Prior to committing to any crypto project, it is imperative to conduct your own crypto research — commonly referred to as DYOR (Do Your Own Research).
But what does ‘doing your own research’ truly involve? Where do you initiate the process? Which sources can you rely on? And how much research is deemed sufficient?
Devoting time and energy to comprehend your cryptocurrency investments is the foremost step toward becoming a successful in the crypto realm. However, the process is not always clear-cut. This guide aims to assist you at every stage of the research journey.
Identifying Reliable Sources of Information
Spending hours on crypto research becomes futile if your information sources lack credibility. In the crypto space, opinions abound from various individuals, irrespective of their expertise. It is crucial to exercise discernment in choosing whom to heed.
Consider the following factors when assessing a source:
Industry Reputation: Are they well-known in the industry? Evaluate their track record for insights into their reliability (examples of reputable sources provided later on).
Audience Size: What is the size of their following? A substantial following often indicates more reliable information, as individuals with a large audience have more at stake when sharing information.
Website Legitimacy: Is the website a legitimate and established source? Opting for well-known news sites is a good practice to ensure information quality. However, skepticism is essential, even with reputable sites.
Financial Interests: Is the person providing information being compensated? Never assume that paid advice is impartial. Many crypto influencers receive sponsorship from cryptocurrency exchanges. Look for individuals that are transparent and honest.
Balanced Perspective: Is the advice or opinion balanced? Assess whether the source presents both sides of the story. The best crypto sources acknowledge the nuances, providing a comprehensive view with both pros and cons for any given project.
Explore Diverse Perspectives and Viewpoints.
As time passes, you’ll likely discover favorite personalities on Twitter or YouTube. While establishing trust and connection with someone is beneficial, relying solely on one source is a definite recipe for poor investment choices. No individual possesses all-encompassing information, and everyone is prone to errors at times.
Approaches to Crypto Research (DYOR)
Study the Whitepaper
A whitepaper serves as a comprehensive document elucidating the technology underpinning a blockchain project. Typically authored by the project’s developers.
For an effective start to crypto research, delving into a project’s whitepaper is recommended. These documents can be found on the respective project websites; a simple Google search using the syntax “[project name] whitepaper” is usually sufficient.
It’s important to note that not all projects provide a whitepaper. However, the absence of one does not necessarily indicate a lack of investment potential. In such cases, conduct additional research on the team and their background before considering investment.
A well-crafted whitepaper outlines how a company intends to leverage blockchain technology to address industry challenges or advance their product.
Research the Developers
The developers constitute the driving force behind the scenes, responsible for actualizing project goals. Gaining insights into the developers is a crucial method to assess a project’s potential for success. Here are some key inquiries to make about the team:
- Are the developers well-known or esteemed in the industry?
- What is their track record in previous projects?
- How promptly does the team address questions and inquiries?
- Is the team publicly recognized?
- Do they have a functional product, and if not, when is its expected release?
- Are there credible partnerships supporting their commitments?
Examine Economic Activities
Additionally, it’s essential to analyze the economic activity of the project. It’s self-evident, but it’s wise to reconsider investing in something that shows no signs of strength
To assess a project’s economic activity, visit platforms such as CoinMarketCap or CoinGecko. There, you can examine the price chart for any fluctuations and overall activity.
Circulating Supply
The circulating supply of a cryptocurrency represents the accessible coins actively traded. Often confused with the total (max) supply, which includes mined but unmined coins. Knowing a coin’s circulating supply is vital:
- User Adoption: Indicates coin acceptance and trading activity, vital for the project
- Comparative Analysis: Allows comparison with other projects.
Market Cap
Liquidity and Trading Volume
In the realm of finance, liquidity denotes the ease with which an asset can be purchased or sold. A liquid asset is one that can be readily sold at its prevailing trading price, and a highly liquid market boasts ample buyers and sellers at any given moment.
Trading volume, on the other hand, represents the number of shares, contracts, or currency units exchanged within a specified timeframe, typically a day. It provides insight into the total value traded during that period.
When it comes to cryptocurrencies, well-established coins and tokens are likely to exhibit high liquidity, while those in their early stages may be considered illiquid, featuring low trading activity and potential challenges in selling these assets.
Attend Cryptocurrency Meetup
Cryptocurrency NZ orchestrates meetups across 11 cities in New Zealand, emphasizing our commitment to fostering crypto communities. Engaging with these communities is an excellent strategy to enrich your research, receive valuable advice, connect with like-minded individuals, and stay abreast of the latest developments in the crypto sphere.
Plus, who knows – you might even make a connection so profound that it leads to a “marriage by smart contract”!
Cryptocurrency NZ | New Zealand Crypto Meetups
On the last Wednesday of every month, Cryptocurrency NZ runs a series of in-person, unregulated meetups across NZ where Kiwis come together to discuss all things Bitcoin, Ethereum, cryptocurrencies, financial liberty, NFTs, DAOS and beyond.
Exploring Social Media Platforms
Cryptocurrency information is highly time-sensitive, and for beginners, social media is often the ideal starting point. We’ll explore several primary platforms, with YouTube, Twitter, and Reddit ranking among the most popular.
A significant aspect of the cryptocurrency realm involves staying ahead of the crowd, making Twitter an invaluable resource. Unlike YouTube videos, where information might lag due to filming and editing time, Twitter allows you to access real-time announcements.
Here are a few Twitter tips:
-
Direct Interaction: Utilize Twitter as a platform to directly engage with influential figures you follow and respect. Searching for new tweets related to a specific coin is easy—simply use the $ sign followed by the coin’s abbreviation (e.g., $BTC).
-
Diversify Your Following: While following major players in the crypto space is beneficial, consider adding more niche accounts to your list.
-
Rumor Mill Exploration: For those seeking speculative rumors that could lead to significant gains, be prepared to dig deeper. Identify individuals unafraid to make bold predictions, and evaluate their following and reputation to gauge their trustworthiness.
Facebook groups provide an excellent starting point for beginners, especially for those in specific regions. Our local Cryptocurrency NZ Community Group offers valuable support and engagement for New Zealanders seeking an active cryptocurrency community.
Reddit serves as another prominent public forum for cryptocurrency discussions. Engage in real-time conversations with actual individuals and receive prompt answers to your questions. While these forums may feature individuals promoting the coins they currently own, the upvoting system for comments provides an avenue to gather valuable insights.
YouTube
Cryptocurrency NZ Final Verdict
In the realm of crypto, the path to wealth lies in caution and thorough research. Explore reliable sources, assess economic indicators, and understand the market dynamics. Vigilance is key—avoid the FOMO rush and take the time to make informed decisions.
Building wealth in crypto is a journey, not a sprint. Stay patient and success will follow.
Stay humble and stack sats
