Best Amongst the Rest ……

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In the last Article we had a brief discussion on how we can reduce risk of investing in crypto currencies. But even before risk mitigation question that comes to our mind Am I investing in right Crytocurrency??. How can I find the best amongst the rest?? Risk comes from not knowing what you are doing . It is very clear that our investment should be backend by Certain Analysis.

Warren Buffet says ''Price is what you pay value is what you get ''. Value investing is the strategy that investors usually prefer while selecting a stock .This strategy involves evaluating the financial health of the company by calculating the intrinsic value to check is the stock worth investing . Now the question arises can we perform this kind of analysis for Crypto ?? Answer to this question is definitely no because:-

1-Crytocurencies are not company or corporation they are representation of assets on a network .It is impossible to determine the intrinsic value of the cryto.

2- Almost all the crytocurrencies are in their development stages and do not have any track record on which we can rely.

3-Cryptocurrency prices keep on fluctuating on large magnitude.

From the above points we have clear idea that traditional methods cannot be used to analyze the crypto .Thus, analysis on cryptos must be performed with a different methodology. Let’s begin how can we actually Study crytocurrency:-

Engage in research

1-Undestand the concept behind the development of cryptocurrency . Join forums, forums are a great way to understand the coins better. You can find simple definitions of certain concepts . As people all over the world shares their understanding which allow grasping the mechanics of the coin far better. My personal opinion would be to watch videos on youtube to have your basics cleared.

2-Read White paper of the coin which outlines the purpose and mechanics of the coin. However my personal opinion is these are very technical and very hard to grasp . But you can have overall idea about the concept and technology behind the currency.

3-Join official channel of the coin to get familiar with the development team. View the interaction of team with the people. Understand their objectives and their future visions .Is community actively solving the problem and bringing new features??

Asking Simple Questions
Answers to this questions will surely help you to find best amongst the rest.

1- Purpose or need behind the development of crypto currency?
2- Have any other crypto currencies tried to solve this need before?
3- If answer to second question is yes then why did they fail?
4- If answer to second question is no then in what way this new currency is better than the old one??
5- Is the price of the crypto currency in line with the technology it offers?
6- Will the coin exist in future?

As already said I am note a financial advisor but I felt this small Tips would help the investors. Do mention the coin that you feel will exist in future and reason for its existence ??