I recently wrote on how to get a decent income out of masternodes. Masternodes are wonderful to keep getting your paycheck. If you’re lucky with your choice you might also gain lambo in a year or so.
But there’s another way of speculating – buying cryptocurrency while it is in its infant stages and then it rises hundred or a thousand times. So, if you put in, say, thousand bucks, after half a year or so (if you pick a lively coin) you can walk out with 100k dollars.
Or, likewise, if you put in 100k you can walk out with 100 million. And think about the first pizza bought for bitcoin at 10000 bitcoins, which today is about 110 million bucks. Not bad for a piece of dough with cheese, eh? In stocks, if price rises measly couple times people go bonkers, well, crypto rises hundreds of times, and not in decades, how about that? When looking for an investment, stocks are a complete and utter joke compared to cryptocurrencies.
Many people think “oh, but bitcoin is already more than ten thousand worth, I’ve missed the bus! I cannot invest”. Well, not really. You see, bitcoin was the first big daddy, the first front of the revolution. And being first it has the highest market cap and is ahead of everything. Not because it’s the best cryptocurrency out there but because it was first. There are a lot of things that could be done, and were done better today than anyone without hindsight knowledge could have done. Bitcoin is like the first car when everyone rode with horses (banks and fiat currency) and at the time it was a huge breakthrough. But now, other cryptocurrencies optimized, played with and improved the same formula. Bitcoin block time is 10 minutes and, for instance, Digibyte got it to a whooping 15 seconds. Or, Byteball got rid of the blockchain and mining altogether. The list goes on and on.
However, picking a crypto requires a huge in depth knowledge. So, if you really want to bank in big you should be willing:
- To constantly read bitcoin talk forums
- Constantly drop your eyes on the pricing
- Constantly be interested in the news about crypto
And so on. For me, this is not even a work, I’m a nerd and I’m simply interested and that just part of my daily routine just like going to the bathroom. But for you, if you’re not interested in what one crypto is different from the other (a lot of times they’re not different and just looking for a new people saying “we’re better than bitcoin”, and it’s easy today to be better than bitcoin) you’ll have a tough time knowing what to pick. In such case, if you don’t want to study on your own you should have a nerd friend who is interested and is actively looking for investments, skimming through 10 new crypto announcements daily to find one golden nugget occasionally and simply follow him. If you can follow his moves (and nerds love sharing their expertise) you’ll simply be making as much as him without intricate knowledge of cryptocurrencies.
So, now, I’ll be talking about factors I consider when buying a cryptocurrency:
- Current market cap
- Innovation factor
- Who’s behind it
- How large a piece of a pie you can get
- How old is it
- Quality of their site and visuals
Current market cap
Back in the day as a youngling I refreshed coinmarketcap.com page a few times and I thought I should put some of my rusting bitcoin into other crypto that will also go to the moon (as so many others already did). After all, bitcoin is closest now to its full potential as the largest market cap cryptocurrency and will probably reach a point where it stops growing first. And I simply skimmed top 50 coins I saw and looked what’s so new behind them. Such giants as Ethereum and Ripple are also too large so I hoped to find some undervalued underdog I could buy.
And sure enough, I found two that I thought were smaller yet more innovative at the time: Byteball and Digibyte. I picked Byteball because it got rid of the blockchain and mining, which is absolutely huge and like nothing else I saw. Digibyte was the same implementation of the good ol’ blockchain but it also had something I didn’t see at a time: 5 mining algorithms, 15 seconds block times and it also promised decentralized apps like Ethereum. It’s not as great as Byteball but it’s much better than, say, Dogecoin, which even surpassed billion market cap.
Now, it was mistake to buy both of those for me (for profits). Market cap was still huge as those coins are in the top 50. Today, there are almost 1500 cryptocurrencies in market cap. By picking something of the top 50 was a huge mistake because I’m picking from an already insanely competitive one percent at the top. If a coin got to a top 50 you cannot simply expect it to thwart the rest of the competition just like that. Ripple is on top 5, while being centralized and unnaturally actively pumped.
