I took a call with a video marketing agency who wanted to partner with us.

The founder wouldn’t stop talking about the company’s accomplishments.

“We’ve made our clients a lot of money. We work with the best.”

He wasn’t explaining how he could help us.

He kept talking about himself.

I was fishy about his approach, so I used my trick to identify liars.

“Tell me about a time when your client didn’t get their desired result. A time when you failed.”

I was looking to see if he would take responsibility for the failure. If he did, then I’d consider his proposal.

“They were the worst company.” He should’ve said, “We didn’t vet the company.”

“They had unrealistic expectations.” He should’ve said, “We didn’t set the right expectations.”

“They also didn’t have enough leverage with their assets.” He should’ve said, “We didn’t correctly assess the value of their assets.”

I stopped listening.

The conversation showed me that the guy valued himself and his company more than its actual worth. Even though he knew he was in the wrong. He had an inflated ego.

And that’s a sign that you’re a liar.

ALTCOINS LIE ALL THE TIME TOO BUT DIFFERENTLY

They lie about their value on the crypto price charts. Some altcoins will tell you that they’re worth pennies when they’re actually not.

The digital currency market is myopic. And since the market is comprised of traders like you and me, we are myopic. We read what’s in front of us and make our decisions based on it because the future appears blurry to us.

We’ve all been duped by the ones that had an inflated price. We trusted them. As we watched their value diminish to nothing, we kept hoping that they weren’t lying.

Research is how we can make the future appear clearer. That’s how we can unravel the mystery of altcoins – the ones that are promising and the ones that will stab us in the back.

Most of the traders don’t take their time to do research, understand the scope of an altcoin, and make an educated guess about the true value of altcoins. And this allows the altcoins to continue lying.

But now it’s time to pull ourselves by the bootstraps and start doing proper coin research.

Let’s find the ones that are undervalued, that are worth more than what crypto price charts list against their name. If you can find a few such altcoins for your crypto portfolio, you will make enough money to safeguard your whole future.

So how do you find altcoins on cryptocurrency exchanges that are saying they’re a failure when they’re actually not? Here are some of the characteristics:

1. Best Altcoins Solve a Real-World Problem

The viability of a good altcoin is rooted in its blockchain based utility. The purpose of the altcoin should be clear, with supporting secondary objectives.

If a digitized asset is first of a kind in solving a real-world problem, it can have a strong first-mover advantage like Bitcoin. Similarly, if an altcoin is a one-of-a-kind, you shouldn’t ignore it.

You can find out which problems the coin is set to solve in the coin’s whitepaper and on the coin’s website. You can also ask around on Bitcointalk forums, on the coin’s Telegram group, or coin’s social media pages.

It’s important to note that a coin’s use cases evolve as it matures. The more practical use cases an altcoin has, the higher is its potential to be successful.

A good example of this is the ETH coin which supports the Ethereum blockchain. The Ethereum network allows the creation and execution of smart contracts, which can facilitate the exchange of money, content, property, shares, or anything of value. Ethereum allows blockchain developers to create and then deploy decentralized applications called Dapps.

2. Best Altcoins Have Excellent Operational Attributes

From the whitepaper, you can determine what an altcoin’s Consensus Mechanism is – proof-of-stake (PoS), proof-of-work (PoW) or something else. You can also determine what the altcoin’s mining rewards are.

If an altcoin is very easy to mine or a PoS reward is huge, the cryptocurrency market will be flooded with large amounts of this altcoin. This could possibly create inflation and keep the price of the token down for a long time and possibly forever.

An altcoin’s governance structure can be centralized or decentralized. Although cryptocurrencies are meant to be decentralized in nature, certain altcoins such as Ripple, NEO, and Cardano have done well with their centralized framework.

Make sure the whitepaper states why the development team has decided to go either way with the governance structure. If it doesn’t, it might be worth staying away and investigating till you’re clear about the reasons behind its structure.

3. Best Altcoins Have Good Trading Characteristics

Top cryptocurrency exchanges like Coinbase, Kraken, KuCoin etc. make the development team go through a lot of exercises. They might also charge a small amount of money pay for the coin to be listed on the exchange. If the coin is listed on these reputable exchanges, there is a higher chance for liquidity, legitimacy, and the coin to become stable in the near future.

