How to discover the deep side (3)
Other points help in evaluating cryptocurrencies
Competitors
One important way to evaluate a cryptocurrency is to know its competitors. It may be a completely new idea that has no competitors, and it may have other competitors offering the same product and the same idea in the same region and in the same market.
Question: What is the benefit of knowing the competitors for the project?
You can't evaluate a cryptocurrency-related project without comparing it to competitors.
Now, if you extract the various indicators and metrics for any cryptocurrency, how do I know if it is good or bad? I can only know if it is good or bad by comparing it with the indicators and metrics of other competing projects.
What
gives numbers meaning is that you compare them to others.
By
knowing the competitors and comparing the project with them, you can
make a better decision.
Financial Analysis
Financial analysis is an essential tool in evaluating an asset.
After obtaining the financial statements, we start the financial analysis process and begin to better understand the financial position of the asset and properly evaluate it financially.
Unfortunately, most cryptocurrency projects have no accounting system at all; they don't have accountants, and they don't produce any financial statements.
If the project has a strong forum and community, even if there are no accountants,
You will constantly find that they post actual expenses and required expenses for the next period on the forum.
The project may not have a regular and complete accounting and financial system, but at least it has a lot of reports that can be found in the forum.
By following these reports, you can judge the strength and effectiveness of the project and, therefore, the cryptocurrency associated with it.
Multiple questions
Here are some questions Try to find answers .
You are now, after examining several aspects of the project, needing to organize your thoughts, organize the information you obtained, and find answers to a lot of questions.
For example, what are the political, economic, legal, environmental, and societal factors that can affect the cryptocurrency project?
What are the mission, objectives, strategies, and techniques of the project?
What are the strengths, weaknesses, opportunities, and threats of the project?
Who are the customers and major investors in the project?
These questions try to answer them. This helps you a lot in understanding the project and evaluating what you are investing in.
To be continued
