I just read this post by @ivonne. The post is in German, but basically she has been informing herself about cryptocurrencies for two months now, yet it all feels like a jungle to her. So the question is: how do we know what to go after in this hunt for profits .
I chose to use this picture of a lion I took in the Masai Mara in Kenya because she is currently looking at her prey trying to figure out how to make a kill.
Every step she takes and decision she is making is key for success. As an investor I feel the same way about the cryptocurrency market. So let me tell you some of the thoughts I have.
Ivonne is asking two very good questions:
- Do we need to evaluate cryptocurrency differently
- What are the criteria of evaluation
Keep it simple
To me live is always simple and having a very basic model and framework is always very important to be able to navigate successfully. As such there are only two things that are relevant to me on the highest level when making investment decisions:
- What is giving this project/coin/blockchain value
- Price action: What do the charts look like and in what kind of market are we at the moment
If I cannot figure out what gives anything value or where this value is coming from then I have either not made my homework correctly, or I have mis-judged the opportunity or the thing should not be invested in because it probably does not have value.
Even if a project is amazing I do not want to enter into a position if it is at the top of a bubble. When a coin crashes 90% after I buy it will be hard for me to make winning investments. Instead I should pick it up after such dips and then profits should come much easier. Likewise the market as a whole is often in a bull or bear market and such should be taken into account before entering positions.
When we listen on TV to experts and their opinion about crypto we often hear one camp advocating for the "groundbreaking technology" and the other side calling it "just another bubble".
The thing is to understand that not one or the other is not automatically right and wrong, but that both may be right. In such a case it would be crucial to invest at the right time.
We need new metrics
Sorry but there is not automatically a profit, cashflow, P/E ratio etc. that you can use to figure out if the price is right. If this was an easy market everyone would be in it and you would not be able to get 100x returns within one year (i.e. like ETH went from $8 to over $1400 in about one year).
These metrics may not exist so that you have to invent them or sometimes even metrics may not tell the whole story. Think about Apple in 2007, when the iPhone was invented. If you were really smart you could have realized that this would change the entire phone market and change what the internet will be. However there is not really a math formula that you use to come to such conclusion. You must use your intelligence and experience. That neural network inside your head.
Respect the nature of this technology and limitations of your brain
The truth is that such revolutionary technologies don't come around that often. I personally believe that blockchains are a new invention of organization that allow us to be production in a entirely new context. Such happens very very rarely and as a result we are not adapted to deal with it.
As a result many wall street analysis and TV personalities look at the bitcoin charts and apply their standard analysis patterns to it. That will work in many ways but misses the big picture at the same time. We are adapted to see everything in patterns and reference everything with anything. That is how our brain works. And in nature this works well because it adapts over millions of years and usually does not change very much.
In other words naturally we are not very adapted to dealing with things we don't know. At the same time we as a species are the one that has learned to adapt the most. We need to use those skills to change our frame of reference as agile as possible to quickly learn what this is and how it works. For this we need to be very open minded because the connections will not be apparent to us, because we have never seen and drawn them.
So while keeping the soft factors in mind here are some metrics I like to use:
- The Mayer Multiple
- Transaction volume
- Chatter such as messenger group activity, forum users, and twitter activity
- Transaction volume (relative within)
- Growth (relative within)
- [NVT Signal ] (http://woobull.com/nvt-signal-a-new-trading-indicator-to-pick-tops-and-bottoms/)
Criteria of evaluation
I think that how we evaluate things must be specific to a project. I think we would evaluate bitcoin, ethereum and steem very differently.
Maybe certain coins that compete in one markets can be evaluated similarly i.e. eos, ada, lsk and eos etc. or all the privacy coins and so forth, but overall it is important I think to look at these things evolve separately.
Once this space is older this may change but for now I think understand their value will often be unique, at least for the projects that matter.
Our lioness also needs to find her specific path to success.