Top exchanges support larger trading volumes. This means that the slippage will be smaller and so will the spreads. You’ll be able to sell or buy the altcoin faster at the price that you want.

The daily trading volume of the coin is an important factor to determine whether it will be a good investment in the long term or not. This is extremely important for liquidity and popularity. The price of altcoins with small trading volumes can be manipulated by whales. A small trading volume also limits the possibility of such altcoins getting listed on reputable cryptocurrency exchanges.

An altcoin that has a huge upper limit or no limit at all on the supply of coins is likely to suffer inflation and low prices per coin. You can find out about the supply of coins in circulation on CoinMarketCap. There you can also check out the charts for signs of pump-and-dump schemes or trading by bots.

But if the coin isn’t listed on Coin Market Cap, that is a red flag in itself. The only exception to this is when the coin is relatively new and your research has proven its legitimacy and future listing on Coin Market Cap. In such a case, the altcoin will be a very good trading opportunity.

4. Best Altcoins Are Supported by Known Teams and Timely Development Cycles

You can find out about the altcoin’s development team from their website or social media pages. If the developer or development team is dubious, unknown or questionable, people will be reluctant to purchase it. This will lead to a low price than its actual worth.

If your research has shown that the development team behind the altcoin is good, trustworthy, and dedicated to the coin’s blockchain projects, you can invest in it and cash in when the price reaches the token’s projected higher value.

A good development team has a good reputation and track record. They make commits, implement new bugfixes, and add new features to the coin’s functionality frequently. You can determine more about the development activity through the coin’s website, newsletter, social media pages, or GitHub.

The success and failure of an altcoin are heavily dependent on the competence of the founding team and initial backers.

There should be a well-defined roadmap and the team should be following their timeline as much as possible.

5. Best Altcoins Have a Sensible Community and Following

To understand how the trading community feels about the coin, you can frequent the altcoin’s YouTube videos, blogs, social media, Telegram group, Slack channel, and Bitcointalk forums.

There, look at the comments and responses made by the community to updates and announcements made by the development team.

From the topics of discussion there, you should be able to gauge the temperament of the community. If the discussions are filled with people who’re talking about scams, pump-and-dump schemes or other worrying stuff, you should be careful about the coin as well as its community. Instead, if there are constructive conversations, debates, and healthy criticisms, you can delve deeper.

6. Best Altcoins Attract the Best Investors

The project should be backed by known investors and advised by credible advisors.

Big-time investors make any investment after doing proper research. In fact, they have several people working for them to do the research. They also use data from research companies around the world to understand the full scope of the solution an altcoin is presenting.

Once a popular investor gets on board you can be sure that the altcoin is viable and relatively safe for investment.

This is not to say that popular investors are never wrong. But their vote of confidence is a factor that shouldn’t be ignored.

7. Best Altcoins Have No Legal Hassles

Keep your eyes on the news for any legal troubles an altcoin might be in. Legal barriers can retard the timeline and cost more for the development team to continue working on the project.

Due to ever-changing government stance on cryptocurrencies, there might be some ban or other restrictions posed by some government.

This could result in a small depreciation in the value of the altcoin now and a huge depreciation later in the near future. Such an unstable coin isn’t worth investing for the long run but you can trade it for the short term.

There will be a window of opportunity to buy the dip whenever the value of the token decreases. You can put out your buy orders for such a scenario and sell when the price of the altcoin recovers.

Conclusion

With proper research, you’ll be able to determine accurately if the current price of an altcoin has indeed factored in the altcoin’s viability and future plans or not.

You will also increase the odds to identify whether the coin is legit and has good fundamental value, a good team, good prospects, and an active community about it; whether the coin is a copy, a scam, a pump and dump scheme, a me-too.

You will increase the odds to be able to tell whether the underlying value is overestimated or underestimated and whether the current price is realistic or out of whack.

With proper altcoin research, you can win.

Hopefully, you have enjoyed today’s article. Thanks for reading! Have a fantastic day!

Richard Baker

Live from the Platinum Crypto Trading Floor.