trying to find the next best investment and in doing so I’ve come across many rules and opinions that I adhere to in order to pick what I believe to be solid cryptocurrencies. Some of these rules and guidelines I have written about in the past whilst others I have kept to myself. Often the main premise comes down to being cautious and calculative. Before we head into the rule (affecting applications, not protocols), let’s think about the current market:
1) The market is saturated with new projects looking to solve problems, some problems already being solved by others — This results in lots of undeserving projects getting funded.
We’re in a time where having a white paper and a brief website can result in funding that entrepreneurs and businesses wouldn’t dream of receiving. In the crypto world we currently live in, buzz words win out over technology worthiness. The majority of investors are average people looking to get rich, hoping to have success that the likes of Ethereum, Neo and Bitcoin have had in the past. They invest their money with more speculation than solid fact and unfortunately this results in scams being prevalent and investor caution being thrown out the window. For the majority of people, they have no knowledge of market economics, investor ethics or business strategy and while cryptocurrencies have allowed the average person to get in on early investing, it’s also opened a trap fall for all those who don’t know what they’re doing to lose all their money and not in style either.
2) Quality projects go under the radar for far longer than they should as the best investments get hidden behind rubbish that uses ICO money to advertise to the average investor through popular websites — This results in a critical point where the quality project floats by without recognition until a major breakthrough occurs and everyone suddenly discovers it.
If there’s one thing I’ve seen correlate throughout the entire market is that quality projects take their sweet time to develop and master their niche, product and concept. Often these gem investments as I like to call them don’t market until far later in the project life cycle, when they know that their product is worthy of sharing with others. The main problem that ends up happening is that the quick cash grab projects often market straight out of the gate, with little facts and product to stand on and more empty promises than actual development. This of course is great for their funding but when they hit road blocks they crumble and innocent investors lose it all.
Quality projects are often cautious with too much marketing, as they know that they need the product down to a T before it’s worth while in attracting users not only to invest but utilise the product that has been developed. A big trend that we’ve seen happen over the past few years with the best projects is that they float by for a very long time at a tiny market cap only to absolutely blow up over the course of a few days when a big piece of news comes out about it. Most of these gems were pretty visible with enough time invested in reading the white paper, getting to know the market niche and even doing cautious research on the team developing the product. For me this was clearly evident with Ethereum, Antshares (Neo), OmiseGo and a bunch of others. They all had their promising use cases and technology being developed from day one, but they just didn’t have that substantial push to make them mainstream. The water shed moment occurs when a very bullish piece of news comes out and blows the gates wide open, in Ethereum’s case the Ethereum Enterprise Alliance combined with the ICO mania was that watershed moment, with Antshares this was the rebranding to Neo as well as talks with Chinese officials and a very bullish market looking for a promising Chinese project.
The Rule — End User’s Should Know Nothing
The end user is the final piece in the puzzle, they’re the ones who will be utilising the application and the ones who truly matter. Any application being developed whether using blockchain or not, is being developed for an end user, a target market. It’s up to the developers then to create an application or ecosystem that perfectly aligns with the end user, it should keep them in mind at all times. The applications that will win out the war in this crypto world will be those who have optimised their end service to be as simple as possible for their target market, the end user should not ever need to know what drives the application. As investors we should keep that in mind as the one rule to follow, find projects where the developers presume the end user of an application know nothing but also don’t want to know anything. All the end user wants to do is use the service for what it is intended for, without hassle, without knowledge and without experience of previously using the application.
We can compare this to today’s software applications by running it through a quick check list, lets use Facebook as the example. Does the user need to know about HTTPS, TCP/IP, VOIP and a myriad of other back end technologies that it is built on in order to use the application? The answer is a resounding no, it performs its job of allowing user’s to post their statuses, message each other and do other tasks without assuming any knowledge of technology, communications and business logic. Facebook knows that the user is there for one reason only, to message, to post, to have fun with others in their network. If they assumed user’s have knowledge of technology and if they forced users to know back end services you can guarantee that it wouldn’t have become popular, because someone else would have streamlined their service and offered a better end product and that’s what any client facing software should be targeted to, the niche it impacts and the end user’s skill level.
Applying this to the blockchain industry
As an investor, it is important then to choose the applications that fit the description I’ve mentioned above, they should be perfect for the end audience, a great example of this is GUTS — which targets the ticketing industry and aims to end ticket touting by using a smart ticketing system that is already in use throughout the Netherlands. It’s a great investment because of how it impacts the target audience, they’ve developed the system so anyone can buy a ticket and they don’t need to know anything about the blockchain to use the application. It’s a perfect demonstration of using a technology but not shoving it in the end user’s face, because, at the end of the day, the user wants to go to a show, not get lectured on blockchain or spend twenty minutes getting accustomed to the application because of the learning curve.
About a month ago I discovered GUTS through an AMA that was being held on the Ark slack. It was one of those moments in…decentralize.today
The best investments will be those who can attract their niche the best, give them the best end user experience and perform all of this seamlessly, without giving the user a migraine from the experience. This is something every investor should remember, but it’s also important to remember this doesn’t mean showing technology is bad, it just means each application should fit the desires of the end user.
GUTS targets anyone and everyone, therefore the application needs to work to suit any skill level and whilst they have the option of the end user seeing their ticket on the blockchain it isn’t mandatory, those with tech experience can dabble and those who don’t can use the application the way it is intended to be used. Of course if the end user is a developer then the application should have more technology in the fore front and so forth. So as an investor, if you follow this rule, you’re far more likely to succeed in picking successful products and in the cryptocurrency world, it feels like people forget that there are others out there who have no idea about blockchains, let alone how they work. If you find the projects who know full well how to cater to their clients, they’ll be far more likely to have success!