That said we can look for a few general things:
- What is the mission (how is this thing going to change the world for the better)
- Design: How is this mission accomplished technologically. Are all the right components available that is required to be successful. Is this solution comprehensive or does it only solve parts of the problem.
- What is the team: are there capable people driving he success and what is the incentive structure that supports good performance. Do they have a roadmap and vision?
- Innovation: Can this be done without a blockchain and are the new advantages from blockchains leveraged in a new way that others do not. Is there some copy cat going on or is this true innovation. If stuff is copied is the rest innovative enough to make it viable. Does this require a company and should not actually be crypto project?
- Coin and incentive structure: Does the coin system support everything, drive the mission and keep it all together or is it just a get rich scheme for a company or founders?
- Infrastructure and onboarding: Is there some infrastructure in place to allow users to onboard or incentive structures that will market the coin and keep it growing?
These are just examples and may need to be adjusted, but may be a starting point to analyze if something has value
Summary
As you can see I do not have a standard way of analyzing crypto projects. But there are some things I look for. In the end however it comes down to do I believe this is a truly viable project or thing that can change the world. And if so when is a good time to get in.
I think the good news is that we have so much innovative energy in this space that tons of truly great things are being built. And with this volatility there are always opportunities to find good entry points to enter as well as taking some profits.
Our lioness was successful and killed a Zebra. The above is the same lion all three times and I was lucky to be able to shoot her at the start during and after the hunt.
I wish you much success in your endeavors as well.
@knircky! For a long time I have't read so reasonable view on crypto sphere. So i must contribute some of my thoughts about evaluating cryptos.
Definitively we have to develop new approaches. As you mentioned open mind is crucial factor. There is so many new phenomena to explore in crypto space that we have put all our effort in spotting new patterns never to be discovered yet. More we can detect the better will go along in coining our profits.
Thanks for finding this NVT signal thing. I think that more innovative gauges and tools will emerge and we have to keep exploring that stuff to be able for new discoveries.
I think that for now everything is running around Bitcoin. Still, all altcoins are highly correlated with Bitcoin. Bitcoin is like a whale all other small fish fallow him.
But on the other hand we have to observe any deviations from the main stream in all means. Here I think of properties like new technology breakthroughs, better connectivity with real word (and current financial system), good decentralization properties of particular projects and possible good hardware solutions in crypto sphere.
p.s. check my TA here @, it is still valid. I don't post about price movement three times a day as some TA prophets do here on Steemit. When I have to say something I try to make an important point as you done in this post here. Here @ is also a list of my older posts, in my opinion still worth to read.
Glad that you move this comment upwards, because I think that is good continuation of your thoughts in this post. Thanks!
Aslo I recomanded this TA post @. @mazharkazmi deserves some SBD boost because this analysis is the best one I read for a long time. Mature thinking about trading.
Not like a lot of shitty spam pumping TA from greedy TA prophets flooding Steemit just to milk reward pool with some times almost misleading information about price movements.
Reading their stuff sometimes make me seek.
@knircky
I am very poor student
So, please upvote my post as donate
Please please
I flag your post because begging will drive you nowhere. If you continue this way, you can expect more downvotes (flags) only.
The right way is to start quality posts not only a picture or video and short comment. For start read some high quality posts from @curie project. Express yourself and grow your knowledge.
This explanation is intended to encourage you to be better and smarter. Keep on hard work and you will get rich!
How I will get rich man?
please tell me bro
Why you downupvote?😖😖😖
down?
Read comment to your flagged post!
How much Bitcoin will raise again
Same question from my side also
i upvoted you happy :) ?
I've long know steemit, but now I got to focus. Help me to vote.
Dis was nice and very helpful..
Here is another blog about blockchain, check it here@.
Be nice man!
Thank you and this blog is about blockchain related to my comment, check it here @ and also my older colection @@.
Hello @knircky,
now I have read very careful your guidance how to find my way through the jungle.
Thank you very much again. In most positions I agree with you.
