Cryptocurrency is a completely new financial class on it's own due to the blockchain technology.
It can seen as a store of value like Gold, which also does not generates earning and revenue. Gold price goes up due to simple supply and demand.
It can also be used for a fund raising and governance like how a company equity works but with lesser constraints. E.g. A team of people from different background all around the world come together to create an application or a game or a service. They start a blockchain with a completely new token they created. When people buy the token from them, the team uses the money to improve the technology, hire more staff or create more publication, which increases the popularity, the demand, thus increasing the price. The team then open up to token holders how they want the technology to grow like how shareholders vote for the companies. Except now, the team of people who came together need not have to have a official company set up and the pool of people allowed to get the tokens is bigger as well.
Due to the lesser contraints, it's important to DYOR on the cryptocurrency you are getting. A few important ones are:
Is the team real? Or anonymous?
Does the team members have credibility (Compare someone who has won a nobel prize to a fresh graduate)
Is there good publications and following? Twitter, medium, telegram, etc.
Is the team contactable and responsive in the chat
Is the source code audited?
Is there a roadmap?
How is the token used?
What services/games are they providing?
Are there good backers (Angel investors and/or Venture Capitals)?
Cryptocurrency is a completely new financial class on it's own due to the blockchain technology.
It can seen as a store of value like Gold, which also does not generates earning and revenue. Gold price goes up due to simple supply and demand.
It can also be used for a fund raising and governance like how a company equity works but with lesser constraints. E.g. A team of people from different background all around the world come together to create an application or a game or a service. They start a blockchain with a completely new token they created. When people buy the token from them, the team uses the money to improve the technology, hire more staff or create more publication, which increases the popularity, the demand, thus increasing the price. The team then open up to token holders how they want the technology to grow like how shareholders vote for the companies. Except now, the team of people who came together need not have to have a official company set up and the pool of people allowed to get the tokens is bigger as well.
Due to the lesser contraints, it's important to DYOR on the cryptocurrency you are getting. A few important ones are:
Is the team real? Or anonymous?
Does the team members have credibility (Compare someone who has won a nobel prize to a fresh graduate)
Is there good publications and following? Twitter, medium, telegram, etc.
Is the team contactable and responsive in the chat
Is the source code audited?
Is there a roadmap?
How is the token used?
What services/games are they providing?
Are there good backers (Angel investors and/or Venture Capitals)?