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LINKS FOR ADDITIONAL READING FOR THIS VIDEO & ALL INFO IN TEXT DOWN BELOW

It explains how to be critical of every aspect of an alt coin, from the technology and economics to the marketing and history.

Here are some things to look out for:

Here are some questions you should be asking when you want to identify the core reasons to invest in an alt coin:
* What problem is the Cryptocurrency trying to solve ?
* Are there alternatives to address this problem that are more efficient?
* Is the Altcoin structured with central control or a decentralised governance?
**And I think this last one is very important to consider:**
* How much of the price of the cryptocurrency is based on the value being delivered today and how much is it based on future promises of development?

Marketing Strategy/Social Proof:

If you’re looking for an alt coin that has some longevity it’s wise to investigate it’s social circle. How big is the community? You can find out by checking how many followers the coin has on Twitter, and by paying a visit to it’s slack channel. Not only will you be able to see how active the community is, but you’ll also get a feel for the overall sentiment of the coin. The slack channel is also a great place for you to ask all of your hard hitting questions. Like how many times has the alt coin rebranded and why?

Development team and Technology:

* What is the new tech that the altcoin is developing? (if any)
* Can the solution be easily copied?
* What is unique about the team behind this altcoin?
* What are the weaknesses of the development team?
* Are the dev team accessible?
* Are their identities public?

Price analysis:

Im sure you’ve heard the phrase pump and dump more than a few times by now.
These are essentially fueled by investors who spread FOMO to pump the price, that’s fear of missing out and then spread FUD to crash the price down, that’s fear, uncertainty and doubt. Many times it is the day traders who create these pump and dumps so they can skim profits.
But a real concern that will be more important in the future is when cryptocurrency ETFs are approved. This is cause for concern because ETFs will allow speculators to short a coin- or bet on it’s decrease of price- without actually having to hold that coin. This is called naked short selling.

When you want to look at the price analysis of a coin consider these things:
* Does the price pump and dump cycle make sense?
* Is it connected with actual events that add value to the currency?
* Is all the market rising or just the cryptocurrency in question?
* On what volume was the price increase or decrease done?

Economics of the coin:

* What is the inflation rate or deflation rate of the altcoin?
* Is the altcoin a PoS (Proof of Stake) or a PoW (Proof of Work)?
* If it is a PoS, what was the distribution model?

History of the coin:
Here is where you’ll find if the coin was designed to be just a scam, or if it was created with good intentions, yet implemented badly.
#### Analyzing the history of a coin is what will give you a better sense of the proof of progress the coin has made thus far and can also shows the direction the coin is heading in the future.

* Is the coin progressing towards its goal?
* Was the coin insta-mined or pre-mined?
* Was that money put to good use?
* Did the creators announce the exact launch time and date of the coin?
* Who are the most influential critics and what have they commented on the altcoin in the past?
* How has the altcoin changed over time?

Now that you know what to be critical of, I encourage you to go out and conduct your own research, join the slack channels and start a conversation with the developers. Read up on any articles concerning the coin and see how it’s progressed, how or if it has made progress, and see what the other critics have to say about it.

Additional Reading/Sources:

CryptoCurrency Investing: Research And Due-Diligence.


www.coindesk.com
www.cointelegraph.com
www.cryptocoinsnews.com

Tone Vays: https://twitter.com/ToneVays?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor

Andreas Antonopoulos: https://www.youtube.com/user/aantonop

source

37 COMMENTS

  1. Hi
    I find ur videos and information sensible and helpful. I would like to know more about these currencies. Please add me to any whatsapp or telegram groups if you have…!!
    Tarun – +91-7838671673

  2. Agreed with listening to Andreas Antonopoulos. That guy is really critical and no drama on him whatsoever. He's involved in the technical side of BTC as well as the public speaking side of things.
    Tone Vays on the other hand, is just a Bitcoin maximalist. He outright calls everything but BTC a scam.

  3. Andreas is a smart guy but do NOT check out Tone Vays. He has already said he doesn't know how the technology works yet still supports it. He's just an /r/bitcoin parrot and calls literally every altcoin a scam.

  4. Hello there, first of all, thanks for your shares. I've learned a lot from your videos since I started investing in cryptocurrencies a few weeks ago. By the way, what do you think of Verge (XVG)? Is it worth investing? I did some research on it and I've invested a little. However, since I'm fairly still new to all of these, I'd appreciate your input to this matter.

  5. Tokenization: is there any reason for an investor to hold a token? There are many interesting crypto projects, but that does not necessarily mean the tokens have any intrinsic value. Also, IMHO, a key consideration is whether the "float" (the tokens or coins available to buy on the market at any given time) is designed to be locked-up or create an incentive for long-term holders. Ex: Dash's masternode model has 4 million Dash locked up out of a float of 7 million coins (last I checked). Dash's masternode design recently caused a massive short squeeze, and the price appreciation creates new interest in the coin.

  6. Heidi from Idaho, my light research into the altcoin space revealed that 2.32% will survive with any meaningful value. So, out of the 800+ altcoins about 20 will survive. It gets worse as time goes on and with more ICO and altcoin coming into the market. Less than 1% will survive with any value.

    You are doing great. Keep up the good work.

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