To "iPhone/Apple" I like to say:
with the iPhone in 2007 there was launched a product which could be sold by apple. The smart investor could calculate with some figures and expectations regarding the profit in future and dividend for shareholders.
Another case is STEEM and SBD. Steemit is a business-purpose. The cryptocurrency is linked with the steemit-community. The stemit-community is a value behind the token - very fine.
But yet I don't know, how steemit will earn money for non-community-members to create a value for investors and payout a dividend to the STEEM/SBD-holders.
This question is still my black hole in the big picture of the cryptocurrencies.
Best regards from the borderline to the BLACK FOREST.
A real investor to me is like a crocodile, they survived since dinosaurs age, the reason why is because they have diverse defense mechanism: tail, thick skin, razor teeth, powerful jaw and water. They also have patience to wait till the herd will gather to the water, because the crocodile knew the herd needs water for their basic needs. Hence, Invest for long term, diversified, have patience, and invest to a token that is a basic needs to all application.
Desclaimer: This is not an investment advice, it is only an education. :)
and crocodile should be very careful and plan before coming out to land.
Bitcoin Price Prediction??
Dis is more informing than it looks, thanks alot for this.
I love the analogy! But in the wild west zero-sum game of crypto-investing (as in nature) sometimes even crocs get wrecked 😉:
(Skip to 1:00 min for the action)
One of the most important questions I ask myself when looking at ICOs/Coins is:
Is there an existing usecase? Is blockchain technologie useful for this usecase? How do the circumstances (Team, legal situation, etc.) look like?
Since it is one of the few ICOs I invested in, I will just take HEROcoin (PLAY-Token), an Austrian ICO for the eSports betting industry as an example. Those are the thoughts that pushed me into investing at their ICO:
I just try to think rationally : "Does anybody need this coin?"
This may not work wellf or all coins - But for the ones I invested in, it worked out well so far :)
Greets, Martin
I just wanna share with everybody that nowadays there are more and more institutions are doing DD investigation for cryptocurrency projects, for example, Direc（DRC）, they are from traditional financial industry and very professional.
stay away from government crypto
cool post
I keep it my selection very simple.
I ask myself which crypto technology will survive when the party is over.
Did you know that 60% of last years ICO's are dead or almost dead!?
Im trying to find the survivors like Google, Amazon, Ebay etc
john , my intution says -
Lending platform nowadays sucks! they simply ruin the image of crypto as a whole. Im out with lending platform!
Well said @knircky, my measurement of a good crypto is its usability, who & what companies supports it, its road map and the team behind it. If these items will be achieved then for sure im going to bought some coins in it.
the lending programs before Bitconnect scam were some what good but After the bitconnect scam, Almost all lending programs became risky one .After bitconnect scam ,the davor coin also scammed and now the dekado is also on the same way.But the reason behind this is after bitconnect scam ,people lost totally faith on lending platform.Because bitconnect taught the landing to whole world.but after this big scam,many peoples stopped investing in other lending programs and without investment no any lending program will work.as a result of this one by one all lending programs are scammed and some are on that same track.I really appreciate your thinking !!!!
How much bitcoin will raise Price Prediction??
thank you so much steemians for accepting espicially to bro. knircky thank you for your kindness to support me the steemit goodluck and goodhealth to you and your family
Bitcoin Prediction??
Bitcoin Price Prediction??????????????????????????
Hey @knircky, thanks for sharing this informative post about cryptocurrency evaluation, something that is very important in this space!
I am working on guides to do exactly what you talk about, evaluating cryptocurrencies: I haven't released anything yet, but I'm working on developing both macro and micro economic frameworks to properly value them.
Tokenomics is a specific area of interest for me, in particular token velocity (a term that is thrown around quite a lot by Vitalik himeslf).
I would love to share these guidelines with the Steemit commuity, but will most likely end up publishing it as an ebook, as I am putting a lot of time in to it and need to earn money. I'll do a few posts about tokenomics for sure though!
