December 1, 2020

Cryptheory

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Bitcoin has missed you and you are looking for opportunities in smaller cryptocurrencies – How to properly invest in altcoins

4 min read
Bitcoin has missed you and you are looking for opportunities in smaller cryptocurrencies - How to properly invest in altcoins

I wish I could buy Bitcoin for twenty dollars. This sentence is called by anyone who has been dealing with crypto for a long time. The time machine does not exist. But catching other opportunities (altcoins) in the beginning is still possible. How to discover a meaningful project?

 

99% of altcoins end up in the abyss of oblivion

 

If you are thinking of buying altcoins, you have to be very careful in the first place. Altcoins include everything that is not Bitcoin and can be considered a cryptocurrency. And if you are going to buy them, you will have a very difficult decision.

 

Buying altcoins carries an enormous risk. No one knows which one succeeds. And it’s not just about perfect technology or team. The one who just comes first can also succeed. And since it is not even clear how far cryptocurrency space really is, so earlier is a very relative term.

 

And we are talking about meaningful projects. An investor without much experience does not even have a chance to know what is actually a good and bad project. And the bad ones are cryptocurrency space crowded. So if you want to seduce yourself on a new wave of cryptocurrencies, here are some tips on how to do this with minimal risk and at a relaxed pace.

 

Don’t invest what you can’t…

 

The first advice is always the same. If you go into an ultra-high-risk area, it is simply not advisable to invest what you cannot lose. If you do, you risk so badly that the investment decision itself is basically a failure. For Altcoins, this is three times more.

 

Do you have money and want to buy altcoins? Then the procedure should be as follows. If you believe that you understand the space of cryptocurrencies, the other lines do not apply to you. But if you are unsure in the shop, take your time. Even if you miss a train, nothing happens. It is still so early that you do not have to rush.

 

It is pleasant to learn about the fascinating space of cryptocurrencies, and the attentive learner will find many opportunities. Will you stand at the side line for a year? It does not matter. It’s better than investing in meaningless projects based on a logo or what a random person has said in a bitcoin group.

 

Basic steps

 

So how do I get started? It is primarily necessary to understand what cryptocurrencies are. Where is their strength and where are their weaknesses such as scaling or lack of decentralization. Then one can rely on his own research. And if he doesn’t, it is important to find someone who understands cryptocurrencies, and ask over and over again why the cryptocurrency has some, ideally lasting value.

 

Let me explain on the example of the safest altcoin. Ethereum is a relatively safe opportunity because it is demonstrably decentralized, enough users are involved in the operation of the network, and most importantly the network is often used for its features. From smart contracts to ICOs to asset tokenization. All this is used on ETH, so it is clear that the network has value. ETH will soon be upgrading to version 2.0, with a wide range of industry-leading specialists working on it. Can Ethereum Disappear? Of course you do! It is probable? Not at the moment.

 

By what?

 

If you start searching for and choosing altcoins, it’s important to keep in mind a few things. The first rule is that going all-in to any project is a stupidity and you always have to remember a huge risk. Diversification is thus a very important part of investing in cryptocurrencies. What should a crypto-hunter focus on?

 

  • Meaningful decentralization and network security
  • Whether the project has a purpose and whether this makes sense
  • Whether the project can solve real problems
  • Who is the competition of the project and if the competition is not much better
  • Whether the project is active – Github for programmers, active social networks, community size, collaboration with existing organizations
  • Team quality

 

Summary

 

The lower you look for in market capitalization, the more risk awaits you and the harder it will be to decide whether a project is meaningful or not. Investing in altcoins is a complex game where many factors will decide how to win. Thus, the investor must not only be consistent but also devote enough time to his own research. If he fails to do so, he becomes a gambler.

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