{"id":398115,"date":"2022-01-23T19:15:00","date_gmt":"2022-01-23T16:15:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/how-to-pick-or-analyze-altcoins\/"},"modified":"2022-01-23T19:15:00","modified_gmt":"2022-01-23T16:15:00","slug":"how-to-pick-or-analyze-altcoins","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/how-to-pick-or-analyze-altcoins\/","title":{"rendered":"# How to pick or analyze altcoins?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2c363cd47d7\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2c363cd47d7\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/how-to-pick-or-analyze-altcoins\/#What_are_altcoins\" >What are altcoins?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/how-to-pick-or-analyze-altcoins\/#Mining-based\" >Mining-based<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/how-to-pick-or-analyze-altcoins\/#Stablecoins\" >Stablecoins<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/how-to-pick-or-analyze-altcoins\/#Security_tokens\" >Security tokens<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/how-to-pick-or-analyze-altcoins\/#Memecoins\" >Memecoins<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/buradabiliyorum.com\/en\/how-to-pick-or-analyze-altcoins\/#Utility_tokens\" >Utility tokens<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/buradabiliyorum.com\/en\/how-to-pick-or-analyze-altcoins\/#How_do_you_evaluate_altcoins\" >How do you evaluate altcoins?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/buradabiliyorum.com\/en\/how-to-pick-or-analyze-altcoins\/#Step_1_Analyze_the_whitepaper_and_find_the_value_proposition\" >Step 1: Analyze the whitepaper and find the value proposition<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/buradabiliyorum.com\/en\/how-to-pick-or-analyze-altcoins\/#Step_2_Look_for_increasing_demand_and_stable_or_decreasing_supply\" >Step 2: Look for increasing demand and stable (or decreasing) supply<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/buradabiliyorum.com\/en\/how-to-pick-or-analyze-altcoins\/#Step_3_Assess_the_team_and_stakeholders_behind_the_project\" >Step 3: Assess the team and stakeholders behind the project<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/buradabiliyorum.com\/en\/how-to-pick-or-analyze-altcoins\/#Which_altcoin_platforms_have_the_most_potential\" >Which altcoin platforms have the most potential?<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># How to pick or analyze altcoins? <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-128018ef>\n<h2><span class=\"ez-toc-section\" id=\"What_are_altcoins\"><\/span>What are altcoins?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The word \u201caltcoin\u201d is derived from \u201calternative\u201d and \u201ccoin.\u201d Altcoins refer to all alternatives to Bitcoin. Altcoins are cryptocurrencies that share characteristics with Bitcoin (BTC). For example, Bitcoin and altcoins have a similar basic framework. Altcoins also function like peer-to-peer (P2P) systems and share code, much like Bitcoin.<\/p>\n<p>Of course, there are also marked differences between Bitcoin and altcoins. One such difference is the consensus mechanism used by these altcoins to validate transactions or produce blocks. While Bitcoin uses the proof-of-work (PoW) consensus mechanism, altcoins typically use proof-of-stake (PoS). There are different altcoin categories, and they can best be defined by their consensus mechanisms and unique functionalities.<\/p>\n<p>Here are the most common types of altcoins:<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Mining-based\"><\/span>Mining-based<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Mining-based altcoins use the proof-of-work method, most commonly known as PoW, which allows systems to generate new coins by way of mining. Mining entails solving complex problems to create blocks. Monero (XMR), Litecoin (LTC) and ZCash (ZEC) are all examples of mining-based altcoins. <\/p>\n<h3><span class=\"ez-toc-section\" id=\"Stablecoins\"><\/span>Stablecoins<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Stablecoins aim to reduce the volatility that has marked crypto trading and use since the beginning. The value of stablecoins is, therefore, pegged to the value of a basket of goods, like precious metals, fiat currencies or other cryptocurrencies. The basket serves as a reserve in case the cryptocurrency encounters problems. Dai (DAI), USD Coin (USDC) and Tether (USDT) are all examples of stablecoins. <\/p>\n<h3><span class=\"ez-toc-section\" id=\"Security_tokens\"><\/span>Security tokens<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>True to its name, a security token is similar to traditional securities traded in stock markets. They resemble traditional stocks and represent equity, either in the form of ownership or dividends. Security tokens attract investors because of the high probability that their price will <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>reciate quickly.