Thanks again for sharing this, I'm glad that I have your posts on SteemAuto, you really deserve a lot of recognition on Steemit.
thanks for sharing
I think how to evaluate is mostly based on user goals, and whether those goals are near term or long term.
I like projects that have been around for a while and do something very unique and inherently valuable. Of course, I want it to have lots of potential, too. Therefore Steem, in my humble opinion, is one of the most valuable cryptocurrencies out there, though the markets don't yet reflect this.
For my part, I've only been investing in digital assets since November, 1017.
Though I've been investing in traditional stocks since 2005 and small angel investing for 4 years.
When BTC rebounded after epic China FUD in September along with the CBOE/CME futures coming to fruition, I knew that a new asset class was here to stay.
Obviously the vast majority of people are not exposed to this asset class and getting ahead of the heard is lucrative. This observation was not unique and it helped fuel the explosive run-up near the turn of year.
Classic blow-off top.
Now we sit at a decision point. up or down... then up
However, a lot of pain can come with the ...
Fundamental issues as I see them:
Trading and particularly frequent trading lead to a rabbit hole of digital connectedness that, for me, has become a web like the one Frodo got stuck in on his harrowing path to Mordor.
The institutional money is going to have a very difficult time getting in on this in a way that makes much sense aside from playing legacy players in the space (IBM, MSFT, GOOG, NVDA, etc.)
Funds that do get involved will likely be high frequency traders (until a protracted bear market squeezes them out).
The economics of mining are dicey and the largest miners have incentives to short (assuming a market for shorting) so they can protect their increasingly massive mining investment.. though inflation in mining prices should promote HODLing.
Proof of stake coins with reasonably small floats can see long term success, though the volatility and thus the daily trade volume of these assets will also drop.. further turning off the hot money.
I've been bleeding brain juice for months and I just read Peter Teal's book "Zero to One" on the behest of the Youtuber I jacked the "brain juice" quote from.. Very important read for folks getting in this space.
I see crypto transitioning for fast to slow.. exciting to boring. Fast money is going to get shredded rushing in after each other to catch the next fork or airdrop. Perhaps those that can truly devote vastly more than average time and resources and/or developing a successful quant strategy can do well or even VERY well in some cases.. but this likely won't be the case for most.
The major lure of this space was the deflationary nature of the asset, though as we can see with the ever ballooning number of coins and increasing circulating numbers of these coins, inflation is exponential across the ecosystem.
As adoption begins to slowly and hopefully steadily increase, price levels may gradually rise.. though more and more new investors will be needed for each one that is gutted through a phishing scheme or shitty trading.
All I am saying is be patient. Invest in TEAMS/PEOPLE.. I can barely get motivated to sustain my windows office suite's recurring fees. If you're going to merely invest in software, are you really going to hold through the inevitable FUD that will come?
Build a diversified portfolio of multiple asset classes so when your VEN dumps after their rebrand you can hold knowing that your GS stock is holding strong on expectations of rising interest rates.
We are not protected by btc...
Crypto is the wild west jungle we all see happening right now. This was a really good read, I appreciate it. It put a lot of things into perspective for me as well. I found bitcoin back in the day, when it was only cents per coin. Over the years I accumulated a lot of it. Buying, selling, making a few bucks. I had no clue what I was doing. I am was and still am no trader. Sad regret was pulling out only a few short months before the 1st china boom price to 1300.00, I didn't know that was going to happen. The hacks, mtgox craziness etc, honestly scared me off. I got out only holding less then one coin. Fast forward until now. I feel like a moron. I should of had more faith in the system like I did when I found it. Oh well. I'm done ranting on your post. Thanks again for this information, steem on!!
Quality post - another important aspect in the crypto-sphere is sharing information and understandings of projects. There's alot of groundbreaking tech being implemented or attempted being implemented and it's important to understand when a team is being realistic or being hopeful. Thanks again!
thank you!
Buy Lisk and thank me later ;)
How much it will raise??????????
My personal belief is that it will eventually be valued in the 1,000 dollar range. Of course this stuff is impossible to predict accurately.
