Crypto for the Average: How to decide which coins to HOLD LONGTERM
So, okay, crypto/the blockchain is not going away. But, you can't honestly believe that all of the
1500+ alt coins will stand the test of time. Just like the dot-com bubble, you will see many fade away.
Sooner or later you're probably going to decide to reduce the amount of various coins that you own. When the
overall market starts to de-couple from the Big Boys (Bitcoin, Ethereum), people will start seeing losers and
winners.
So - I made a list of several things you should look at---for each coin. Some are obvious, and some involve understanding the technology (the basics, at the bare minimum).
- How worthwhile is your coin? Do you think Potcoin will remain......Doge coin? What problem does it solve?
- How many competitors does it have? Which coin is progressing? (up and running) Is yours the best of the group?
- How widely is it accepted? (this may not be important for some coins); nationally? Worldwide?
- Who is on the team of developers? Experience? Trustworthy? ....how often are coin holders getting updates, and how close has the team kept to their posted timeline (if there is one).
- How many well known spokespersons does the coin have? Are they reputable, and is the number increasing or retreating? Seriously---this isn't a main reason, but it does have an effect both short-term and long-term.
- could the coin be outlawed, and could it sustain afterwards?
And also, and if you don't understand any of these,.....it's best you learn. It'll help for decision making.
- Proof of work vs Proof of stake vs delegated Proof of stake. --these things can be quite important to the long term success of a coin,
- scalability -- transactions per second, network bandwidth, storage; can the team tackle these?
- Interoperability - many coins don't 'talk' to each other. There's already a lot of coins out there. Moving access across chains will be important later on.
4)How sustainable is the coin? Will there be enough $ for developers years down the road? Where will the funds come from? Will the initial ICO offering be enough?
So.... these are things to think about, for each coin you own. The retail hype is over, and we will soon be entering a new phase where only the strong (coins) survive and prosper.
Good luck! Happy Investing!