After the incredible success of cryptocurrencies over the last few years, everyone from your hairdresser to retired grandparents are trying to hit it big with the next breakout cryptocurrency in 2018. Of course, finding the next big cryptocurrency isn’t that easy, and there are a lot of factors that contribute to the success or failure of a cryptocurrency.
Here are the 3 most important factors to consider when you are looking far and wide for the next Bitcoin:
#1: Team Structure/Makeup
A project can have a lot of good things going for it, but that can all can be nearly worthless if it doesn’t have a good team behind it. Ideally, the team will have experience running other blockchain (or specifically cryptocurrency) projects, but success outside of cryptocurrency and a very qualified team can do the trick if the other elements of the project are sound. This should always be step 1 of any hunt for the next breakout cryptocurrency. Some warning signs you should look out for are if the team is composed of 5 or fewer people, if there is little pedigree amongst the team members, or if the team appears to have no leaders.
If the team has 5 or fewer people, they are very likely a small operation that will struggle mightily to scale if the initial growth phase is a success. Extremely limited scalability could spell doom for a project quickly.
If the team notably does not have previous impressive professional experience (blockchain-related or not) and/or does not have degrees in any related field, that could be a sign that the team may be talented and have a good idea but will be woefully unprepared for the more technically complicated or business-focused elements of growing a cryptocurrency.
The last and perhaps most important element to look at when examining the team is in leadership. Examine each member of team and see if you can pinpoint who is in charge of which parts of the project, and ideally who is in charge of everyone. If there is a leadership void or if there is no clear structure, the project will struggle to takeoff.
#2: Past Projects
Now that you have a good idea of the team and the individual people you are considering investing in, take a look at any past projects that any of the team members have been a part of. It’s an excellent sign if a team member was a part of the launch of any other successful cryptocurrency you have heard of, and even better if they were in charge of that project. Similarly, if any team member, especially team leaders, were in charge of projects specifically related to the field the project hopes to disrupt, that’s a huge plus.
RoninAi Senior Ai Trainer Max Vasilev weighed in:
“I see so many projects in the crypto space recently that have a super new and innovative idea, but the team behind it has such little experience that I’m honestly not sure if they’ll know how to navigate tricky waters that they’re bound to find. If I don’t see a team with a lot of professional and academic experience, I don’t invest.”
If the team has past projects that are totally unrelated to the field their cryptocurrency is looking to disrupt, that may not be an indicator of success or failure to come. However, if in your research it becomes clear that the team has no past successes and they are unfamiliar in the field, it is likely a very good idea to stay clear.
Of course, every successful cryptocurrency needs a good concept behind it, both from a technical and business standpoint. When investing in a cryptocurrency, make sure that you are investing primarily in the business model or technological advantage that the project brings to the table. Some questions you should ask yourself are: “Is this scalable?”, “Can this stand the test of time?”, and “Are people/industries willing to change to adopt the product?”.
Let’s take a look at two cryptocurrencies and the concepts behind them: Dentacoin and the previously mentioned Brave Browser.
Dentacoin’s aim is to make the dental world run easier and smoother for both customers and dentists. Customers are monetarily incentivized to take better care or their teeth while dentists are paid by Dentacoin themselves. It sounds like a win-win for everyone involved. However, the main issue facing Dentacoin is while the idea may be sound, it runs into challenges when you actually consider whether or not this is a product that people want. Deeply static industries like dentistry are extremely hard to disrupt, as the risk that those in the industry take on frequently isn’t worth it. Dentists will always have customers and make money regardless.
Brave Browser, on the other hand, recognized the ways in which the internet is currently falling short of pleasing its users. It also was founded due to a strong belief in both cryptocurrency and peoples’ wish to donate directly to their favorite creators, rather than watching advertisements. A marked improvement on the speed, security, and way people use something as core to modern day life on the internet is a perfect example of the type of project that can take off.
If you see a crypto project that is a large improvement on the status quo, and is worth it for the core consumers to stray from the norm to use it, it may just end up being a hit.
These three aspects of any new cryptocurrency are the most critical to its future success or failure. You may be able to make a lot of headway on your own, doing research and spending hours pouring over data, but it doesn’t quite compare to external tools that do all of the busy work for you, analyzing more data than one human can handle and offering insights that take more elements into account than one human can, making it far more likely to find that new smash hit cryptocurrency.
However, the external tools that are being used currently are certainly not ideal for most traders. If there is a space to watch, however, it likely lies with RoninAi, an upcoming trading tool that looks like the most advanced tool yet and appears to be much better suited for investors of all levels of experience.
Good luck and happy crypto hunting!