Knowing what the best cryptocurrencies in the market are is no simple task, let’s first take a step back and understand why this is such an important topic to address and why there is no ‘simple’ answer for it.
Cryptocurrencies caught the eye of the masses back during the great boom back in the fourth quarter of 2017. During that period, we saw tremendous growth, specifically, Bitcoin. It had its bullish run from being just around $4000 in late September to peaking at over $20,000 three months later in December.
The remarkable boom led to a multitude of types of investors looking to enter the space to make profits. The biggest of these types of investors were the ‘casuals’ — the everyday people that didn’t even know what a crypto was. The casuals are going to be the ones to ask the fundamental question, “What are the best cryptocurrencies to invest in?” If you ask someone that is knowledgeable in the area, what would that someone even respond? Any answer other than the widely known Bitcoin would just lead to more debate and controversy.
Ultimately, everyone wants to make money, so why should the question not be asked? probably because so many have asked the same question. This where the ‘casuals’ become researchers, and the crypto exploration begins.
If you’re just getting started in the space, you should first read the cryptocurrency beginner guide, before selecting the best cryptocurrencies out there.
What is a cryptocurrency?
A cryptocurrency is a digital token or coin that can be exchanged between users without the need for a central authority like banks or the government. Most cryptos use what is called the blockchain, which is a set of recorded transactions that is public and chronological and is verified through users called miners.
What sets crypto apart from the other forms of digital currency aside from not requiring a middleman is that: there is no personal data attached to the transactions being made, supply being limited means inflation is not an issue because the value of your money over time increases not decreases, and that anybody can purchase and trade cryptocurrency with another user regardless of local currency being a factor.
The most notable crypto out there is the very first that was made back in 2008 by a person that went by the alias of Satoshi Nakamoto — Bitcoin.
What makes a cryptocurrency good to invest in?
There are literally hundreds of different crypto projects out there so the question, “What are the best cryptocurrencies to invest in” becomes even harder to answer. At the end of the day, crypto is just another type of investment, so when you think of investing in a general sense, what makes anything a good investment? The main things would be something that should produce net earnings and have a long-term viability. The same logic applies to crypto. Since there is no central hub in crypto, you can imagine many crypto projects try to manipulate users with false promises at any attempt of being able to make more money. Here are things to look for to see what makes a crypto one of the best cryptocurrencies to invest in.
1. The Team
First things first, you should look at the team behind the crypto project. Basically, all coins that are legitimate will have a spot on their website that gives information about its team members. If any coin you research hides their team members, chances are it isn’t a good coin. Also, make sure that the people that are on the team actually seem like they can achieve the job they are assigned. It’s a suspicious thing to see someone labeled as “Director of Marketing” but actually has no experience to show he can fulfill his duty. A way you can kind of see team members and their past experience is through LinkedIn.
2. Advisors / Partners
Does the product have strong advisors to support the team? A team can be great and have a nice goal, but advisors are pretty important in actually using their knowledge to direct the team.
3. The Goal
Very clearly the goal of the project should be not only very clear but actually something that could contribute to society in a beneficial way. The goal should also be something that could actually be achievable, nothing that promises anything that couldn’t happen.
4. What makes this project stand above the rest?
There are so many projects out there nowadays that we are at a point where many of them are ultimately just trying to achieve the same goal. So if that is the case, then what actually makes a specific project stand out above the others?
5. Does the company present a strategy for how they will meet the goals of the product over time?
Any company can have a goal, but real companies will lay out an actual pathway of how they can achieve that goal. Whether it be spread out over a year span or five-year span, there should be an outlined strategy that is presented to the public. Sometimes this may be in the form of a roadmap.
6. Does the product actually need its own coin?
If I were to open a company and the goal of the company was to create this product where you could buy and sell jewelry online (yes, I know marketplaces exist but imagine they didn’t). Why would I need my own coin to purchase in this marketplace. Why would I not just accept all cryptocurrencies, the use of debit cards, and something like PayPal. That way it is a lot more accessible.
7. Does the product have a strong social media presence?
What exactly is the company trying to do to bring others to the product? Are they very active with their community? A legitimate project should be actively showing that they want to draw outsiders to their product.
8. Is there a healthy business model?
Let us refer back to the oh so infamous cryptocurrency ‘BitConnect’ and its business model. Oh wait, there was none. It was a Ponzi-scheme that promised investors that they would get outrageous returns as long as they held their coin for a short period of time. There was no mention of how the company itself was providing the money for these insane returns, yet many people fell for it because they thought wealth would come easily. For a crypto project, there should actually be a clear way for the business to make money, more than just the consumers having a happy product. Obviously, if you are going to give out more money than you are taking in, eventually you will just run out of it. That’s business 101. Having a healthy business model is key.
9. Do you think the product will last for years to come?
You might see this as the same thing as the previous question, but it actually isn’t. A product can have an actual successful way of driving in profit, but ultimately the product will die out if in a couple years if there becomes no use for it. Longevity of a business is just as important if not even more so than just being able to drive profits.
What are the best cryptocurrencies to invest in?
If there were a clear goal that every single cryptocurrency tried to achieve, this question would be very easy, however, that is not the case. The great thing about cryptocurrency is that there are so many different projects and the goals of all of them can vary drastically. You can look at NANO which is meant to be a type of payment system that is feeless and practically instant. MCO which is used to invest for a VISA card in which you can convert crypto to fiat and use for everyday purchases. Tether, a cryptocurrency with the sole purpose of acting as a ‘stablecoin‘, with the value tied to the US Dollar. Blox or CDT will allow users to be track, analyze, manage and account for all crypto trades and investments.
In all of the cryptocurrencies listed, there were no similar goals there, they all just share the fundamental characteristics of what makes a cryptocurrency a cryptocurrency — a form of digital currency that can be exchanged without the need for a middleman.
So the question remains unanswered, What are the best cryptocurrencies to invest in?
The best cryptocurrencies to invest in is not an objective answer, therefore there is not truly a single ‘best’ crypto. The standards of what the investor is looking for is what makes the investor buy into the project. If the standards are to par or not. If you can look at the things that make a crypto project good to invest in, and have those things be there for a specific crypto coin, then you have a good coin. Will it be the best cryptocurrencies to invest in? That is up for debate. But the answer to that question, for as long as cryptocurrency stays alive, will remain a mystery.
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(Contributed by Sabio, Blox Ambassadors)