Avoid the trap

Avoid the trap
Avoid the trap 2017-09-12T18:21:29+00:00

 

Before setting out on the quest to become the next crypto-millionaire, it is important to keep the points below in mind.

Decentralisation and Pre-mines

In order to gather the trust of potential participators and investors, altcoin creators often choose to avoid centralisation and pre-mines, with the latter meaning that a portion of the total coins to be issued are mined before the rest of the network.  More often than not, the pre-mined amount will be sold off as soon as there’s a slight increase in price.  Nowadays pre-mines are being looked at more favourably thanks to the inception of Initial Coin Offerings (ICOs), and these can be sound investments as long as full transparency is followed by the team behind the ICO, include a full revelation of their personal identities. Notable ICOs include Waves, Matchpool, and Ark.

It is also advisable to steer off altcoins which are touted as decentralised with no pre-mine, but which have mysteriously gone through a flat period and have suddenly been brought back to life. This is often a clear indicator that the creators of the altcoin have taken advantage of the dead/flat period to mine the currency at a very low difficulty, and then hyped it up to bring back investors and shoot up the price, with the intention of selling their own hoard at the first possibility. This, in fact, is precisely what happened with Megacoin for instance.

Innovation

A myriad of altcoins have been created throughout the past few years, especially with the emergence of websites which offer altcoin creation services at a very low price. Most of them are clones of the more prominent coins, and offer nothing new to the market. First of all, the prominent altcoins are not created using an altcoin creation website; they are created by a dedicated and active team of developers, and sometimes created from scratch using other hashing algorithms apart from SHA-256 and Scrypt. Secondly, alt-coins should seek to offer something different to the market, as otherwise it would be pointless to create a clone of a coin which has already established itself.  Avoid coins whose “innovation” is merely claiming that they will advocate one cause or another.

Activity

The development team has to maintain constant contact with its community, and answer each and every question which arises with confidence and certainty. If the dev-team fails to keep constant contact on places such as reddit, bitcointalk.org, Twitter and so on, that it means that the dev-team is not really interested in what the community has to say and offer vis-à-vis the alt-coin, which is the whole point of decentralisation, and shows a lack of professionalism and dedication.

Detachment

Finally, it is extremely important that you do not grow too attached to your investment, and that you recognise the right time to sell. Sure, there’s a chance that your beloved coin might overtake Bitcoin some day and perhaps wipe out all other fiat currencies, but that would be the equivalent of picking the winning ticket in a lottery. Buy low, sell high; but do not become too greedy. A profit of 25-50% is a huge profit when compared to that made by those dabbling in stock markets, and such shifts are easily attainable in the volatile altcoin market. Keep a couple of coins close to heart if you wholeheartedly believe in their success in the future, but otherwise – sell at the first sight of a decent profit.

 

So there you are – try and spot the ideal altcoins for investment, and you have as high a level of certainty as you can manage to get in such a new and dynamic market. However, it is important to remember that you should never invest more than you can afford to lose, and that in order to truly make a worthwhile ROI (Return on Investment), you should be willing to sacrifice a lot of time researching altcoins and finding the right targets.

 

AVADA IT

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