Investing in altcoins can be tough since there are new altcoins coming out everyday. In about 10 minutes, you can easily identify whether or not an altcoin is legitimate. Here are a few questions you need to ask yourself when you decide to hold an altcoin.
What does the team look like?
- Avoid teams that don't have pictures of their founders on their site.
- Avoid teams that only consist of old businessmen. These guys are the late-comers and are probably in it for the money, and have little to no authentic blockchain technology. It's old, dumb money. Authentic blockchain teams will look like groups of scientists and engineers, not investors.
- Does the team have a smart super-nerd under the age of 25? It helps for the team to have young, smart people. Some good examples are Ethereum, Cardano, and EOS.
- Avoid teams that are only business men. Blockchains are a very active area of research. Being a startup at this point in the blockchain space is more like being a research company. Think of all of the failed search engines that came before Google. Smart people built Google, and smart people will be building the next Bitcoin.
- Building the next scalable blockchain won't take lots of money. It will take lots of brains. Otherwise, blockchains are relatively simple to write up. Bitcoin is a fairly simple project if you compare it with other industrial software projects like Facebook.
What does the website look like?
- Avoid websites that use flashy graphics and floating objects in the background to make their site look cool. There are a ton of websites that use those clusters of dots with lines connecting them, and some even let you interact with them using your mouse. These are all most likely part of some scheme.
- Remember, Google is a single bar in the middle of the page. They don't need to boast about their search engine and how much better it is. Too many sites are making the mistake of providing bullet lists upon bullet lists of features and roadmaps without even thinking about a product. Am I buying a toaster oven?
What does the "whitepaper" look like?
- If it looks like a high-school report, then it isn't a research paper, it's a shitpaper that someone on the team wrote because all blockchains are expected to have an accompanying research paper. We can thank Satoshi Nakamoto for establishing that precedent in this space.
What does their Github look like?
- Avoid companies that don't have a Github. It says that they either don't have anything or they have something to hide.
- Avoid companies that "fork Bitcoin". Just avoid these companies. Forking Bitcoin shows laziness and a deep misunderstanding of the problems that Bitcoin has in its technology.
- Make sure the company is active in their Github. Look for issues, pull requests and commits. Make sure they are working on their product.