Investing in any coin means investing in that project.That means you are investing in a project, not a coin. Coin is the economic or financial value of the project. If the project is good and the governing body of the project is transparent then the future of that project is good.Today we will talk about coin selection.The first thing to do is to find the project in coinmarketcap and see if the project has a website.Go to the website and search for "whitepaper".The whitepaper is the anatomy or skeleton or structure of the project.
The first things to keep in mind are:
1.You see the project is basically coming to the market to solve any problem. This means what this project will do. Suppose a project comes with a "cross chain" service which means you can no longer send coins from one blockchain to another blockchain. Even if sent, it will not go.This is a very hot topic right now and a lot of projects are working on it.Such as working extensively on chainlink and working on PolkaDot.You just have to be more discriminating with the help you render toward other people.
2.Which verification company is verifying it means certifying. In this case "Certic" is the most trustworthy name.
3.How much is the supply of coins? If there is too much supply, the price of coin may not be much because it involves market cap.If you divide the market cap by how many coins there are, then the value of the coin will come out.Suppose Shiva Coin has a market circulation of 549,063.28 billion coins and the total supply is 589,735,030,408,323. So there are still a lot of coins left in the market. And if you think this coin will be 1 dollar, then you are day dreaming.1$ means 9589,735,030,408,323 or 1 quadro trillion just Shiva's market cap.Total cryptocurrency's market cap is 1.17 trillion till now.The market cap of all the stock markets in the world is 90 trillion.let's be practical. DOGE coins add 5 billion new coins to the block every year so its supply is unlimited. So the value will never be permanent.
4.How much circulation will come in the market and what is the system of mining means how the rest of the coins will come in the market.If there is proof of work then it needs mining and it will not be better than usual now because the whole world is suffering from energy crisis now.So proof of stacking is best because it does not require mining so energy consumption is also not required.
5.Maximum supply will come in the market: This means how many total coins will come in the market because the market cap will depend on it and the value of each coin will depend on it. So unlimited supply means printing like dollar if you want,it means there is inflation.And inflation means that the future of coins is not good.We need to pay attention to deflationary coins.Because they are limited.
6.Market Cap: It would be wise not to invest in the coins below 1 billion Or you can use the DCA method when making investments.Projects above 1 billion are called medium market cap projects. And projects above 10 billion are called large market cap projects. These are relatively safe.
7.Whether the project is dependent on someone: If the main project is dependent on the other side project, then it is better to stay away from it. Because the interaction of that project may cause damage to the original project such as LUNA.
These are the basics besides there are many other things to look for such as who is the founder, what is their history with this market. They have or are having collaborations with some projects or companies. Where else can coins be used? These are called roadmaps.
Since it is a long term investment to look at the fundamentals, it would not be right to invest without knowing about the project later.
Let's keep ourselves safe and keep others safe.
