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What to Look for in an Altcoin

fible1

fible1

Well-known member
Dash Core Group
Masternode Owner/Operator
Hey guys,
I'm writing a short booklet on how to buy altcoins for the "buy and hold" sort of investor; how to avoid scam coins, signs that a coin has a good base, identifying trolls, gauging a developer, getting community feedback, etc.

I was wondering if you guys could tell me what you look for in an investment coin/what steps you take before investing. Booklet should be done in a couple of weeks (I'm half way in); Ill have it professionally edited and then Ill submit it on KDP. I am happy to provide free copies to anyone who posts a lead :).

Thanks for taking the time,
Pablo.
 
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Pablo, there was some good post @ bct I think by alex-ru about why to invest in dahs etc....

For me it was:
1st - non anon developer - real name
2nd - working developer
3rd - developer who brings new features to live
4th - the growing community

edit: ahhh was thinking why dash BUT to be honest these are the good reasons why I invested in dash too....

edit2: I don`t remember neither.... meaby looking at his posts history?
 
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splawik21 said:
Pablo, there was some good post @ bct I think by alex-ru about why to invest in dahs etc....
Click to expand...

Hey,
Do you have a link by any chance BCT is pretty big :). Or do you mean on the Dash thread?

My question is general BTW, not Dash specific :).

Pablo.
 
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Well, first of all: for me, there are no more "altcoins". Initially, altcoins were considered to be a source of ideas for BTC (btc being the "main" cryptocurrency in that scenario). It didn't happen, it does not work like this any longer, it never has, actually. Bitcoin doesn't seem to be willing or able to adopt any of the "altcoins" good ideas, improvements and solutions anytime soon. So, IMO, what we have, nowadays, is a healthy competition of "equally" important cryptocurrencies. A competition offering "some desired qualities", aiming to gain more market share.

Just like splawik said, knowing the developers, knowing their works and the results of their works, as well as the growing community. I think that pretty much sums up what I look for in a cryptocurrency. But, there are still so many different altcoins sprouting everyday, that it can be confusing. I still see many (apparently) "uncecessary" projects (not to say scams). It makes it too hard for anyone to take the time to read about and filter each one of them.

I pay special attention to the creative solutions brought by the project: How is it different from what we already have working among the known crypto projects?

In the end, we also depend on "marketing" as well, because sometimes only with some "hype" will our attentions be brought to some new crypto project, and hopefully this way we'll find some new "good" projects starting.

So, basically, if I have the opportunity to learn about a cryptocurrency project, I'll check "what solution is it bringing?"; "how creative and relevant are that project's objectives?"; "who is involved with it, and how committed they show to be?".

But this only works for long term investors (Buy and Holders, as you said). Some lucky guys are just happy to make money with the many pump and dumps... I've never succeeded in the short term realm :oops:
 
Just wanted to add that I use the number and size of transactions, this gives a really good gauge on the health of a coin. If it is increasing more people are getting into and using/investing in the coin so great, but if it is falling steadily then it is time to start selling out.

I also think forum traffic is also a great proxy for the number of people interested in the coin(e.g look at dash's bitcointalk thread).
 
The number of nodes globally for the wallet and how long sync and locking onto nodes takes.
when I was mining some alt coins there were literally only 1 or 2 seed nodes at the start, maybe rising to only 4-6, this would make slow wallet update times and a weak network health status, quarkcoin for example had many 1000s of nodes but now only has a couple of hundred or less.
Also the hash rate-is it climbing/decending/stable, and is the mining only at 1 pool/many and also p2p decentralized to a degree?
 
Pablo, there is lots of technical stuff here,
https://download.wpsoftware.net/bitcoin/alts.pdf

''Poor update management.
It’s important to realize that every single piece of code which affects the validity of blocks is a piece of code which must be identical across all consensus
nodes. Changing this code requires a carefully planned changeover, including public asser-tions from a majority of stakeholders that they will switch at the right time.
As an extreme example of failing this, in January 2014, the meme-themed altcoin dogecoin
pushed a small-seeming change in a point release of their reference client. This change
affected the maximum output size of a dogecoin transaction allowed in a block. Since not
all nodes updated, as soon as a transaction appeared which was valid under the new rules
but not the old ones, the blockchain forked badly. In true dogecoin silliness, the users
quickly jumped onto Reddit and started tipping each other madly, knowing that there was no
consensus on who was tipping whom.''

For example when Dash updates the consensus is reached quickly because the masternodes form the majority of the node network, but what happens when you have a coin with different versions/protocols? (i.e fork likelihood) and many out of date full node wallets (bitcoin has this)
 
fible1 said:
Hey guys,
I'm writing a short booklet on how to buy altcoins for the "buy and hold" sort of investor; how to avoid scam coins, signs that a coin has a good base, identifying trolls, gauging a developer, getting community feedback, etc.

