With all these different currencies available , what is the best option to invest? Maybe we should start with what makes a currency a bad investment . If a coin has any of these features , your money would be better put elsewhere.
1. PREMINE POINTLESS
The oldest method book . Here , a coin is packed with a large chunk of money reserved for the developer for one reason or another. They will try to justify it somehow , but it really comes down to fill their own pockets at your expense.
Examples:
Phoenixcoin : Solid premine with poor explanation given .
Zenithcoin : 50 % of all rewards block goes to the developer , with no explanation given .
2. AMOUNT DISPROPORTIONATE GENERATED COINS ON LAUNCH
Also known as instamining. This method became popular after people starting to become suspicious with premine currencies. Here, a coin is tossed with the parameters so that the developer can extract a huge amount of coins after the coin was released before many people can join the community and start mining the currency.
Examples:
Feathercoin: 3 million coins produced during the first 24 hours
Goldcoin: Huge amount of coins generated during the first few hours.
Bitbar: 2000 coins mined during the first three hours. Two months after the launch, this amount still represented 50% of all existing currencies
Mincoin: 868k coins mined during the first three hours. Two months after the launch, this amount still represents 75% of all coins in existence
Alternatively, a coin may generate a disproportionate amount of coins in a certain time period.
Example:
Megacoin: 50% of all coins will be generated during the first 5 months. The rest will be generated during the next couple of decades.
3. INITIALLY ESTABLISHED IN A REMOTE CORNER OF WEB.
Here , the person will " liberate" its currency in some obscure website, and start mining for days with little or no competition before posting about it on bitcointalk ; a very obvious attempt to mask a premine .
Example:
pennies , " released " by a site with poor visibility before a post on bitcointalk forum .
4. CLIENT BROKEN IN LAUNCHING.
This could technically fall developer incompetence , but I think it deserves its own section fraud were perpetrated in this manner. The coin will be released , but the customer is either not provided or missing. Meanwhile, mine developers its currency with little or no competition .
Examples:
Mincoin : No GUI client planned weeks after launch.
5. INCOMPETENT DEVELOPER.
The currency is only as good as the developer behind it , after all. It is the active developer? He seems to have a good sense of how the bitcoin protocol works ? Are the parameters chosen for their realistic currency? These factors and others are relevant to consider when judging altcoins .
Examples:
Fastcoin : unsustainable chosen parameters.
Gamecoin : initial client released with a feathercoin logo and FTC as the abbreviation currency.
6. PRESENTATION .
A strong indicator of how a currency will do . First of all , the currency has to have a name , a good logo, a good website. A poorly chosen name or a poorly designed logo is a death sentence .
Examples:
Fastcoin : . logo exceptionally poor design.
Junkcoin : name speaks for itself.
7. NO COMMUNITY .
And finally, perhaps the most important factor , the community. This applies only to established currencies. Some time after the release , there should be an active community of people not only support the currency, but in services relevant to developing it. Coins do not have this week released later should not even be considered.
Examples:
EZCoin : Currency aged with no service or relevant Community to speak.