How to properly analyze tokens and crypto-currencies before investing


If you ask people what they know about cryptomoney, you’re likely to hear the words Bitcoin (BTC) or blockchain – or even both. What many individuals don’t know, however, is that there are more than 5,000 kryptom currencies on the market today. This huge number makes things a bit confusing for investors.

With so many options to choose from, the task of choosing one to invest in can be a challenge. At the same time, however, there are several potential opportunities for people to get ripped off in crypto space.

You see, some bad actors have designed tokens in an attempt to scam people out of their hard-earned money. Whether you decide to move the funds transparently or privately, your first priority should be to find real crypto currencies to invest in.

In this article, we have compiled a list of some precautionary practices that can help you analyze tokens and crypto currencies – whether a utility token or a value token – properly to make a safe choice.

By carefully reviewing the token’s White Paper

An ICO’s or a cryptomoney’s White Paper mentions the background, strategy, objectives, concerns, and timeline of the Blocckhain-related project for successful implementation.

Since white papers are supposed to be detailed, they can be very revealing. The biggest advantage here is that you can find out whether or not a company has a carefully crafted execution plan, which can be very useful for token analysis. Therefore, reviewing white papers can be very useful.

This is what a white paper should answer:

What is the unique proposition of the project, especially when compared to its competitors?

What is the vision and methodology of the project leaders, and how do they plan to succeed?

What steps will the company take to achieve its objectives?

What are the token use cases?

Start any investment decision in a crypto-currency or a Blockchain by reading the White Paper carefully, and check if you have any supporting documents. This may include Cryoto Engine financial models, SWOT analysis, legal advisories, as well as a roadmap for implementation. You can also determine the suitability for mass trading of tokens.

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If one company doesn’t offer a white paper, treat it as a serious problem and move on to another. At the same time, keep in mind that White Papers should not be taken as the holy grail of authenticity, it is entirely possible for a fraudulent company to create a convincing White Paper. For example, PlexCoin managed to raise over $15 million with the help of its remarkable White Paper before the U.S. Securities and Exchange Commission (SEC) closed it down.