How to target “Promising Coins”
Investing in cryptocurrency can be very risky and complicated. With over 1600 alt coins/tokens in circulation through out the globe, it’s hard to find the “right coin.” Investors should take the following tips into consideration:
Coin Inception Date
This factor is important when considering purchasing a “coin.”By simply typing “list of cryptocurrencies 2009-2019” into your favorite search engine, a comprehensive list should appear that provides chronological data regarding alt coin release dates.
When I first saw an entire listing of inception dates in April 2018, I immediately noticed a slight correlation amongst coins reaching their 5th year of existence. These particular coins were actually soaring! I noticed right away that “coins established in 2014 are leading the pack in 2018.”
DASH, NEO, XMR are just a few examples of altcoins that were conceptualized just five years ago. It’s not a coincidence that Bitcoin starting soaring when it hit the 5th year mark. Bitcoin’s Initial Coin (ICO) offering took place in January 2009.
I honestly do not have any quantitative data that supports this theory. However, I do encourage “my followers/techgang” to prove me wrong. I want to be clear. Every coin that came out in 2014 will not perform well. Some “2014” coins are not in existence today. However, the next tip will further support why DASH, NEO and XMR are doing so well.
Blockchain Protocol Systems
Each alt coin is composed of a hash algorithm coded in a specific programming language, with each algorithm ran by a specific protocol. The most popular protocol systems are “PoW” (Proof of Work) and “PoS” (Proof of Stake.) Any given blockchain system has its own protocol. Certain conditions have to be met in order for a “new block” of code to be added to the system.
A proof-of-work (PoW) system (or protocol, or function) is an economic measure to deter denial of service attacks and other service abuses such as spam on a network by requiring some work from the service requester, usually meaning processing time by a computer. (Wikipedia, 2018)
“PoW” requires the miners of the coin to complete mathematically problems before they are rewarded for their work. Traditionally, once a miner completes an equation they are rewarded a new “block” in the system for their time. They are also rewarded very handsomely with digital currency.
Proof of stake (PoS) is a type of algorithm by which a cryptocurrency blockchain network aims to achieve distributed consensus. In PoS-based cryptocurrencies, the creator of the next block is chosen via various combinations of random selection and wealth or age (i.e., the stake). In contrast, the algorithm of proof-of-work-based cryptocurrencies such as bitcoin uses mining; that is, the solving of computationally intensive puzzles to validate transactions and create new blocks. (Wikipedia, 2018)
PoW and PoS are just two examples blockchain protocol systems. Please following this link for information on other protocols.
The “Web Developer” in me also noticed something very interesting when I first discovered the crypto currency listing. I noticed coins that are a direct “clone/copy” of Bitcoin, have tendency to thrive! Github allows developers to store repositories on an open-sourced system. Essentially, the Bitcoin algorithm is open to any account holder, including me!
Developers can request to contribute to different algorithms by making a copy/clone of the original source code. Once the algorithm/source code is cloned, developers can download the data into a repository on their own device.
Once downloaded the developer/engineer can make modification and eventually “fork/send” the updated algorithm back to the original repo for approval. The term “fork” is used on Github in order to forward the “modified cloned” repository of code back to the original repo and networks server.
Dash is a bitcoin clone!
Proof of Burn
Coins that participate in periodic coin burning, tend to perform very well. Proof of Burn is protocol some alt coins follow but not all. Every “so often”, a coin will destroy/burn coins from its supply by taking them out of existence. This practice is performed in hopes of increasing the value of the coin.
By limiting the supply, in theory, the demand for the coin will rise over time. Case and Point: BNB and ORL are great real life examples that prove periodic “burnings” can increase a coins value overtime. However, I want to be clear, just because a coin participates in burning, does not mean it will increase in value after every burn.
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