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Memecoins\"><\/span>Memecoins<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Memecoins are called such because they represent a silly take on well-known cryptocurrencies. They are typically hyped by celebrities and popular influencers in the crypto space. Popular meme coins Dogecoin (DOGE) and Shiba Inu (SHIB), for example, often have their prices driven up by Elon Musk, Tesla\u2019s CEO and well-known crypto enthusiast.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Utility_tokens\"><\/span>Utility tokens<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Utility tokens are used to provide services like rewards, network fees and purchases within a given network. Utility tokens do not offer equity, unlike security tokens. Filecoin (FIL), for example, is a utility token used to purchase storage on a decentralized storage network. <\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_do_you_evaluate_altcoins\"><\/span>How do you evaluate altcoins?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>\u200bAltcoin fundamental analysis involves looking at and evaluating all available information on an altcoin. It involves looking at the cryptocurrency\u2019s use cases and its network, as well as the team behind the project, to fully understand and evaluate the best altcoins to buy. <\/p>\n<p>When analyzing altcoins, or any cryptocurrency for that matter, the goal is to understand whether the asset in question is overvalued or undervalued. Overvalued assets should be avoided, whereas undervalued assets are more ideal. This is because overvalued assets will likely underperform and dip back to their real value. Undervalued assets, on the other hand, have more potential for growth and are consistently profitable. <\/p>\n<p>A thorough analysis will help you make the best decision concerning your investment decisions. <\/p>\n<p>Here are some helpful guidelines on how to analyze cryptocurrency before investing:<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Step_1_Analyze_the_whitepaper_and_find_the_value_proposition\"><\/span>Step 1: Analyze the whitepaper and find the value proposition<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Scrutinizing a token\u2019s whitepaper will provide a lot of relevant information such as its use cases, goals and the team\u2019s vision for the project. The white paper must give you a good picture of how the altcoin will provide value for its users.<\/p>\n<p>The value proposition for Bitcoin, for example, is as follows: \u201ca decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on a peer-to-peer network without the need for inter<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>ries.\u201d<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-01\/ccb0894b-f433-4085-bc05-d49871402477.png\"><\/figure>\n<p>An altcoin\u2019s value proposition can guide you as you continue to analyze other information about it. <\/p>\n<h3><span class=\"ez-toc-section\" id=\"Step_2_Look_for_increasing_demand_and_stable_or_decreasing_supply\"><\/span>Step 2: Look for increasing demand and stable (or decreasing) supply<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Looking at supply and demand is one of the best ways to assess your next crypto investment. Now that you\u2019ve gotten a clear picture of how the altcoin adds value to its users, it\u2019s time to look at how it navigates supply and demand.<\/p>\n<p>Simply put, the altcoin should have incentives that will facilitate the increase of demand in such a way that supply is continually decreasing or stable. When demand outpaces supply, prices go up, thereby fueling even more demand.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-01\/b55f2624-c194-48b0-b140-9e01aea26db7.png\"><\/figure>\n<p>To do this, you can access resources like Cointelegraph\u2019s Price Indexes and Market <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a>, as well as Coin 360\u2019s <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/coin360.com\/\">Heatmap<\/a> and <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/coinmarketcap.com\/\">CoinMarketCap<\/a>.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Step_3_Assess_the_team_and_stakeholders_behind_the_project\"><\/span>Step 3: Assess the team and stakeholders behind the project<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Now that you have a good understanding of what the project can offer, it\u2019s also important to thoroughly assess the team behind the project. You can find information about the team on the project\u2019s white paper, but try to do independent research on them as well. You can check out the official project site\u2019s team page as well as their LinkedIn profiles which they should have made public and accessible to all.<\/p>\n<p>Ask the following questions when looking into each member\u2019s background:<\/p>\n<ul>\n<li>Have they worked on other reputable and successful projects in the past?<\/li>\n<li>What are their credentials?<\/li>\n<li>Are they reputable members of the crypto community and blockchain ecosystem?<\/li>\n<\/ul>\n<p>The goal is to find if the team behind the project is experienced and composed of experts who know what they are doing. You can look at on-chain analytics platforms and blockchain explorers to supplement your research regarding this. You can also sniff around their social media profiles or check out Twitter for conversations they engage in.