The cryptocurrency sector is very difficult to follow with the large number of new projects that arise daily, this makes the task of the investor much more complex by having to analyze hundreds of cryptocurrencies where to place their money.
At the moment, Coinmarketcap has a total of more than 2,100 coins listed, being so large the amount that its website takes to load if we do not have a powerful computer. The vast majority of people only know a small proportion of them, and we can’t blame them, they are the most popular and the ones we have the most information about.
Diversification is a fundamental aspect when investing in cryptocurrencies, but we can not remain passive and expect them to offer results on their own, it is necessary to continue to be informed about all their developments and act if necessary.
Another tip is to keep the information organized close to us, so that when a new news story emerges we can consult the documents and not have to do all the research from scratch again. It may even be a good idea to keep a journal for each coin in our investment portfolio.
But now the question focuses on knowing what we have to look for in each cryptocurrency and how to manage that information so that it is useful to us.
In this guide I am going to teach you how to investigate a cryptocurrency from an investor perspective, starting from the example of NEO, although it could be any other. NEO has the particularity, just like Ethereum, which is a platform where people can develop their own blockchain projects. This implies that its success lies in the adoption and the ventures that are created on it.
The first thing we need to do is collect some dapps and upcoming ICOs in our document. For this we can find a page that takes care of this task, and in the particular case of NEO we can use this and this. Given the practical purposes of the article, I will only list a few so as not to go too far. Steps to analyze a cryptocurrency1. Add identifying information for each section
The first thing we must do in our document is to add the titles of the sections, which indicate the information contained in each of them.
2. We list the contributors and how they relate (Dapp/association/ICO)
Elastos (ELA): Strategic collaboration with NEO)
The first internet operating system that seeks to create a decentralized internet thanks to blockchain.
3. A summary of the project
Now we must write a brief summary of what the project does and how cooperation can help both achieve their benefits:
NEO will be compatible with Elastos and will also provide support for NEOVM, allowing the development of smart contracts with programming languages known as C# and Java. Elastos will be an operating system for the blockchain, while NEO can help developers quickly create blockchain applications.
The combination of both can connect different developers around the world, creating a powerful ecosystem for creating applications. All in terms of creating a smart economy.
4. We include other relevant information
We can also include links to more information, such as social networks, blogs or Reddit groups, so we can quickly track new developments with the project and update our documents if necessary in the future.
This is a guide that does not pretend to be very extensive, so we will not do an in-depth analysis of other related projects. But in the event that we decide to investigate a cryptocurrency we must list any other type of association and perform the 4 steps described above. Let’s look at another example with Ontology:
Ontology (ONT): Partnership with NEO
Ontology Network is a blockchain that combines distributed identity verification, information sharing, data collaboration, procedural protocols, communities, certification, and various industry-specific modules. Thanks to all this, it builds an infrastructure for a point-to-point trusted network that is cross-chain, cross-system, cross-industry, cross-application, and cross-device.
NEO will be the leading provider of digital asset services for clearing and settlement in Ontology. There is no contract between these two projects, although it does have an established partnership. In the roadmap details that in future business scenarios Ontology will conduct ICO in NEO.
All this is convenient to do for all projects, whether dapps, associations or ICOs. For example for NEO it would be convenient to include an analysis of The Key, Qlink, PeerAtlas, Red Pulse, High Performance blockchain, etc. In this way we will be updated of all the projects that are launched in the NEO blockchain and we will fully understand how they interact. Optional: a risk analysis or SWOT
As an option, although it is recommended, we can do a risk analysis or SWOT for each of the projects. This includes those aspects that can improve or harm the ecosystem of our analyzed cryptocurrency, in this case NEO. If, for example, Elastos ends up being a scam, then this would seriously affect NEO. However, if it is as revolutionary as it sounds, then NEO could benefit greatly.5. Perform the same process (step 1 to 4) for other contributors
Once we’re done analyzing steps 1 through 4 of a partnership with our main project, it’s time to repeat steps 1 through 4 with others. In the case of NEO, City of Zion is a major contributor to the ecosystem, so let’s look at an example:
We follow steps 1 and 2, where we summarize who they are and what their purpose is:
City of Zion (CoZ) is an independent group of open source developers, designers, and translators trained to support the CORE and ecosystem of NEO BlockChain. CoZ operates primarily through the Slack community and CoZ Github, central places where the community shares knowledge and contributes to projects. CoZ is not a corporation, nor a consulting firm or a devshop/for-hire group.
Step 3: Once we’re done with the summary it’s time to move on to making another one regarding infrastructure and understanding its actions and operational efficiency:
City of Zion claims to have a low barriers to entry, the process is as follows:
Some tasks they perform:
- Unit testing: A continuous effort to test the code in parts for the proper functioning of its modules.
- Integration testing: Tools for automated testing, performance metrics, and functionality validation in private test networks.
- Continuous integration: Automated cross-platform testing of all pull requests on GitHub.
- Deployment pipeline: Automated tools and processes to ensure fast and reliable updates to code changes.
- New implementation of C# (NEO2): Improves code quality, speed, and testability.
Step 4: We add all the relevant CoZ links and information, as we did before:
In this case I have not found an updated roadmap, so it tells us that this group is not participating much. That, too, is partly valuable information.