You might find the world of crypto to be a bit confusing. You probably want to know how to tell a “scam” from real technology. There is really no perfect system but I wanted to share what I have learned so far.
These are some of the methods I have developed methods to determine ways to investigate and learn about each type of blockchain, token, app or coin.
This is not investment advice, it is just a few recommendations and some good sources of info. Don’t just buy what someone tells you to buy without looking into it! However, I do have a recommendation for newbies at the bottom of this post – look for “NEWBIES.”
1️⃣ The first question is: What is the coin’s current value derived from?
- Is it a meme coin?
- Is it massively hyped?
- Is it some future promise of tech that isn’t finished? (This is in a way a meme coin.)
- Does it have actual functionality now or does it have massive future potential functionality?
- Are there people using it for a unique purpose that brings them value and creates demand?
Many coins derive value from memes and armies of people spreading those memes. Sometimes those memes promise future functionality. There is nothing wrong with that per se, but it’s the schemiest of schemes – and it likely will not stand the test of time without building real tech – except for a few exceptions which could have powerful enough memes that they become some sort of weird digital currency religion.
To find out more about a coin, use the sources below. Also please share other good neutral sources in the comments!
2️⃣ The next question is: Where can I learn more about a coin? – Messari.io – if the coin is listed here, then this is probably the best source of neutral information you can find. – dappradar.com – shows the number of users on apps that use coins on most of the biggest Blockchains – blocktivity.info- shows the number of transactions on each blockchain (this can be gamed easily, so make sure you look for a “!” on the stats which shows something is sus) – CoinGecko.com – (also pretty neutral as CMC is owned by Binance) this site shows current and historical prices and trading volumes for most coins (if a coin has little to no volume, then this will affect your ability to trade it)… – CoinGecko.com – you can also find a link to the actual coin’s website and Telegram here where you can go to learn more about the coin. – Tokensniffer.com – great for identifying scams!! Search the coin name and see if there were any coins using the same code before… or if there are any signals of a scam. (Note: this only works for ETH coins.)
You can learn so much from these sites I have listed above. If you want to go deeper (and you should) go visit the website of the coin. Every coin should have a main website listed on CoinGecko.
3️⃣ What to look for on a coin’s website? – Coin’s Whitepaper – these can be technical, but worth looking at before investing. Ask a technical friend to review it if there are a lot of things you don’t understand. – Coin’s Roadmap – is there a roadmap? Have they executed it? Are they on target or way behind schedule? – Founders – are they active? Still involved? What else have they done? – GitHub – does the project open source code? What exactly is in the repositories? (You may need to ask a dev for help, there are many here in this sub. Post questions!)
There are a lot of fanatical people supporting projects. Try to find neutral sources of info. Don’t just listen to fanatical zealots – go to the links I’ve posted.
🎂NEWBIES – What altcoin should you buy first?
If you are really new to crypto – consider buying USDC and staking it on Celsius or Abra to earn a free 10% on stable USD coins. Each coin is worth $1 and is backed by a US-based and insured company. It’s very low risk and you will earn way more than you would in a bank account.
Then you can always unstake some USDC and trade that to buy altcoins as you learn more.
🕛 Timing Matters
If you buy into crypto when everyone is talking about it and it’s on the news every day – you might be buying at or near the top.
Best thing is to buy when no one is talking about blockchain or when the news talks about a HUGE crash – that could be a good signal to buy. Don’t risk buying at the top of the market – then selling at the bottom.
In the end, everything else is a gamble. There is no 100% sure way to make money.
Remember, this is gambling and the market is highly volatile.
If you have $1000 to lose, also consider dollar-cost-averaging and try to be patient and buy $200 each week over 5 weeks. Don’t just ape 🦧 into something.
Good luck! 🍀
submitted by /u/bensig