<\/p>\n<p>Ethereum, for instance, has such a strong investment community because every individual working on Ethereum creates value for Ethereum holders. Despite issues such as high fees and slow transactions, developers, community builders and other top talents still want to go onboard with Ethereum-related projects. <\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-01\/2d637cdd-45af-4c2f-b83c-7d1254388085.png\"><\/figure>\n<p>Platforms like <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/aave.com\/\">AAVE<\/a> and <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/opensea.io\/\">OpenSea\u200b<\/a>, for example, are built on Ethereum. The logic behind ensuring a strong core team backing the project is because it creates a ripple effect. A project with a strong talented team attracts even more credible forward-thinkers, thereby allowing even more projects and improvements to be built upon the platform, much like Ethereum. These people strive to continually improve on available platforms and initiatives related to the project, thus creating even more value for currency holders. <\/p>\n<h2><span class=\"ez-toc-section\" id=\"Which_altcoin_platforms_have_the_most_potential\"><\/span>Which altcoin platforms have the most potential? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>When it comes to altcoin investing, there are a variety of options you can choose from. However, it\u2019s always prudent to know which ones have the most potential to ensure you will be making a smart investment.<\/p>\n<ul>\n<li><strong>Ethereum<\/strong><strong>: <\/strong>There\u2019s a reason why Ethereum is dubbed by many as the \u201cKing of Altcoins.\u201d Created in 2013 by Vitalik Buterin and co-founders, Ethereum is a smart contract platform used to create decentralized applications (DApps). The founders engineered Solidity, Ethereum&#8217;s very own programming language for smart contracts. The majority of the current decentralized finance space relies on Ethereum\u2019s blockchain, while the native token Ether (ETH) continues to evolve in its usefulness by the day.<\/li>\n<\/ul>\n<ul>\n<li><strong>Chainlink<\/strong>: Chainlink takes smart contracts to another level by incorporating real-world data. Thanks to Chainlink, Ethereum smart contracts can now make calls to other application programming interfaces, as well as act on global occurrences and other asset prices. Chainlink\u2019s value continues to soar while it brings onboard valuable stakeholders, including former Google CEO Eric Schmidt as one of its advisers.<\/li>\n<\/ul>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-01\/5c993a44-9619-428f-b90c-8759d79a59e5.png\"><\/figure>\n<ul>\n<li><strong>Stellar Lumens<\/strong>: Stellar aims to unite global banking systems via its decentralized platform. As such, it uses disconnected payment methods like Alchemy Pay and Single Euro Payments Area. The Stellar network then connects such systems via a decentralized ledger. In competition with Stellar is Ripple, whose <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/fortune.com\/2021\/07\/29\/ripple-xrp-sec-lawsuit-impact-on-crypto-industry\/\">run-in<\/a> with SEC has made it vulnerable. This places Stellar in a prime position to take the reins at becoming the top global payment network.<\/li>\n<li><strong>Aave: <\/strong>Aave is already one of the top lending protocols today and continues to offer security and anonymity to borrowers. Because of its popularity, borrowers are required to offer greater collateral than the amount they are borrowing. The collateral is safely held in escrow throughout the duration of the loan. In the event of a default, the lender is automatically paid via the smart contract.<\/li>\n<\/ul>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. 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The word \u201caltcoin\u201d is derived from \u201calternative\u201d and \u201ccoin.\u201d Altcoins refer to all alternatives to Bitcoin. Altcoins are cryptocurrencies that share characteristics with Bitcoin (BTC). For example, Bitcoin and altcoins have a similar basic framework. Altcoins also function like peer-to-peer (P2P) systems and share&#8230;<\/p>\n","protected":false},"author":1,"featured_media":398116,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDEvODE2NjU0NTUtNmFiMS00NGVhLWJhMDYtYTIxOTVjNzFhNGI3LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74867,74862,74894,74863,74891,76556,75042,74889,74892,4965],"class_list":["post-398115","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-altcoin","tag-bitcoin","tag-blockchain","tag-cryptocurrencies","tag-ethereum","tag-fintech","tag-mining","tag-payments","tag-tokens","tag-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/398115","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=398115"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/398115\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/398116"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=398115"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=398115"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=398115"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}