Let’s Talk Crypto

Is it all hype? Is it legit? Almost everyone has a different opinion. We are not here to tell you what to think, but rather to share and explore ideas. 

I am an advocate of crypto for many reasons and want to share what I believe to be the beginning steps for someone who is new to crypto and confused with all the noise. 

First thing to keep in mind is that usually when people use the word crypto, they are referring to both coins and companies. However, there is a big difference between a crypto whose sole purpose is to be used as a means of transaction and a crypto company that is building crypto products (i.e, NFT platforms, crypto exchanges, virtual world platforms, blockchains, etc)

In this post I only want to address coins and 5-steps for someone who is new to the world of crypto:

Step 1: Differentiate Coins from Crypto Companies

Coins function as digital currencies or tokens that may have utility within their respective ecosystems. Crypto companies, on the other hand, develop and operate the technology behind those coins and build products. 

Step 2: Understand Bitcoin and Altcoins

Bitcoin is the first and most well-known cryptocurrency. It operates on a decentralized network called blockchain and aims to function as a digital currency. Altcoins, on the other hand, refer to all other cryptocurrencies apart from Bitcoin. Understanding the fundamental differences between Bitcoin and altcoins is crucial for effective analysis.

Step 3: Analyze Coin Characteristics

When analyzing crypto coins, it’s essential to assess their unique characteristics. Consider factors such as the underlying technology, scalability, security features, transaction speed, consensus mechanism, and decentralization. Evaluate the team behind the coin, their expertise, and the overall community support.

Step 4: Evaluate Market Potential

Assess the market potential of the specific crypto coins you are interested in. Identify the particular use cases they aim to address and evaluate their relevance and potential adoption. Analyze the trading volume, liquidity, and overall demand for the coin in the market.

Step 5: Consider Risk and Volatility

Crypto coins are known for their volatility, so it’s crucial to consider the associated risks. Evaluate the historical price performance and fluctuations of the coins you are analyzing. Understand the market cycles and factors that may impact the coin’s price. Consider factors such as regulatory risks, competition, and the stability of the underlying technology. Assess your risk tolerance and determine if the potential rewards outweigh the risks.

-GC