Precautions – Cryptocurrency Investments
The disruptive technology behind the #1 digital currency, known as Bitcoin, is swiftly becoming the next phase of the digital revolution. This revolution began with the rise of the computer, followed by the intranet which made communication between two or more computers on the same network a reality. Further advancements in technology gave us what we know as world wide web; the thread that connects people and businesses across the globe. This technology, as a system, has now become a huge industry, with thousands of other crypto currencies that have emerged, providing solutions for the real business world. The initial coin offerings(ICO) market is down 97% on a year-on- year basis making $40 million so far in 2019, according to research by cryptocurrency exchange BitMex released on May 13. In the 1st quarter( Q1) of 2019, the ICO market has reportedly dropped by 97% based on the amount of attracted capital. The slump followed the 2017-2018 cryptocurrency boom, with low investment returns among ICOs through most of 2018.
The above report gives you a clear picture on how vigilant one must be when it comes to investing in crypto assets. Millions of dollars that ICOs have collected from investors and this is one of the reasons the federal government is working on regulating the crypto space, to protect people’s money. Many people lost lots of money due to being misinformed and not doing their due diligence before putting in the money. The very fact that you are reading this article shows us that you are interested in investing in crypto currencies. So, if you are looking into investing in crypto in a safer manner, then this is the manual guide for you. The purpose of this writing is to help educate investors as much as possible and to reduce speculation in the market.
How to invest in cryptocurrencies (Starting point)
DIGITAL ASSET DATABASES:
- Worldcoin index
- White paper
- Updated wallets available
- Identities of team members
- Traceable Experience of team members
SOCIAL MEDIA PLATFORMS:
- Telegram – access to the development team
- Twitter – active page & news updates.
There are factors to pay attention to before an investor can proceed into putting money into a particular crypto asset. It is very crucial that people who want to benefit in the crypto space do their own due diligence instead of taking uninformed decisions. For the purpose of this guide, I will call these factors metrics. Metrics is a standard of measurement by which efficiency, performance, legitimacy, quality of plan or process can be assessed. This allows you as an investor , to do an assessment on your crypto asset( coin/token) using the following metrics. Out of the measures to take into consideration, below is the BIG 5 measures that are most crucial.
- Product/ Service:
The sector of the project is a magnificent indication of the present and the future value of the project. Each and every coin has a white paper with an outlined roadmap. The roadmap is like a vision board of the project, as to, what are the goals they want to achieve within a specific period of time. If the product is relevant and viable it will be providing solutions to the crypto community and also in the business world. The product/service should be more in the direction of adoption than anything else.
Look if the project has any relevant partnerships or plans to have any in the near future. Partnerships could be with other crypto projects in the same field or it could be companies that have been in operation for long in that same field. Through partnerships the coin builds stability, more value. Through this the confidence in investors is also invoked leading into new investors coming in to buy the coin and become long term coin holders.
It is very crucial that you look for the telegram group or discord and interact with the Admins involved. See if it’s easy to have access to them and how fast they can assist you in any challenges you have encountered. For instance as an investor you could need help on setting up your wallet where you will keep your coins. Is there a team available to assist investors on any kind of a problem that may arise? The team in charge of the project must show transparency and have traceable communication with the community/investors. The effectiveness of the team also depends on their previous experience in their line of work or career. The more experienced the team is, the more the confidence that the coin will thrive for long term and reward investors in the long run.
- Circulating Supply
This is the number of coins/tokens available for purchase. The circulating supply can be checked on the official we site of the coin and also in any of the digital databases like coinmarketcap.com. This information is available even on exchanges on which the coin is trading. The smaller the circulating supply, the greater the risk to rewards ratio. If the coin has a tremendous amount of circulating supply the investor must see if the team has any future plans on reducing the circulating supply. The higher the circulating supply, the lesser the demand and does not attract more investors. In terms of the price, such coin remains stagnant for quite a long time no matter what other factors are in play.
You are here because you are interested in investing in crypto assets. It must be one of your priorities to know how you can store your assets safely. For storage purposes an investor must see if the coin has any wallet to download as storage and what security measures taken into consideration. For instance a wallet should provide you with options to generate a private key, keystone file, etc. Here the investor can also look the exchanges in which the coin is listed. It’s never a good advice to keep your crypto assets on exchanges because you are not in control of your coins and anything can happen. As an investor it’s important to know ways in which you can store your coins and be able to pick a safer one.
In conclusion, the first part of this guide gives your a brief report on how investors were previously affected by ICOs. To lose money in crypto is very easy and the first step to it is to not do research and familiarize yourself with the project. Most projects that rose between 2017-2018 were based on pure theory and speculations . No tangible nor viable product. A coin can claim to be involved in particular projects only to find it’s a lie. According to recent research it is said that 90% of ICOs will not be in existence few years from now. You do not want to be a victim therefore take these precautions and apply them before investing. The federal government is working on regulating crypto assets starting with the exchanges. These are measure steps being taken to protect the investors. It is true that you are reading this guide because your interest is to make money and better your finances. While the main aim is known to be this, make sure you protect yourself and only be involved in real projects like stronghands is. There are many other projects that an investor can look into that will be discussed in the next articles. Blockchain technology is taking over the world and the fiat currency monetary system is at a brink of catastrophe. It is a disruptive system with which almost every industry is finding solutions through its integration because it is fast, cost effective and trustless. Let’s approach investing in blockchain projects with a vigilant eye, an investor’s mentality, rather than a get rich overnight mentality.