How to choose a blockchain project to invest in

Nowadays there’s so many projects that have very distinctive features, solve various problems and use different approaches. If you’re interested in the new technologies, you probably have considered investing a part of your funds in some of these projects. It’s crucial to understand all that defines a good project, otherwise you’ll end up losing your money.

Goals

First thing to consider is: are those goals achievable? Revolutionizing everything is great, but how could this project succeed where many have failed? Do they have a clear goal? In many cases, it’s better to solve one small problem at the time than try to develop the new Internet.

Do you understand what this project tries to achieve? Is it that important? Would you use their services by yourself? Warren Buffet only buys the stocks of the companies that develop services and make products he can use in everyday life. If you wouldn’t use it by yourself, why should anyone else? And what’s more important, if you don’t see a real purpose behind it, why would you invest money in it? Not the best allocation of your funds. Thus, we’ll say it again, the most important thing is a clear purpose and achievable goal.
Let’s take a new coin Crypton for example. What does it intend to achieve? This company wants to create an easy-to-use convertible currency, launch an exchange, issue crypto debit cards and place crypto ATMs to make all this fit in one infrastructure. Is it a clear goal? Definitely. Can this be achievable? With some amount of work put into it – of course.

A Roadmap

Every project must have a roadmap with set milestones. Thus you can see if everything goes according to the plan. If some milestones are delayed that’s a reason to worry. If everything goes smooth, sleep well. Let’s take Lisk for example here. These guys are making a good system, but they always delay their releases. And that’s always a mess. After the last presentation its price has fallen 75%.

Look at a potential market size

How many people will use the final product\service you’ve invested in? If it’s only a niche product or it could be used by millions? For example, a payment system that has all the necessary infrastructure, is easy to get in and out, can have the potential to be widely adopted. But the project that marks the shrimps produced in Colorado and lets you see the path of transportation doesn’t have such a potential, it’s just a little tool, and it’s doubtful that you could get some serious revenue off it.

What benefits do you get

Except from owning tokens you should get some sort of additional benefit for buying the tokens of the project. There’s many projects on the market, and many of them have something to offer. One of the best options is staking. Staking allows you to validate transactions depending on the amount of coins you got and receive a reward in form of new generated coins. That’s called forging. So the more coins you collect, the more coins you get as a reward. Crypton, that we previously mentioned earlier, also allows staking, if you hold any amount of CRP, you get more of them.

What’s the purpose of the coin

Every time you analyze a project, you must think “do they really need these tokens”. Does it have any functional purpose or it is just some sort of chasing trends? Or maybe it’s like a stock? If you have a payment system, like Crypton has, then having this kind of tokens is perfectly natural, when it does serve the means of payment. If we’re talking about Ripple, for example, it’s getting fuzzy. The thing is, those tokens that have the properties of a stock in crypto world don’t give you the same rights. You don’t own a part of their company, you own just some virtual tokens with no purpose. So buy only the functional things, that everyone would need to use a popular service.

Is the total supply limited?

As an investor, you should watch out for the projects that have unlimited supply of tokens. If you want to see the net worth of your investments grow, it’s important. All new issued coins make old existing coins cheaper, because they supress the price, with demand being the same and supply becoming bigger. Some teams even burn the tokens they own after the launch to raise the price considerably. The less coins, the better.

Don’t go all in

That’s very important. No matter how much you like a project, never invest all your money into it. There could be many obstacles even for the best project, and you’ll end up losing all your money in this case.

Conclusion

As we said, you can find many projects to invest to, if you do some reseach. As an investor, you must choose wisely. If you’re interested in Crypton mentioned in this article, you can find more information at cryptoforce.world.

Editor’s Note: This Guest Post has been authored by Cryptoforce. Please perform due diligence before investing. Crypto.BI does not offer investment advice.

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