One of the most asked questions about cryptocurrency is how do you know which coins are good or going to do well? There is no real good answer to this question and there are many different approaches when it comes to cryptocurrency.
There are so many different cryptocoins to choose from and the number keeps increasing daily. So how do you know which coins you should invest your money in?
Tips/Hearsay
You could listen to friends, colleagues or use various social media sources and find out what is popular. But don't be fooled when it comes to cryptocurrency, nobody knows anything. There is no way to predict if a coin is going to do well or not.Do your own research.
My favorite method. Just dive in and look at coins that you find promising. Read the white paper, look up the team behind it, crunch the numbers. This can be very time consuming but very satisfying when the coin you invested in goes to the moon. Also this is the best method to sniff out those hidden gems that everyone else overlooked.
My own favorite method of researching cryptocurrency is a bit different though. Researching a cryptocoin or token can be very boring. This is why I focus on cryptocoins that have a practical real world application, even more, an application that I can try out myself.
An example is Steem (duh!), when I first heard about the coin I first did my (boring) research and looked up some steem-for-dummies youtube videos. One of the major problems with cryptocurrency applications is that is sometimes hard to figure out what the thing is exactly supposed to do.
I soon figured out the concept of Steem and that it basically came down to posting blogs and getting rewards in return (for quality content).
Ofcourse I found out later that there is a lot more to Steemit.
I made an account on Steemit and proceeded to write my first blog. Low and behold, I got some money as a reward. Let's just say that from that moment I was hooked.
There are more examples of coins that offer these kinds of applications. Good examples are Wings where you earn money by forecasting ICO's or Firstblood where you can earn coins by winning DOTA 2 games. If the application is something you like doing then it is worth investing in.
This is also a good way of testing out the project to see if everything works as designed or if there are aspects that might stop the coin from ever becoming popular and earn some bucks while doing it.
One of the things I didn't like about Firstblood was that you have to buy in first instead of just competing and earning coins when you win. But the only way to find this out is to make register on the site and trying it out for yourself.
With wings you can earn crypto by submitting your forecasts for ICO's.
Cryptocurrency started out as an alternative method of payment but now there are so many coins that have other interesting uses. As an IT-guy these are the coins that I find really interesting.
Most people don't care about the application of cryptocurrency and focus on the trading side of things. They buy crypto X for $1 and sell it off when the coin goes through the roof not even knowing what the coin is supposed to do. My take is that when you research a coin and try out its real world application that you become more invested in the coin and really start to understand its value.
Do your research, try to understand the application and try out if it works. More often than not this means simply creating an account on the website and playing around with the different options. In the long run this can turn out to be very rewarding.
The value of cryptocurrency is important but also so the application of the coin and researching if it actually works. Most people don't bother with this but that is a missed opportunity as playing around with the application or coin can be very rewarding.