The coins are still great, had someone shown me a Byteball once it came out I would also have bought it and ride to the moon with it. Same with Digibyte. But by being late, market cap being huge I was too late. The only reason to hold them was out of sentiment, maybe to support the coin, but other than that none.
So, if you want to bank in big, 100x or 1000x you’ll have to be one of the first ones to get it, while it is not rising in price and it is not yet adopted, thus, the most risk. I would aim market cap, if I can, to be a million or less to have huge, 1000x room for growth if it will ever reach a billion.
For making profits this also helps but may not be essential. If some coin is nothing new but has a backing behind (like a parasite coin called bitcoin cash) it will still rise to the top, regardless if it is worthless pile of same recycled and rebranded garbage with nothing new to bring to the table. But, the coins that are good on their own and innovative gain natural traction, more and more people look at it and realize it’s good on their own – without outside influence and help. Such coins, like Ethereum, are rare nuggets and people who smell them first bank it the most, while people, who smell them last bank in the least (but they still realize Ethereum is great and innovative). But, this is where you’ll have to know what is innovation and what is not. Ethereum was innovation because it allowed any program to be programmed on top of a blockchain and no server can drag your program with it while crashing, it’s just there and it works. For me, and I hope for you, that sounds simple. But I’ve tried explaining this to the people in such simple terms and some say “I don’t get it”, and, if they will, they will be late and the ones to bank in least.
Here’s my quick test for innovation. What’s so great and new about the coin in one sentence? This should be flashing sentence in the website saying “LOOK AT ME, AND READ IT, THUS I AM”, this should be the main statement why you should pick this coin. If it’s hidden and there is an innovation but you cannot get to it then creators have done a very poor job at promoting their website.
I’ll show a few examples:
1. Bitcoin – decentralized, global, private, limitless payments for a fraction of a cost (or it used to be cheap few years ago)
2. Ethereum – run any program on the internet that cannot be stopped or shutdown, without server
3. Byteball – got rid of blockchain and mining, instant payments
4. Pascalcoin – got rid of entire blockchain history, thus less storage required, rememberable, short bank accounts
5. Dash – instant payments, in a few seconds
Now some bad examples:
1. Dogecoin – well, we’re bitcoin fork but we just created it for laughs
2. Potcoin – well… We’re exact same and nothing new and people can use any other thousands of coins to transfer pot, but choose us!
So, if I can, I’ll prefer a coin that is innovative, but if I see a huge backing behind a coin I might still buy it because, without a doubt, it will be pumped and advertised. I used to be “ALL INNOVATION, NO RECYCLED GARBAGE” and I still am, to some extent, but I’ve noticed that coins with backing simply grow, and quite often, when pumped, grow even faster than innovative coins without such backing. If there’s a mechanism in the coin to help sustain and fund the development (Dash) – so much the better. Coin is self sustaining, self pushing powerhouse. Is this the best moral strategy to support something just because it is pushed? I don’t know, but for maximum, long term profits it certainly is.
Who’s behind it
Seeing people’s faces behind something is nice. Seeing serious looking men makes a nice impression. Sure, nobody knows who is Satoshi Nakomoto, and he made a huge impact in our world without a face. But today crypto community is like a wild wild west full of scammers and hackers who, without even thinking, would leave you broke for the rest of your life taking all your cryptosavings if they could. There are great people in the community but there are also horrible people. Whole coins are created just to scam the investors.
One such project was Droxne. Announcement was made in a bitcointalk forum by a senior member, showing nice graphics of characters from triple A games like hitman and stuff about coin related to gaming. Sure, this is not a first project that did this, there was Nitro token, there is Crycash (by the time you read this the ICO will be over), game credits, etc. The creator of the coin had a huge supply of the coin to aid the development and stuff. Everything was fine, it started trading for 1000 satoshis on the exchange, it was mooning. Months went on, none of the promised games were delivered.
And then the main developer simply dumped his reserve funds in the exchange, crashing the market. Ouch. People paid decent money to only get few thousands of units of Droxne and now it was trading for a few satoshis. A lot of people got screwed over (luckily, I wasn’t one of them).