Excellent article and well written.
I agree with you on so many points.
The biggest thing is - do your own research, DYOR
Is the coin or ICO you are investing going to solve a problem? If so how big is that problem?
Don't just invest because someone on Youtube/facebook/Steemit says so.
Look at the project/road map/team/coin supply etc
So many good coins out there and lots currently undervalued.
Also lots of coins to avoid because they are utter crap.
Plenty of gains to be had but be wise with your choice of investments :-)
Do you personally believe in the project? This comes down to personal choices and beliefs. There are many projects that aim to have a direct impact on our daily lives, from quantum physics to ending world-hunger. But not all projects aiming to solve problems require ICOs. Just think of it this way, if you believe in the project trying to solve a real-world problem, then donate your money to make it happen by participating or purchasing the crypto tokens, if not then don’t donate your money
Bitcoin Price Prediction??
Well said @knircky. I am not a great crypto analyst but i hold on to what i have learnt so far and what i have so learnt by doing my own research.
I got to learn about this when i made a mistake by investing in a coin without looking at the price chart only to find out later that it was just a pump and dump. I got in at the tip and days later i lost more than 50% of my investment.
For me, if it has no use case, it is not worth investing. Unless we are looking at day trading.
If it doesn't offer any value it is bad investment.
Bitcoin Price Prediction??
Onе оf thе most imроrtаnt thing iѕ whеthеr there iѕ a gооd development tеаm behind thе сrурtосurrеnсу аnd hоw асtivе it iѕ. Sеаrсh for thе hiѕtоrу of thе developers, what projects did thеу finiѕh in the раѕt аnd ѕо on.
Thе bеѕt wау tо mеаѕurе thе dеvеlорmеnt асtivitу iѕ viа github.соm. Nоwаdауѕ аlmоѕt еvеrу dеvеlореr uѕеѕ Git (vеrѕiоn control ѕуѕtеm fоr trасking changes in соmрutеr filеѕ аnd сооrdinаting wоrk оn thоѕе files аmоng multiрlе реорlе).
Yes i agree although looking at one dimension i think is never a good idea, as technology alone wont bring home the bacon.
Knowing about cryptocurrencies is very important since you have to invest your money. We should be wise in choosing what kind of platform we are in to attain our purpose why we invest our money. Thanks for your knowledgeable post @knircky
Thank you. And those are some good thoughts.
Thank you for breaking down your analytical view. So much information on so many crypto's it is hard to know what is relevant :)
So I believe your picture choice of a lioness is very interesting, we are all on a hunt for profit. Yet our evalulations are based on our end goal. Short term gains may see you selling off a coin that becomes a bitcoin killer in the long run.
Very informative and well written post. Like you I also look for two check boxes before I invest in crypto coins. 1. Does it have a use case and 2. Can I enter at a cheap price. I am happy that I found Steem end 2016 and could buy at a good price.
good points!
But, Some how you did a great analysis @knircky, that was very useful informations about cyrpto news.
Im glad it was useful
Let´s be deadly when we make our investments, because the crypto world has a lot of potential, but at the same time there very high risks involved.
I hope, we are all getting some Zebras in the next years, result of our very well informed path that we are making today. So, do your homework and risk what you are wheeling to lose, because it will be worth every penny and second in the future.
This is such a key point you made that almost all newbies miss "Can this be done without a blockchain and are the new advantages from blockchains leveraged in a new way that others do not". Great article! : )
Some helpful things here I haven't seen, thanks for posting.
I'm new to Steemit but have been working on a number of models re: Bitcoin and other blockchains with transaction metrics easily accessible and I have to say: it has been astonishing how closely related network infrastructure (where the rubber meets the road - actual dollars and cents being spent to support the network) is to prices themselves. When I apply any of them, rarely do I see less than 90% correlation in terms of explaining prices themselves.
