Don't have weak hands
There is a lot of talk about weak hands when holding cryptocurrency though a lot of the talk is to spread fear, there are more often than not big upsides for doing the research and holding on to the coin that you believe in for 6 months. The following are a list of some of the problems that people run into when into buying cryptocurrency:
CC0 Public Domain Image from Pixabay
- Not doing enough research : If you're planning on making a calculated risk, why not learn as much as you can about making that risk? I'll elaborate more on how to do research later.
- Selling too early : Sometime it takes a while for a coin to pop and realize it's true potential, understanding the coin's roadmap and the future changes that will affect the price is a must do for any sort of buy.
- Believing the hype : Most of the time, 99% of the time the hype is short lived, believing the hype and buying into a cryptocurrency might be one of the worst decisions you can make.
How to do your research
As I said before every sort of calculated risk requires some research, below are some of the primary factors I look at when making a calculated risk:
Is the team excellent, and are they active?
An active team is a must have for any sort of cryptocurrency project. The Bitcoin Core team has been going strong since the advent of Bitcoin, you can easily look at their code on GitHub to see when their last commit was. At the time of this writing the Bitcoin Core team's commit was just 12 hours ago. Any worthwhile project has open source code that can be easily audited and looked at on GitHub. Another great way to research a team is to go to their official website and see if they have a team member page listing, you can then check more regarding a specific team member on LinkedIn and check out their credentials.
Is the technology/use-case compelling?
Is the coin just another useless Ethereum token or does it bring some utility besides being just another token. For example the Golem project aims to create a decentralized supercomputer with the capability of processing distributed calculations, they're current building their Brass release which will enable users to render blender graphics in a decentralized fashion.
How large is the community surrounding the coin, does the coin have international support?
A strong community is usually a very good indicator for a project. Litecoin has been around since 2011, and has a strong community internationally with a lot of support coming from China. There is active mining, and development has picked up. Ethereum has an entire enterprise alliance and has multiple corporations interested in building on top of its technology. These are positive long term indicators.
Follow the coin's messaging channels, mailing lists, Twitter, and Reddit
Staying up to date regarding a specific project requires you to be active on a coin's messaging channels (a lot of coins have Slack channels and Telegram channels). Follow any news regarding your coin that shows up on Cointelegraph, and Coindesk. Discern between news spread by fear, and objective opinions backed by hard data regarding your coin.
Not every coin is going to be in the green everyday
Understand that there will be bumps and great volatility along the way, but always check back into the project and make sure that the fundamentals of that project still stand, it will go a long way in ensuring that you made a successful investment.
Cheers
~Np