But, a miracle happened. One guy, CoinCollector006 gathered the team, mostly people who invested in the coin to resurrect it and not let it go down the tube. This is the first case I saw this happening. And now people are active in discord and stuff, looking for partners, exchanges, developers etc. Due to this fact, that this coin was destroyed by the original developer on the exchange it was selling for peanuts. And people who are behind it now are the faithful investors who got screwed over. To find out what happened you need to read ~60 pages of Droxne thread in bitcointalk (most people won’t, hence your advantage). But now, marketcap was a measly million, it has a serious team working behind it and it already had it’s first mooning and after it, stayed well above from where it started. So, at that point, having the opportunity, I bought it. Had the original developer been serious and not a scum, and would have actually delivered something market cap would probably be at least ten million and I would never even have looked at it as an investment in the first place, but this happened and the purchase was a bargain.
Anyway, knowing who is behind a coin, their names, and seeing pictures of the faces is an advantage. Big names and big brands have their reputation. They will not simply all of a sudden screw you over on purpose – you would get a huge brand damage. If a smartphone explodes in your pocket and burns you, chances are, you will not want to see that brand again and it may even make the news and more people will make the same judgement.
How large a piece of a pie you can get
This is for more of a big fish, but chances are, I don’t need to tell a big fish what they should do – they should know on their own if they are a big fish.
Essentially, when media announced proudly “one bitcoin is now ten thousand worth”, this saying was induced by Satoshi Nakomoto when he decided in the codebase that one bitcoin has 8 decimal places and there will be 21 million in total. He could have done it 2.1 million also, the media would shout “one bitcoin is now hundred thousand worth” or 210 million and the media would say “one bitcoin is now thousand worth”.
It’s really not about how many bitcoins you have, it’s how much of an entire share of a selected currency in the world you can get. Sure, it might feel good to say “I have one million Dogecoin” but that is a measly 7000 bucks by today’s price and a minuscule percent of the entire supply. Now, you can also say “I have 50 units of 300 token”. Sure, 300 token is more of a parody than a real project (I still have some and HODL it), but, if you had 50 units of 300 token, while there are 300 tokens, you have 16,6% of the entire supply. Market cap now is a very low tiny number of 300k, not even a million, so, if it even reaches a measly 10 million marketcap, which joke coins reach, you’ll have 1,6 million dollars in your pocket.
If you consider buying a large quantity of a coin, consider how much of a dent you can make in the global market. If you can buy one percent of the entire supply while it still costs peanuts – that is huge. Having one percent of entire bitcoin supply would mean you have 210 thousand bitcoins, which in today’s worth would be about 2,5 billion. And, without a doubt, there will be other bitcoins that will introduce amazing innovations and they will cost pennies. And getting one percent of the entire market would mean you becoming a billionaire. And getting one percent of the entire supply is not such a large sum of money, you can do by having a hundred or two hundred thousand dollars worth of coin. This is where many will become billionaires – by making a visible dent in the entire supply of a coin while it costs peanuts.
How old is it
There are many coins that just hang in the coinmarketcap, gathering dust and nobody cares. Surely, a year or two or three years pass and they get a single huge rise. Chances are, if it still has any life in it, it will continue to rise.
But you’d prefer not to wait that long. You’d prefer if you could to buy a coin in the morning, the same day it rises 100 times and you sell it in the evening. You want to wait as little time as possible for it to moon. Thus, if it is already a couple of years on the exchange and it’s gathering dust at 10 million or so market cap, sure, it may rise any moment if there’s still an active development team behind it but there are projects that rise much earlier. For instance, one such project is LuxCoin. It had one word that made investors (myself included) drool – enterprise. If stuff is sold to the enterprise and also related to security it associates with big money. Enterprises usually have no idea what they want but if you mention the word “security” they’re in.
