There are many different cryptocoins available with new coins (altcoins – alternative cryptocurrencies) being released very frequently. It can be difficult to get started and find things worth investing or mining. The newer coins offer lower energy use, improved technologies and perhaps higher potential investment return.
It is hard to talk about these things without presenting the information to make your personal investments seem more attractive so please do your own research in depth prior to investing. A good place to look into things is the bitcointalk forum.
Community
In my opinion community is the most important thing to look for in a cryptocoin. Look for what feels right to you. An active community is much more likely to pool resources, make good suggestions, self advertise and support new people. Business are more likely to adopt a coin with a large user base with active trading going on than a coin with limited low volume trading.
Individually you can make a difference, you can buy into a coin at a low cost and help promote it raising the value. With proof of stake (PoS) supporters of the coin can work very much like a worker owned cooperative in nature working towards a common goal. Realize too that some people may take the opposite track trying to discredit a coin so they can buy low or for some other reason – there are always people with this type of energy so don’t write off a coin just because it has attracted a few trolls.
Risk
There are some things that really stand out as risky investments in the crypto world. One is investing in a coin that has a large premine where a small group of people end up with a large amount of the coin or a coin that raises large amounts of development cash on promises that sound good. Or a coin directed by non-profit corporations located in unusual overseas locations with questionable business regulations. (Non-profit cryptocoin banker, I wonder what kind of hours these people will stay open) 😀 It is possible in these cases for the coin to be run by a sort of benevolent dictator that provides bounties for active development and uses the coin value to build community, however, greed seems to be a big part of the mix right now and these investments are a bit risky in my opinion. (That hasn’t stopped me from making them on occasion though) 😀
In the past the world revolved around large institutions and corporations which were required to get the initial capital together for large projects and infrastructure. People new to cryptocoins might be thinking along the lines of what has traditionally has worked. After all corporations and advertising dollars did a great job of reaping profit in the past by convincing everyone to drink fizzy drinks that caused sugar diabetes and smoke coffin nails that gave us cancer and emphysema. 😀 😉 (As an ex-smoker I can be somewhat judgmental)
Smaller groups of dedicated investors in a coin with a more even distribution and longer slower coin creation seem to me less risky. As more people become involved the coins popularity increases almost organically with the nature of Internet spreading the word.
Many coins that create large amounts of coins relatively quickly will start going up in value fast only to be dumped as people start leaving for other newer offerings. Interesting, these coins can go back up in value after awhile if they are not too extreme about it, so if you time things right after the initial price crash the value can improve if the number of new investors eventually balances the rate of new coin creation.
Reward
I think most people that have looked into cryptocoins in general know how much the value of bitcoin went up in a very short amount of time. As big time investors get more involved in bitcoin the timing seems right for major adoptions of many new altcoins. After all, the basic block chain technologies remain the same with newer coins improving on them.
That said, there are many new altcoins out there that don’t seem to add much to the table and it is very difficult to predict where things are headed. Metaphorically it seems like a beach filled with many different types of shells that are being washed ashore at different rates, and there seems no end to the new types being created and some are going to become valuable and some are not, too bad we don’t have a basket big enough to hold them all. 🙂
Security
There are lots of detailed issues here but starting out I would not be too worried unless your investing your life savings – which I would caution you against at this point. 😉
Technical Issues
Coins that show a potential for newer technologies (so called bitcoin 2.0 etc.) that appear to be worthwhile could be very rewarding but also show high risk from software bugs causing issues with the block chain, or competition from other coins.
A good question to ask is: Does it work well? I would download the wallet and play around with it and see how much memory it takes, see if transactions work well, see how long it takes to download the block chain, what types of issues are being reported. If all else fails you can always look at the source code, but that can be rather spooky stuff. 🙂
History
An older more established coin can be a good investment if the price is appealing and the community is still active, even despite other technical barriers to entry. Many of these coins have some pretty colorful histories that are well worth looking into and reading about to me. 🙂
As always have fun with things, that which you enjoy has a tendency to grow and prosper. My hope is that we all find a way to build the wealth we need to support everyone with abundance in the new economy. Even if you do end up investing in a coin that mostly benefits some cooperate investment types, no worries be happy – after all trickle down economics will provide jobs for us all right? 😀
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2 Comments on "How to Select a Good Cryptocoin"
Hmm it appewars like your website ate my first comment (it wass super long) so I guess I’ll just suum iit up what I had written and say, I’m thoroughly
enjoying your blog. I as well am an aspiring blog blogger but I’m still new too everything.
Do you have any tips for rookie blog writers? I’d really appreiate it.
I’m sorry if your first post was lost, maybe look at my post on “Comments” for some ideas around what my process and goals are. As for tips – hey I’m still in learning mode myself but generally try to spell check as much as I can, write new material as often as I can, maybe every day if possible until I get tired. There is a lot of material I’m excited to write about. Thanks for your comment.