Specifications – Choose a viable crypto project

Have you decided to invest in cryptocurrencies? You have probably already bought the best known as Bitcoin (BTC) or Ethereum (ETH). However, you also want to diversify and Invest in new projects But you don't know where to start. The method to analyze a project is very important. It is essential to do your own research before investing, here are some points to analyze before you start.

I. The principle of the project and what it brings again

• Does the project solve real world problems?
• Is he the only one to solve these problems?
• Is it different from similar projects and how?
• Is he the most effective in his field?

II. Whitepaper, Roadmap and Tokenomics

• Have you read the Whitepaper, the Roadmap and the project tokenomics?
• Do you think they present the project well?
• Does the roadmap (roadmap) seem to be achievable?
• Are you sure the team can achieve its commercial objectives?

III. The legality of the project

• Do you know which countries are targeted by the project and where is it based?
• Do you know the regulations applying to cryptocurrencies?
• Does the project seem legal to you where it should apply?
• If not, is there a means for the project to bypass local laws?
• Does that seem achievable to you?

IV. The team around the project

• Do you know who are the team members (founder, CEO, developers, etc.)?
• Do they have a LinkedIn profile or are they found on Google?
• What is their experience and are experts in their field?
• Did they talk about the project during major events?
• Do they have a good passive?
• Are you sure they were never involved in any fraud or fraud?
• In general, do you think they can provide the project they promise?

V. Presence on social networks

• Does the project have chat platforms like Telegram, Slack or Discord?
• Is the team reactive on these channels?
• Does he have Facebook, Twitter, Reddit or Medium accounts?
• Are these social networks updated regularly?

If you have answered “no” to the majority of these questions, then it is certainly still time for you to flee this project. On the other hand, If you have obtained a majority of “yes”, the project most certainly deserves that you are interested more closely. Everything is not basically binary in the crypto and this specifications simply aims to give you some tracks of analysis. It is by no means an absolute truth or an investment advice.

So, you want to go further but don't know where to turn? Let us be interested in new points. They are also essential and you absolutely should not consider them as secondary.

VI. Token use cases

What is the token for ? Do you receive dividends? Will you have any voting power by having this token? Some projects have their own tokens, but we don't really know what they are for. With these projects, there are sometimes no clear links between the project and the token itself. If the token is useless, why want to own it?

VII. Capitalization of market, price and supply

In general, if a project already has high market capitalization (for example, more than $ 500 million), you will see less growth margin. A similar project with capitalization of less than $ 50 million will have better growth margin. Always assess the probability that the double or triple project in value Compared to other small projects.

Then it is important to know How many parts in circulation are. Were these parts pre-killed? Who has the majority of token, and why? Is the majority of parts controlled by the project or by an entity? All the interest of the blockchain being decentralization, what would happen if an entity decided to get rid of its pieces?

For a token, the easiest way to obtain data on market capitalization, the offer in circulation and the price is to use CoinMarketCap.com. Look for the name of the token and you will see all this data on a page.

For the example, we chose Ethereum (ETH). Here, the price is under “Ethereum Price”, the market capitalization corresponds to the “market cap” insert and the supply in circulation is under “circulating supply”.

VIII. Negotiation volume

Volume is a factor that is often overlooked by investors. Imagine that you have $ 1,000 in a token but that the volume of transactions is only $ 500. It is impossible to liquidate your position. Generally, it is very rare to have more tokens than there is a volume, unless you are what is called a whale. On the other hand, it often happens that the current price displayed actually represents a small amount of parts. Therefore, you will not be able to liquidate all of your position with the price displayed if the volume is too low. This information is also available on CoinMarketCap.com website.

IX. On which exchanges is the token available?

To assess the viability of a token and its margin potential, it is also important to determine How many exchanges Cryptos offer it to the exchange. Are these great exchanges? Sometimes not be listed anywhere can be a good thing. It very often happens that we hear rumors or information according to which a token will be listed on certain large exchanges. Generally, this news instantly increases the price of the token significantly.

On the other hand, if a project has existed for some time but is not or more listed on popular exchanges it will also be necessary to try to define the reasons.

To verify which exchanges list which tokens, go to CoinMarketCap.com, search the token, then click on the “Market” tab at the bottom. The exchanges are classified there in order of volume.

X. Some more questions before you start

Normally, arrived at this stage, you know if you can get you calmly in a project Or if it is better to avoid it. Some additional questions can however help you make your definitive choice and to assess if it is the right time.

• Is the project supported by a solid community?
• What step is the project?
• Is it still to raise funds or is it in a more stable phase of its roadmap?
• What is the probability that the project is still growing?
• Is there already a usable product (website, application, other platform, etc.)?
• And if not, when should he go out?

It is important to understand that choosing a “good” crypto project is not like choosing a good action. An action represents the property of a company that creates profits for its shareholders, or at least has the potential to do so. Having cryptocurrency represents the property of a digital asset without intrinsic value. What increases or decrease the price of cryptocurrency is simply supply and demand. Indeed, if there is an increase in demand and a limited increase in supply, the price increases. If the supply becomes limited compared to demand, the price increases, and vice versa. Thus, when evaluating a cryptocurrency or a crypto project, the most important thing is to know how the offer increases and what could increase demand.

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