If you've been reading along with this blog, so far, you'll know that I accumulated, converted and stored a lil modest $50 as Ethereum and Lumens, which, IMHO, is/was pretty safe and smart.
But, the fun of playing is...playing.
Since I had only a small amount of crypto to play with, but definitely wanted to play, I decided to learn some about some low cap, inexpensive, and new coins.
Yanno, the kind that start out cheap (or free, even, as airdrops), and can either be sold/converted to other coins (for more!), or, pending a decent project, hodl…"to the moon" (hold 'til they increase).
Or, in parlance: find some altcoins that could either be moonshots (yay!)...or shitcoins (*sad trombone*) -- and, hopefully, how to tell the difference.
Here's the thing. It's super easy to create a blockchain currency. If you spend more than 3 seconds looking at crypto trading sites, you'll be overloaded by the sheer number of currencies.
And, if you return to the same site 3 days later, be shocked at how few of those same currencies are still listed (OK, I'm exaggerating. But you get the point).
Now, this is the way of things. I mean, Bitcoin wasn't worth much at first. Whether by vision or luck, folks that got in early...well, you know the rest. It "went to the moon." The hope is to find the next currency that will do that: a "moonshot."
Sometimes, currencies are created, literally, to do what's called a "pump and dump," existing only to be orchestrated to flood the market, spike in price, and get sold at the price spike, before fizzing into oblivion*.
For obvious reasons, that's the classic "shitcoin," though, there are many shitcoins that start out as hopeful, honest, hard-working contenders on the market, with solid, interesting, funded projects behind them that still pfffffffft out.
(*folks often refer to these as scams. They are. Sorta. They take advantage of the emotions we hold towards money, our FOMO, and our simple greed. Something for nothing. I don't love "pump and dump" or anything, but I feel like they just reinforce the notion that you gotta do your research, you have to follow your own gut, and, well, sometimes we are all going to be dead wrong.)
If you're going to play day trader, and want to wade along with me in the muck of altcoins, here's the list of questions and red flags that I gleaned from pages and pages and articles and common sense:
1. Is the coin being distributed in an obscenely large, free airdrop? Airdrops are rad. But serious projects are going to, logically, airdrop only enough of the coin to make you interested. They aren't going to blow their wad in pre-mine giveaways. It doesn't make sense. Compare the total amount of the coin that will be created (which should be available somewhere, white paper, FAQ, site, something...if there's none, that's a red flag in and of itself) against the # that's dropped.
2. Do you have to refer a million peeps or enlist on social media, yadda yadda to get the coin? Nothing wrong with referrals and spreading the word. But. And. There are referrals and then there is data mining.
2a. How quick is the payout if you do said promotion on their behalf? Immediately to a few days = more good/some vague future time = less good.
3. Is the project good, interesting, or does it solve a problem? Pay attention, particularly, if the project addresses a big pain point in the world. It's no guarantee, of course, that it will get adopted**, but it could be a good sign.
3a. **Is there a plan for adoption or roll-out? Do they have partnerships with known players (also no guarantee, but better, better)? Has there been an ICO?
4. Is there a flashy site, but almost nothing on the actual project? Then it might be a storefront for a pump and dump, yanno? Seriously.
5. Folx may argue me this one, but...spelling errors. I'm not talking one, here and there, or awkward usage because a company is not, foremost, an English speaking one. Honestly, and YMMV and DYR, but a serious project with ambitious goals and plans will pay someone on fiverr, at the very least, to do a proofread. I don't care how compelling something sounds, how slick a site, how sweet a logo, etc. etc. If their materials are rife with simple-to-spot errors, it smells like a quick job. Run.
Do you have any tips to add? Comments and suggestions are worth their weight in...yanno.
And don't forget to follow me, so you can be notified about my next post. It'll be a fun one, where I wrestle with a coin I'm getting fond of. I'll talk through why it's probably equally a moonshot and a pile of shitcoin.
Yep. At the same time.