27 C
Lagos
Tuesday, September 29, 2020

Factors to Consider Before Investing in Cryptocurrency

- Advertisement - data-full-width-responsive="false">

Like with any other form of business, investing in cryptocurrency can be challenging and rewarding at the same time.

- Advertisement -

Unfortunately, there are many variables involved so it is important to be careful to avoid losing your money. Below are four important factors to consider before you dive into the world of cryptocurrency.

GUI and Binaries

The availability of a Graphical User Interface (GUI) ; And binaries (installers) for easy setup, is something to look out for from day one. Very early stage coins may need to be compiled from source.

This is usually explained by developers as a necessary shortcut in order to speed up release of their coins. This is generally a falsehood.

These cryptocurrency developers are counting on the inability of the average user to go through the relatively (for a novice) involved process of compiling a piece of software with several dependencies on a variety of systems.

The idea is to minimize the number of miners on launch day and thus take advantage of the smaller pool of players to mine as many coins as possible. Binaries on at least one of the big 3 operating systems (Mac OS, Windows, or Linux) should ideally be provided on launch day.

Keep in mind most developers will not do this for various reasons, but it is nonetheless an excellent indicator of good faith when it is done. The other key component in cryptocurrency trading is the GUI. The GUI is the wrapper which allows you to

Interact with software visually, as opposed to through a command line interface (CLI). A GUI should also be provided on launch day as most people are not proficient enough to interact with wallet software through a console.

It is worth noting that a developer is not obligated to provide a GUI or Binaries for ALL operating systems, but they should provide it for at least one. Windows is usually the OS of choice because it is the most widely available.

It is a bad sign if no GUI or Binaries are provided for your system after a few days or a couple of weeks at most. It is unconscionable for any period longer than that.

Advertisement
data-full-width-responsive="true">

One possible argument for this would be that the developer is trying to keep Alpha stage software to a select minimum of users, but this will give a grave advantage to those early users and miners over the general public and is an underhanded way to conduct a type of pre­mine.

You should be aware of these issues from your cryptocurrency pre-­launch research, and you should monitor the software provided and the quality of the distribution and factor this into your analysis of a particular coin.

This should not completely turn you off a particular coin, as an unfairly mined coin can reach fair distribution over time. However, it is a red flag to watch out for in the early stages.

Website

You should be conscious of website statistics for key web pages associated with your cryptocurrency, particularly the home page.

Statistical information on introductory pages for your coin show you whether the stream of new users investigating your coin has likely gone up or down, whether you have a high bounce rate, high page views, etc.

Global Node Count

For most coins, nodes are merely full (core) clients, which run a complete copy of the Blockchain and which are kept running.

What this does is secure the network by adding yet another full copy of the block chain whose transactions can be checked against, and have all other nodes broadcasts checked against itself. This is an important indicator because it reflects the health of the network, but it has to be taken in context with a coin’s given stage of development.

When a new cryptocurrency coin is launched, the developer will likely “seed” 2 or more nodes onto the network to help validate initial transactions. As more nodes are added onto the network, they will each add a level of safety.

Within a few weeks of launch, you should see no less than ten nodes, and within a few months or so, you should see no less than a few hundred nodes on the network and slowly climbing (not falling). Of course the more nodes you see on the network, the better.

Nodes are easy to view on blockchain explorers (just click on the name of your specific coin and scroll down), although this information may not be tracked for all coins. If you have any issues, you should be able to find what you are looking for by simply Googling “‘Coin­Name Node Count”.

Advertisement
data-full-width-responsive="true">

Node count should only go up as new adopters start to run full nodes themselves. Only once your coin starts reaching maturity, should you expect node count to stabilize as the network consolidates.

Thus, node count is a good indicator of adoption, and something to consider when looking to invest in cryptocurrency for the first time.

The Bleeding Edge:

Finally, a note about investing in the “bleeding edge”. Several cryptocurrency coins have sprouted claiming to be Bitcoin. Recent ones include Ethereum (which is very popular right now), Bitshares, and many, many others. Bitcoin is a straightforward idea.

It is a decentralized means to transfer value between parties across the internet. If it weren’t for the “decentralized” part, it would in no way be innovative. It would be just another online remittance service.

When you start talking Bitshares for example, you start talking “securitized commodities,” “futures contracts,” etc. and it can all become complicated very fast.

These cryptos require adoption by industrial actors, at a yet unseen scale. Ethereum seems to be making serious inroads these days, but most people are still unconvinced. Generally, focus on currency features, stay away from complex “business” features; At least for the time being.

As a general rule of thumb: Always use your common sense and try to gather as much

Information as possible before you commit to a certain cryptocurrency coin. Try to get feedback from as many places as you can, including the coin specific forums.

- Advertisement -
Kingsley Felixhttps://kraftysprouts.media
Based in Port Harcourt, Nigeria. I am the founder of Krafty Sprouts Media, LLC (US), i make sure thing run smoothly and well organized in our organization. Follow me on my social media platforms.
- Advertisement -

Trending Now

How to Delete and Hide Bought Music on iPhone or iPad?

Most users want to keep their music and playlists private. This can be understandable. With some, they don’t merely want others to see their...
- Advertisement -

Startimes Subscription Prices, Packages and Channels List in 2020

StarTimes Nigeria is one of the popular cable TV providers in Nigeria. This service is a subsidiary of a Chinese based company...

10 Best Places to Download Bollywood Movies

Do you spend hours watching Bollywood movies as I do? Have you been in search of the perfect sites to download the...

9+ Infinix Phones With Best Camera in 2020

People purchase smartphones for different reasons, and it is no brainer that the camera specifications is one of the features they look out for...

GB WhatsApp, WhatsApp Plus and OG WhatsApp Tips and Tricks

Checkout the new GB WhatsApp Tutorial. Hello, welcome to WhatsApp Plus, OG WhatsApp and GB WhatsApp tips and tricks. For the sake of this article,...

7 Best Offline Racing Games for Android Users in 2020

Are you a real gamer? If you are one, then you will know how exciting it can be to experience the adrenaline rush that...

Best Low Size PC Action Games For Your Old PC/Laptop With Low Specs

Gaming time is one our favorite time and nothing beats the ability to play high-quality games on our PCs but like some of our...

How to Recover Lost Snapchat Account?

Losing a Snapchat account can be disastrous as many of us use the Social for private purposes and its privacy oriented features. Forgetting passwords...

StarTimes Customer Service Contact and Simple Error Fixes

StarTimes has fast become one of Nigeria's most used cable or digital Pay Tv. Despite its vast customer reach, the company has...

Uses and Functions of ROM (Read-only Memory)

A computer is a very important device and besides being the best gadget to play your favorite video games or watching your favorite movies,...

22 Smartphones With the Highest Screen to Body Ratio in 2020

Screen to body ratio on a smartphone screen recently turned into an important thing to consider when comparing smartphones. It became more...
- Advertisement -

Related Posts

5 Critical Questions You Have to Answer Before You Build Your Website

Building an online business identity from the roots is as important as your very own existence in the real world. That is the reason...

Should You Make Your Home Smart?

The world has become a lot easier these days you don't really have to struggle much because almost everything can be done with the...

7 Top Makeup Apps for Android 2020

Are you afraid of trying out a new makeup on your face or just looking to explore a new kind of makeup styles? There...

Why You Should Think About Learning Web Development?

We live in a world today which revolves around technology and our day is not complete without the touch of technology in one way...

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.