With thousands of cryptocurrencies in the space and hundreds seemingly added every day, it’s difficult to know where to start where looking for a new project.
Whether a project is brand new to the scene, or simply new to you it’s important to have a game plan when it comes to researching projects. The next time you see a social media post for a project, or get a text from a friend about a coin try these simple tips in researching new cryptocurrency related projects.
#1 No Coin In Mind
In the opening paragraph I referenced situations where you might hear about a cryptocurrency for the first time, but if you are reading this and don't have a specific coin in mind you may want to check out CoinGecko (pictured) or CoinMarketCap. For this guide we will use CoinGecko*
CoinGecko's home page has a few tabs you can explore. You can check out recently added coins and maybe get the jump on something new, or sort "all coins" by metrics like volume or market cap.
Once you have an interest project in your sights, you can start your research.
(*We like CoinGecko - you can see our article celebrating their entrance into the top 500 sites in the world)
#2 Continuing with CoinGecko
Staying with CoinGecko, once you click a certain coin you will see a dashboard full of juicy information nuggets.
You'll notice on the right, the coins fundamentals like market cap, supply, price and 24 hour volume. These can tell a story in themselves; coins with lower market caps have the potential to grow more, but may be more risky. Coins with high supply, you may have to temper your expectations of growth. Coins with high 24-hour volume relative to their recent days volume may be receiving extra attention recently.
The section on the left can lead you to the next step in your research, first up the official website.
#3 Project’s Official Website
On CoinGecko, you should see the coin's official website. If CG doesn't have the website yet it may be best to steer clear - this means that either the project doesn't have an official website yet, or it is so new that CoinGecko doesn't know much about it.
Once on the website, look for import "must-haves" and common red flags.
Does the site look professional? Does the content look unique? You can use the same popular free tools you use to check the uniqueness of your college essay before submitting to check the content of the website. If all the content is unique, that is a good first step.
The Team - Most project's will have a section on the people the make up the team. If the project's team is listed as anonymous, or they don't link to their individual Linkedins you may want to steer clear. Additionally, if the team has Bill Gates or some other major figure as a team member and you can't find proof elsewhere on the internet, you know something is up.
What does the project claim to do? Is it attainable? Does it need the blockchain to do that?
Partnerships - Does the project have any verifiable partnerships? This can be a sign of stability in a new (or new to you) project.
Much like you would evaluate a website before hiring a service or buying a product, get an overall "feel" of the website before moving on to further steps. Trust your gut if it doesn't feel right!
#4 Reddit can be powerful
First try and find the project's official subreddit or Reddit. Many times the url will be Reddit.com/r/EXAMPLECOIN - but you may need to use the Reddit search to find it.
Does the subreddit have a healthy amount of subscribers? Is the discussion objective?
Feel free to post a new question on the subreddit and gauge the responses.
Aside from the official subreddit, you will want to just do a blanket search on Reddit for the coin. See what the most active posts are discussing the project on other subreddits.
Ideally the project will have lengthy, objective discussion where you can weigh the pros and cons of the project.
#5 Telegram is the wave
In the crypto community, Telegram is king when it comes to discussion. Nearly every project has their own Telegram channel and you can learn everything you need to know about the coin's community right there.
Once entering the Telegram channel, take a few minutes to scroll up and read a few days worth of chats (skim here and there). Is the discussion adult and civil? Are objective questions and discussion encouraged? It's a positive sign when the chat encourages you to ask tough questions and even be critical when searching for information.
*note* You can usually find the Telegram link on the official subreddit. Warning don't ever trust anyone on Telegram who DMs you looking for personal information or anything related to your wallets, coins or identity.
#6 Explore The Official Contract
If the project you are curious about is an Ethereum based token (many are these days), you will want to check out the official ERC-20 contract on Etherscan.
Etherscan is the leading, trusted Blockchain explorer for Ethereum - it's essentially a search engine where you can search and confirm metrics and transactions on the blockchain.
You can safely get to a coin's contract (be careful of fake contracts!) by heading back to CoinGecko and clicking "Etherscan" on your coin of choice's sub-page.
I generally use Etherscan initially to see how many "holders" (active wallets with coins), there currently are for this coin. If I see a coin that passes all my tests, but has a low wallet count, this may mean that the coin has some room to grow.
#7 In closing…
In closing, it is important to note that their is no one right way to research a cryptocurrency project. Whatever you do to investigate a project, be sure to stick to your guns. There are many instances when fear of missing out may tempt you to skip your steps and make a decision based on impulse.
There are many ways to research a coin, but the above list is a great start.
Be sure to utilize Google, Youtube, social media and more to get an overall "feel" for the project. The more data points you have the better. Remember to make data based decisions and not fear of missing out (FOMO).
Take everything with a grain of salt and if somebody is excessively promoting a coin to you, ask yourself "why?".