So, this project was not a token, there was no ICO, it was a separate coin and it appeared on market cap at October 27 2017. Merely a week later market cap reached four million. After a month in January 13 2018 it mooned to 40 million market cap now facing correction. Now that is a fast growing project, everyone’s faces are seen in the website and trade volume exploded on cryptopia. People who bought once it was announced banked in big already, I have no doubt it will reach 500 million market cap in half a year.
You see, if a project is old, it is gathering dust already, you know it is not rising fast. If you pick a new project then you also don’t know whether it will rise fast or gather dust for a while, but now at least you know it has a chance to rise fast while it’s new. And you can be more certain it will rise fast if you follow other guidelines mentioned here. Good thing doesn’t stay untouched long in a crypto world. People who seek money will find a good project, not vice versa.
Quality of their site and visuals
Before there was a bitcoin, I used to try all that stuff of “make money online”. It was about 2006 or so. Most people’s websites regarding marketing looked like an absolute and utter garbage. I’m not a website designer, but I understand how plain html without css looks like. And most of the community was ignorant of that. They would even say “oh, design, forget the design, IT’S ALL ABOUT THE MESSAGE”. Well, I understand if your budget is ten dollars per year, then save on the design for sure. But if anyone is doing anything serious, a coin, a token, a new business – make the website stunning. Even Droxne scammer got amazing presale graphics with characters from triple A games and stuff. Most of the new coin announcements on bitcointalk come with flashy images, like a fair woman dresses up with the best that she has (if she’s wise) to seduce her man.
If a website of a coin looks not right (I never saw one that looks as bad as the 1990s plain html), if there’s no attention to detail, chances are:
1. It may be a scam and the website won’t be needed long anyway
2. People behind it are poor and have no backing
There are exceptions to this rule, like always, but that is my first impression, which is not good and I would want to dig in deeper to find out what it is really like. If someone is in bitcointalk forum, proposing a new coin, first:
1. He should probably know how bitcoin works and why it’s great
2. Chances are, since he’s in the bitcointalk proposing a new coin he should be an early adopter and is not poor
I assume such caliber people on bitcoin talk are not poor and they have no excuse to have their website look like garbage. Great visuals attract even many ignorant people who may not even know what the coin is but if their website looks professional, stunning it will appeal them to go in for a ride.
Like, for instance, I saw one project, Bancor. It’s something about smart tokens, anyone can have their own cryptocurrency (Ethereum did that, waaaaay before, and Bancor is hosted on Ethereum also). I remember looking at a huge post explaining what’s the deal with Bancor and why it’s nothing new. My initial impression, without seeing that post, was that it’s useless, overcomplicated and I never put a foot on it. Out of the two, Bancor or Dogecoin I would have picked Dogecoin because Shiba Inu leaves much bigger impression that some complex, unnecessary smart token system which already existed in the first place. For me, the innovation test of one sentence for Bancor fails competely (if you think I’m wrong write the innovation sentence in the comments).
But boy, did the advertisements flash on the ad networks. Even on facebook I saw even people saying “Bancor Bancor, what do you think about Bancor?”. And, of course, the website looked professional and appealing. ICO hit huge, 153 million. I don’t see a great innovation here but I saw a good advertising and a good looking website.
1. To buy that ICO to go 100x would be a mistake
2. After the ICO market cap is already above 100 million, so, to buy it on the exchange to go 100x would also be a mistake
All achieved by nice advertisements and good looking visuals. So, in short, visuals go a long way, making impression that you know what you’re doing.
Make sure the market cap of a coin is still low, this gives room for growth vs other coins which have already grown, look at around million or less if you can. If the coin is an innovation, that is a bonus, but if it doesn’t seem like it’s anything new, at least make sure it has a strong backing. If you can, find out who is behind it. Photos of people and big names of PhD’s and companies minimize the chances you’re dealing with scammers or some random hackers. Getting a good amount of total supply is important, as total supply dictates price. If you can, and it would not be devastating to sacrifice a hundred or a couple hundred thousand dollars if you lose them, go for one or two percent of total supply (or more, the more you’ll make). Make sure it is new (a must, I’d say) and their website should look stunning and appealing, and it should be pleasant to the common eye to attract other investors.
Thanks for reading 🙂