After researching hundreds of ICOs and coins a month, I wanted to share some insight into what makes an altcoin a long-term hold.
1. How well does the company explain their product and technology – When researching an ICO or Altcoin, I first visit their website. If I can’t figure out what they do within a few seconds, I will assume that most potential investors will experience the same thing. There is a reason the KISS (Keep It Simple, Stupid) acronym has become so popular.
2. The difference between long-term coins and those that fizzle and fade away is the way in which they communicate with their community. When you are researching altcoins to invest in for the long-term, make sure you join their community through Telegram, Slack, etc so you can get a feel for how they interact with their main supporters. If a company treats you bad while they are trying to raise money and ask you to invest, imagine how they will treat you after they have your money.
3. Make sure the product is valuable in that it provides a solution to a need or appeals to a broad audience. Long-term projects should fill a void or should make you say to yourself: “Why didn’t I think of that?”
In the crypto world, when ICOs raise millions from investors looking for the next 10x ROI company, perception is reality. Don’t underestimate the power of a professional looking website, an easy to follow whitepaper and a clear roadmap.
How the Coin Will Be Used:
If a coin is merely a way for the ICO to raise money then run away. The altcoin should be the lifeblood of the company or should at least be valuable as a utility token within the company ecosystem. This is obviously for coins that are not actual currencies themselves. In the case of an actual currency coin such as Monero, ask yourself what the coin provides that Bitcoin does not. Always compare coins to Bitcoin. Most of the time, if they are trying to “overtake Bitcoin” by being faster, more private, etc then your spidey sense should start tingling. Altcoins will always be second-class citizens to Bitcoin. They should do something that Bitcoin cannot in order to add to the cryptocurrency space and not try and become the new mothership.
When researching a coin I always look at the current state of the coin economics such as the current market cap (most important factor), number of coins in circulation, the total number of tokens (is there a finite supply?).
If you want to see a company that is doing all of this right the take a look at ZCoin. ZCoin has an amazing website, they explain their value proposition in a few simple words, they have a blog and they have many ways to get in contact with them. I would say the only thing missing is a great explainer video.