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How To Research Crypto Projects To Invest in

  • Bitcoin = Peer-to-peer electronic cash system.
  • Ethereum = Smart contract & Decentralized App platform.
  • Dogecoin = Meme coin.
Bitcoin’s whitepaper
Bitcoin’s whitepaper
  • Founder: Charles Hoskinson (Co-founder of Ethereum, CEO of IOG).
  • The project began in 2015, Took place in Asia, Funded through an ICO that took place 2015–2017 in four stages.
  • The currency debuted with a market cap of around $600 million.
  • Hoskinson had a falling out with Ethereum’s co-founder Vitalik Buterin because he wanted to make ETH for profit, but Butterin did not. So Hoskinson decided to make his own project which is Cardano (ADA).
  • Cardano is a “proof-of-stake” smart contract platform that wants to allow “innovators and visionaries to bring about a positive global change”.
Cardano’s background / history
a chat showing bitcoin’s market dominance in 2017 and 2022.
  • L1 (Layer One): These are Ethereum, Avalanche, Cardano, Solana, Phantom
  • L2 (Layer Two): These are scaling solutions mainly for Layer1. L2 is for things that L1 can’t do by themselves. And the biggest L2 currently is Polygon (MATIC).
  • Utility: These are kind of decentralized and centralized exchanges. Uniswap, Sushiswap, Binance etc.
  • Defi: These are defi protocols, such as terra luna, aave, curve
  • Meta: Anything that has to do with the Metaverse, play-to-earn games, etc
Top sectors of the crypto space.
  • Bitcoin: The real O.G
  • ETH: First Smart Contract Platform
  • Polygon (Matic) : #1 ETH scaling solution
  • Luna: Unique stablecoin ecosystem
  • ChainLink: Connects the real-world data with the blockchain
  • Inflationary: is it inflationary or deflationary meaning are they going to continue to make more tokens? And if they are, for how long and how many? For example, Bitcoin is inflationary as they are going to keep mining new blocks and minting new currencies until 2140, which afterward, there won’t be anymore minting/mining. At that point, it becomes deflationary.
  • Tokenomics: Basically a crypto way of saying the economics of a cryptocurrency token i.e ‘The economics of an asset’.
  • Liquidity: You can go to coinmarketcap to see a lot of these metrics/stats just by clicking on any cryptocurrency you’re researching.
  • Market Cap
  • Max Supply
  • Total Supply
  • Circulating Supply
  • Trading Volume (24h)
  • Liquidity is a measurement of the ability to buy and sell a particular asset at its current fair market value.
  • Liquidity is harder to manipulate compared to market cap
  • For new projects, the creators and developers will usually “lock” liquidity into the project to allow new traders to trade and use the crypto/token without huge frequent price movements. This also shows that the developers are putting their money where their mouth is, and this should provide some confidence to new people.
  • Partnerships: What partnerships are they doing in & out of crypto?
  • Social media: Everyone has a social media account, so your cryptocurrency better have one!
  • Growth: How are they growing their ecosystem and their networks? Ethereum’s ecosystem has grown the most, but a really fast-growing one is Solana.
Solana’s ecosystem of products
  • Are there any major red flags?
  • Basically, if all the above important factors are not met and satisfied by you, then is it really worth investing in?
  • Ask yourself, can I see millions of others using and investing in this?
  • Try to make an investment look bad, if it’s very easy to do, then move on. If it’s hard to make a crypto project look bad then you might be onto something.
  • Be objective. As much as you want to get into a crypto project because it has 100,000X potential, you need to look at the data, numbers, and what’s really going on with the crypto.
  • Technical analysis.
  • You want to compare market caps of your crypto to other top cryptos in the market (i.e Fantom — > Bitcoin), if it’s doing better then that proves the saying “more risk more reward”, but if it’s doing worse, then it doesn’t make sense to take on more risk for less reward.
  • % Dominance of Entire crypto market cap: A good example is, if Solana has 3% of all the market cap in crypto, what would be the price if the market cap for all crypto was $20 Trillion.
  • What are other notable people saying about the project?
  • What sector is it in, is the sector supposed to grow a lot in the future? For example, a sector like the metaverse is supposed to grow a lot in the next 5–10 years.
  • Prepare for the worst, hope for the best!
  • How long do you plan on holding this crypto?
  • Do you like it because of what it offers or is it just a good way to make a lot of potential money?
  • What will you do if the project does not grow as fast as you want it to or it starts to lose value over time?
  • Most importantly, and at the end of the day, you should just be thankful for being part of this crypto revolution. It is like participating at the beginning of the internet all over again, and this presents so many opportunities.

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