How to Research Crypto Assets and become a Crypto Expert in 8 Steps
The Crypto economy is hot and everyone is getting into it. It’s the perfect example of an enviroment that is fully described by ‘Information Assymetry’. Information Assymetry occurs when new technologies and methods occurs and only a small percentage of the people are ‘experts’, while the vast majority of people who want to get involved from the ‘hype’ are for the most part, fed misinformation, inaccuracies, are ignorant, and feed for scammers.
While we might try to stop fake news, misinformation, and catch scammers, the best defence is educating yourself. The following is a simple, although not easy, way to create a daily habit of self-learning so that over time, you will be able to call yourself a crypto expert.
1) Read One Crypto Whitepaper a Day
This is a step that you should try to do everyday, or at least a few times a week. Every legitimate Cryptocurrency should have a public ‘Whitepaper’. There are literally over a thousand crypto currencies, and reading one of these daily will help you understand good ones from bad ones. It’s important to read the Whitepaper fully, don’t just skim it. WHile the average is between 30–60 pages, you will find many shorter. I know this may not be exciting, but it is necessary. While reading ask, Does the crypto have a use? What are the economics behind it? If going to ICO, what is the supply, how is it broken out, how are they using those funds. If already ICO’d, how are they using the funds they secured? What is the distribution of those coins to the founder, team, presale investors, etc… As you read more whitepapers, you’ll figure out what is legitimate and not legitimate. You’ll become knowledgeable on trends and the industry
2) Demo/Use The Product
A lot of new ICOs have a roadmap, but no product yet, so it’s hard to tell with them, i.e. more risk. However if they have a product, definitely test it out.
If a beta product or demo is available, try it out. If you love it, maybe it has a great potential, being worth more of your time to research. If the demo is unimpressive, and you determine not worth your time, then you don’t need to research it further.
NOTE: If at anytime you don’t like a Crypto asset, feel free to end your research, and move on to the next.
3) Watch Videos Made by the Crypto Asset Team
Watch videos of the team itself. A lot of projects have whiteboard videos, interviews, conference speeches, etc… A solid way to get information and understand the team to see if it’s something that you have more or less trust in, and if you think the team can accomplish its goals, if they are truly experts, or novices. After watching many videos, you should have a good gut instinct. Especialy after watching many different teams videos. Be aware, just because a video is ‘professionaly made’ you are more focused on the content, not the flashy transitions.
4) Evaluate the Team
Dig into the team further. This is one of the most important steps. Make sure the leaders aren’t shady, avoiding communication and answering legitimate questions. Do they really exist? Can you find them on Linkedin? What about their previous professional experience? Are they connected to many others to substantiate that? Have they worked in the Cryptospace before? If they have done it before, how did it turn out?
5) Evaluate the Technology
This isn’t easy to do, but there are a few things anyone can do. If you’re a software programmer, then you can even start with this step. Check their code repository, i.e. Github. Is the code clean?Is it done well? Who’s doing it Look at their other code examples on GitHub. Check out github and see if the project is active, if people are checking in code, and if it’s an active community. Is actual code being updated? Who is involved in pushing code, research them.
If you’re not super technical, you can still do much of the above. Feel free to make friends who can help you evaluate the technology.
6) Check the Social Networks: Reddit, Twitter, Facebook, Telegram, etc…
While this is an important step, you shold not do this first, as there is a lot of mixed-motivations with people. Social media is fickle and full of errored informaiton. So be careful. Form your own opinions first before going to social media. While community is important, a lot of cryptocurrencies with large communities are terrible. The size of a community does not mean the crypto is good. Hype can easily build following. Remember Information Asymmetry is rampant. Don’t be a sheep, be a shepard.
7) Ask Friends in your Network
Do you have a network? (Not acquaintances online), but real people you know? Make sure your friends are crypto ‘experts’ i.e. they do research, they dig into information, they are healthily skeptical, they have proven (to you) a track record. If no network, develop it. You should always be doing this. Go to Crypto Meet-up groups in your area. Eventually, go to Crypto conferences. Don’t stop networking until you find these people and make a relationship. Once you have these friends, do your due diligence, and then take your research to them and present it and get their feedback. If they say ‘yes’, great! If they say ‘No’, take that into consideration. Again you’re forming your own decision and not fully leaning on someone elses.
8) Grade the Crypto Assets
Grade the Cryptos you’re evaluating consistently. This is very important. Find some tool, make a list of the cryptos you’re evaluating, and create a detailed criteria list that you can grade and make notes on. A few tools can help you in this. SpaceSuitX — A sample tool to help you rate. You can also create a GoogleSheet — Create your own criteria and library. Try not to be arbrutary, but to keep standards the same over time so you can compare and contrast crypto you evaluate. Feel free to go back through from time to time and adjust your criteria and how you graded certain currencies.
!!!Never Never Forget!!!
You are studying cryptos to make investments in them. This is about your money. Do not trust others to make money decisions for you. The uneducated will soon be departed with their savings. So buyer beware, and become an expert!
About the Author
Mark Stephan is an entrepreneur and product enthusiast.
He is currently SVP of Product Management and User Experience at BoomWriter Media, an EduTech start-up impassioned by making writing fun and engaging for students.
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