We live in the heyday of the cryptocurrency market — even if this market is run by bears. Events are developing rapidly. Someone in despair sells cryptocurrency at a loss, someone, on the contrary, is sure that the right moment for investment has finally come.
Of course, everyone would very much like bitcoin to rise above 12 thousand dollars, but this should be a real growth. The inflow of external funds should not increase the value of the cryptocurrency — in contrast to the growth within the ecosystem itself. 2017 was the year of ICO, and it was an important factor that increased the value of cryptocurrencies. To replace him came in the year of valuation and regulation, the year of false hopes and forced wait.
2018 did not bring anything fundamentally new to the crypto-currency market. The blockchain revolution did not cover another traditional sector of the economy. In 2017, such a sector was the attraction of funds. Now we have to ask ourselves: what's new in the ecosystem since then? Perhaps the answer to it will lead us to exit the bear market.
Today, there are a myriad of blockchain projects that require the attention of investors. Of course, this game is just beginning, and to bet on the winner is not so easy — but you can always determine who is clearly doomed to defeat. Here are seven signs that the cryptocurrency project will lag behind the market.
Don't let your emotions interfere with the evaluation of these factors. If the project found one or two signs from this list, this is not a reason to sound the alarm, but if they were 4 or 5, this is clearly a bad sign.
- Inability to adhere to the timeline from the very beginning
It's a sign of incompetence. If already in the early stages of the project the team has to transfer goals and change the roadmap, it does not say anything good. Even if by this point a lot has been done, the backlog should be alarming-especially if the project exists only a couple of months.
The company may have charismatic founders and a talented team, but the backlog in the early stages says only one thing: incompetence.
This does not necessarily mean that the cryptocurrency needs to be sold immediately, but definitely makes it less suitable for long-term investments.
- Inconsistency in the positions of leadership
The fact that blockchain is a decentralized technology does not mean that you can do without leadership. Its structure may differ from traditional models, but someone should be responsible for the project, as for their own offspring.
Thanks to decentralization, each cryptocurrency project can have a lot of faces and voices, but if you notice a difference of opinion among the leadership, then something went wrong. Everything can start with little things, like disputes about how long it will take to solve a specific problem. Of course, we are not talking about cases when one of the managers is not sufficiently informed; the main reason to be wary is the divergence of opinions among the founders or key members of the team. This is a sign of an emerging conflict.
If the discrepancy is quickly eliminated, you can ignore it, but if such situations occur regularly or are delayed for a long time, this is an occasion to sound the alarm.
- Reluctance to answer important questions
There are many ways to answer a question, and one of them is evasion. Choosing vague wording, you can convince the listener that the information you provide is relevant and sufficient, and without saying anything on the merits. When founders and project managers shy away from important issues, it's a sign of stealth, and stealth is definitely not the best property when it comes to a decentralized project.
If the question is trivial or concerns long-term prospects, the vague answer is quite acceptable. In all other cases, this is a bad sign. If the person to whom the question was asked really does not know the answer, he must honestly warn about it.
Investing in a decentralized project that has secrets is like buying an iPhone that you can't call.
- Sure you have too many conditions for successful implementation of the project
If for the successful implementation of the project it is necessary that 80% of the tasks were implemented in strict accordance with the idea, this is a bad sign — it speaks of a failed business model. The more factors determine success, the higher the probability of failure.
Life is unpredictable; circumstances change rapidly. If the project does not have a significant "safety margin", almost certainly at some point something will go wrong.
If you understand that just one little thing can be a critical factor for the success of the project, it is best to stay away.
- Weak community
Many projects dream of involving an extensive community to facilitate their fundraising, but when problems arise, it ceases to be a valuable asset.
In addition, a large audience will not necessarily be cohesive. It is important that the community is not dominated by speculators, and people sincerely confident in the success of the project. For example, if a company works in the health sector, it is worth paying attention to what part of the community are doctors and other professionals from the same industry.
The lack of a strong audience greatly reduces the chances of the project for widespread adoption, and without this it is hardly possible to talk about success.
Remember: your goal as an investor is to join the winners, not to inspire the losers. Leave the inspiration to large funds and corporations.
- Already existing successful centralized counterpart
One popular expert often says that most cryptocurrency projects are not needed by anyone, because they are far from competing with centralized solutions. That's a valid argument. If the problem can be successfully solved with the help of centralized mechanisms, the blockchain solution will be subject to higher requirements. Enough minor disappointment of the public, to the credibility of the project fell, and his tokens are worthless.
What is the point of looking for a centralized solution if centralized analogues are quite successful? Anyone can criticize and ridicule the weaknesses of the centralized model, but can you claim such success?
Beware of projects that avoid these questions — or at least be extremely careful.
- Dramatic change in the rules of participation
It seems that it is a trifle, but in fact it is a very bad sign. When a project is truly decentralized, no one can just change the rules out of the blue. If this happens with a decentralized project, it means that it is not very decentralized. Which means they sold you a pig in a poke.
Changing the rules of engagement without consensus is a kind of lie. It may be an unintentional lie, but it's still a lie. Consensus is the basis of decentralization. No one can oblige participants to comply with the rules not specified in the White Paper. And even if it happened in relation to some little things, we can not guarantee that in the future changes will not affect the really important things.
Conclusion
Finally, we recall that these are only signs and nothing more. Project managers can notice these symptoms and fix the problem before it becomes known. Otherwise, the project runs the risk of being a disappointment — and this is really unfortunate, if we remember that we live in the heyday of cryptocurrencies.