Applied to Bitcoin, this is huge, because you're creating a macro argument as to when prices are likely to rise / decline as a whole. Be interesting to see if others have more info evaluating "intrinsic value" based on the network - ie things you can literally pick up with your hands (hardware, real estate, energy production, etc.)
Very interresting, oh yeah lion are smart on making a good plan beforhand, and the strength is playing a basic role too on making it easier, impressive information, kenya maybe a poor country but we can discover alot of interresting things
i hope i will be back in the mara soon!
Brilliant post.
Good tips for deciding between different cryptocurrencies.
Some of the criteria I use for my own research.
Overall on point
( I also like the metaphera with the lion!
Regards,
Jason
Bitcoin Price??
This is actually so true.there is no direct mathematical formular to dictate what could happen to cryptocurrencies and that is where most people get confused and refuse to invest.But one thing i have learnt is that this crypto thing favor risk takers and inverstors.I came across an article yesterday where a boy told his parents to promise him they wouldnt force him to college if he becomes a millionaire by age 18,jokingly they said yes not beliving meanwhile the young boy bought bitcoibs worth $720 and today he is a million dollar rich after many years gone by.This crypto thing is something we have to believe in from first instant.Nothing is really 100percent guaranteed.
Ha what a great story!
Bitcoin Price Prediction??
KISS 😁👍🏽
This will reget rid of some of my headaches.
Bitcoin Prediction??
i think we cannot trust cryptos
Personally, I just try sticking to the coins that have actual use and technology built on their block chains. I see the others values the same as art or almost like gold.
Yea i think that is a fair approach.
In my Opinion. Before all strategy, patience, education, organisation and persistance are key factors for successful investing. I also did a Sandbox Portfolio in Excell before i started investing real money. I treated this portfolio almost as serious as there were real money in it. This was very helpful to gain some virtual experience without taking serious financial risks.
Also not getting caught by Fomo is very important. Better miss out an opportunity before making decisions without having a clue what you are doing.
Time is your friend not your enemy.
Very good post btw. You certainly ask the right questions in your criteria of evaluation.
Exchellent post ,,
Thank you for the beautiful and hard work!!
nice post you friends
Its a jungle for sure and even with your analysis strategy, you are just touching the surface. Think of a cover on a book thats all we are getting , real Value is an illusion until it stumbles into Reality..right now Crypto is a step in the right direction, though the true chapters of each coin is years away and then it is too late for some to Cash In!
Yep. It is a fun exercise for me for sure though. Thanks for your thoughts.
Bitcoin Price Prediction??
$28 -30k by January 2019 - Altcoins are more dangerous, though there are Diamonds in the Rough!
Nice Post. Thanks for sharing
follow me @thunderland
Bitcoin Price Prediction??
nice post you friends
Nyan sang rimueng nek lon
There always was only one way to evaluate any type of currency, and that is the charts.
Get any crypto you see on the rise
HODL while its value goes up
Cash in when it begins to drop but not when it's worth less than when you got it, or convert it to a different crypto that is on the rise
Obviously, when Bitcoin crashes they all crash, so keep in mind to cash in when that happens.
Yes i think the charts are important, however i have made some good decision also not looking on charts and just buying projects i believed in.
a gut feeling next to hard evidense XD
A genuine financial specialist to me resembles a crocodile, they made due since dinosaurs age, the motivation behind why is on account of they have assorted protection component: tail, tough skin, razor teeth, intense jaw and water. They likewise have tolerance to hold up till the crowd will accumulate to the water, on the grounds that the crocodile knew the group needs water for their essential needs. Subsequently, Invest for long haul, enhanced, have persistence, and contribute to a token that is a fundamental needs to all application.
omg, my sir @knircky is on trending, supper. really i am very happy after see it. congratulations sir. thanks for all time helping me.
In my place, these animals are very rarely encountered
Nice information shared in this article. Will followup your upcoming posts.
What do most people say about the cryptocurrency you’re looking at? The crowd of wisdom is usually right.
Bitcoin Price Prediction??
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