Are you one of the many people all over the world who have heard of cryptocurrency and all of its benefits, but have yet to make your first purchase? Perhaps you're unsure where to begin, or you've heard of a crypto coin to invest in but are unsure if the risk is worth it. Perhaps you simply do not understand how to distinguish between coins that will thrive and coins that will sink.

The concept of cryptocurrency is built and destroyed by hype. No one will buy a coin that isn't attracting attention. It can be difficult to distinguish between coins that are completely hyped and coins that have real potential. Some of them may be scams, while others may simply be coins that will not last long enough to generate a profit.

Investigate the coin's use

Buying and selling cryptocurrency can sound like buying and selling just for the sake of buying and selling. Simply put, you're exchanging a small amount of money for a larger sum. Normally, this is not the case.

Many cryptocurrencies, like traditional stocks before them, are intended to fund a business venture. Every coin should be accompanied by a white paper outlining the coin's purpose and team. Read it thoroughly to determine whether you're about to make a wise investment.

Some reading tips for the white paper are similar to what you would see when searching for an online scam website or business: professionalism. If the white paper is vague, full of typos, broken, almost empty of content, and so on, the team behind it is clearly not taking it seriously and isn't serious about luring you to the coin.

Next, consider the coin's purpose. It should, like any other business, seek to solve a problem rather than simply make money for the creators. If the writing appears to be a get-rich-quick scheme with little information provided other than "I want to make money," chances are that's all they're interested in.

Consider the venture if you're satisfied with the coin's intended end use or utility. You must decide whether it is a viable option and whether it will last for a long time. Because the longer you keep your money in the coin, the more it grows, businesses with a short lifespan aren't suitable for your investment. Take a look at their marketing strategy. Is it daring? Do they have any plans for the next three to five years?

Investigate the history of the coin

If the coin has been in circulation for a long time, you can examine its history to determine its stability. The primary distinction between cryptocurrency and stocks is that the cryptocurrency market can be extremely volatile. Their highs are extremely high, and their lows are extremely low, so don't be alarmed if you look at the coin's history. You will have a promising coin if it has a habit of stabilising itself.

If you look around the emerging cryptos during Alt Season, you will notice many undervalued coins with untapped potential. Looking over the history of these coins can help you decide if it's something you want to pursue before doing more research.

Social media is another option. No way, no how. One of the most distinguishing features of cryptocurrency is that it is "The People's Currency," which means that people are frequently online in groups on Facebook and Reddit sharing information about cryptocurrency and various coins. Ask around in forums about your potential coin investment for some insight or reviews on working with the coin, and learn all the jargon online. In finance, for example, ACH payment refers to an Automated Clearing House network used for digital money transfers in the United States.

Investigate the group

Any coin's white paper should also include information about the team that created it, including their background and vision for the coin's future utility. If it doesn't, consider that a red flag. Despite the fact that the decentralised nature of cryptocurrency allows anyone to invest in and create cryptocurrency, there is something fishy about someone who wishes to remain anonymous. Is that a risk you're willing to take with your cash?

The more legitimate cryptocurrency projects will list their board of directors and even partner organisations within their white paper. Look up the companies that are enabling blockchain, even if you don't recognise any of the board members. They should be easily identifiable and easily found via a Google search.

Check out the team's credentials. And, no, celebrity is not a requirement. If you believe YouTubers and celebrities who have been caught promoting cryptocurrency scams, they lack the expertise to differentiate between a legitimate investment and a scam, and if you don't believe them, then ignore any white paper that mentions a name.

Look for qualifications in the relevant industry as well as expertise in cryptocurrency. If you're not satisfied with the paper, look them up on LinkedIn and Twitter to learn more about their business background. Take note of how active they are or whether their profiles have been abandoned.

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