I was wondering if you guys could tell me what you look for in an investment coin/what steps you take before investing. Booklet should be done in a couple of weeks (I'm half way in); Ill have it professionally edited and then Ill submit it on KDP. I am happy to provide free copies to anyone who posts a lead :).

Thanks for taking the time,
Pablo.
Click to expand...
My answer is simple, Google it. see how many transaction per day a coin made, Liquidity. And other reference e.g. https://www.coingecko.com/en And http://bravenewcoin.com/
The most important thing is Do not buy IPO coin.
 
It's not quite as simple as "avoiding scam coins" because sometimes we might think something is not worthy our attention only to find later it had more teeth than we initially thought. Bitcoin is a good example of this; many people might brush it off initially.

The greater question is, how to distribute your investment with a risk profile to suit the investor. Yes, you could probably identify the most obvious scam coins, but the rest needs to be balanced against the investors appetite for risk. However small, you've got to be in the game to stand any chance of winning.
 
GrandMasterDash said:
It's not quite as simple as "avoiding scam coins" because sometimes we might think something is not worthy our attention only to find later it had more teeth than we initially thought. Bitcoin is a good example of this; many people might brush it off initially.

The greater question is, how to distribute your investment with a risk profile to suit the investor. Yes, you could probably identify the most obvious scam coins, but the rest needs to be balanced against the investors appetite for risk. However small, you've got to be in the game to stand any chance of winning.
Click to expand...

Hey :),
Thanks for taking the time to post. I actually take the opposite approach and my method is about making investments once coins reach certain milestones. I actually suggest that you should not invest in any coin before it has reached the 6 month mark. You are right that in this case you could miss out on being a ground floor investor in a successful coin, but I also feel it's a numbers game and that over time you will have more success by being more conservative.

Still, I really appreciate you taking the time to post and helping me out with the book :smile:.

Pablo.
 
fible1 said:
Hey :),
Thanks for taking the time to post. I actually take the opposite approach and my method is about making investments once coins reach certain milestones. I actually suggest that you should not invest in any coin before it has reached the 6 month mark. You are right that in this case you could miss out on being a ground floor investor in a successful coin, but I also feel it's a numbers game and that over time you will have more success by being more conservative.

Still, I really appreciate you taking the time to post and helping me out with the book :smile:.

Pablo.
Click to expand...

Not all investments are equal, the ratio of investment would reflect the risk and appetite for risk. Not investing has only one guarantee... that you won't win.
 
fible1 said:
Hey :smile:,
Book is pretty much done; but I'm always open to new input and am happy to do a rewrite if needed. What suggestions do you have?

:smile:

Pablo.
Click to expand...

Features
  • Why does the coin exist?
    • “To make the developer(s) rich quickly” is a bad reason. It’s probably also the reason most coins exist.
  • What functionality does it offer over current market leaders (e.g. Bitcoin, Litecoin, Dash, Ethereum)
Team/Management
  • Is the developer identifiable as a real person?
Community
  • Is the community mature and accepting of new users?
Operations/OpSec
  • Do the build developers sign downloads?
  • Is there a website which identifies:
    • development team — dev team GPG keys for signing downloads
    • wallet/downloads page
    • are builds available for all major desktop platforms? (windows, osx, and linux)
    • is the source code 100% open-source and hosted on a known code repository (e.g. github or bitbucket)
    • for each binary build, are there 2 files to download and are they easy to find on the download page?
      • a binary file
      • a .sig or .asc file which is a detached clearsign file
    • are standard conventions followed?
      • standard file names, appropriate for each build/type?
      • are the clearsigned .sig files the same as the binary file but with “.asc” or “.sig” at the end?
      • does this convention change with each release? (yes=bad)
    • It might seem trivial, but ability — or inability — to establish and follow standard conventions reveals so much more about how organized the developers and the team are.

    • For example, standard conventions above are DEAD SIMPLE to establish and follow with a properly organized and automated system, but if the dev team is flying by the seat of their pants with each release, you’ll see differences in file names, .sig/.asc extensions, etc, etc. If you see this, run. There will be mistakes and things will be left out.
Usability
  • How easy is it for regular people (non-tech) to use
vanillacoin-osx.png


  • How easy is it for tech people (e.g. me) to use?
Code
  • How easy is it to compile/build?
  • Hard/soft dependencies?
 
Thanks for the great post mate. Will definitely review this in detail.

Pablo.
 
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