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5 Signs a Cryptocurrency Has Potential
When you hear the word cryptocurrency, do you think of digital money that can be easily exchanged? What about decentralized, secure, and not controlled by any governments or banks?
If your answer to either question was yes, then you’re well on your way to understanding the world of cryptocurrency. However, if you’re not all that familiar with this booming industry, this guide will provide more information about how cryptocurrencies work and how they compare to traditional currencies.
1) Good Marketing
A cryptocurrency with good marketing has a better chance of being successful. If people don't know about a coin, they can't invest in it. Good marketing doesn't just mean spending a lot of money on ads but also making sure the right people know about the coin.
There are many ways to promote coins and there is no one-size-fits-all solution for every project. For example, Steemit takes advantage of social media by sharing posts from its site on Facebook and Twitter to attract new users.
Another great way to generate interest is through creating and/or promoting your own YouTube videos. YouTubers like PewDiePie have made careers out of playing video games online and documenting their thoughts as they go along, so why not get them interested in your project?
2) Many Promising Partnerships
One of the most important things to look for when considering a cryptocurrency is partnerships. A strong partnership indicates that the team behind the cryptocurrency is working to make it successful. Some promising partnerships to look for are major exchanges, businesses, and even other cryptocurrencies.
A Well-Known Team (four sentences): The team behind a cryptocurrency can often be just as important as the currency itself. A well-known and reputable team gives credibility to the project. Furthermore, a team with experience in blockchain and cryptocurrency is more likely to be able to navigate the volatile world of crypto.
3) Active Developers and Contributors
One of the most important aspects of any cryptocurrency is the team behind it. A strong team will actively develop and contribute to the project, as well as provide support to users. They should also be responsive to community feedback.
For example, Monero’s developers are always working on improvements that benefit its users. In addition, they regularly respond to questions about the project's development in their blog posts.
4) Fairly Valued Market Cap
A cryptocurrency is fairly valued when its market cap is in line with its underlying technology. If the market cap is too high, it could be overvalued and ripe for a crash. If the market cap is too low, it could be undervalued and have the potential to grow.
Here are five signs to help you determine if a cryptocurrency is fairly valued:
1. The price of the cryptocurrency is in line with its peers.
2. The market cap is in line with other similar cryptocurrencies.
3. The technology behind cryptocurrency is sound and has the potential to grow.
4. The team behind the cryptocurrency is strong and has a good reputation.
5. There is demand for cryptocurrency from buyers and sellers alike.
5) Large Addressable Market
A cryptocurrency needs to have a large enough market to sustain itself. The larger the market, the more potential for growth. For example, Bitcoin has a market cap of over $100 billion. This means that there's a lot of room for the currency to grow. Unlike cryptocurrencies with smaller markets, such as RaiBlocks which has a market cap of less than $25 million. It may not seem like much now but if RaiBlocks grows at the same rate as Bitcoin it could be worth billions in the future. Scalability:
A major issue with cryptocurrencies is scalability, or how many transactions can be processed per second without crashing the network or slowing down transaction times. One example is Visa which processes around 24000 transactions per second on average and usually handles peaks of 47000 transactions per second while bitcoin currently only handles 3-4 transactions per second on average and up to 7 during peak hours.
Conclusion
In the current cryptocurrency landscape, there are hundreds of digital assets to choose from. With so many options, it can be difficult to determine which ones have long-term potential. However, by looking for certain telltale signs, you can increase your chances of finding a winner.