What is a Token?
It is technically the same as “cryptocurrency” or “crypto asset”. Token primarily refers to all cryptocurrencies other than Bitcoin and Ethereum (although in fact they are tokens). Tokens have a wide range of potential functions in areas such as decentralized exchange, decentralized internet, smart contracts, file sharing, etc. It can be traded or stored like any cryptocurrency.
The Whitepaper of the Project Should Be Read
The first point you need to look at when investing in tokens is to examine and understand the whitepaper of the project in detail. So what is a whitepaper?
Whitepaper; We can say that it is a document that contains technical information such as the problems that crypto money projects aim to solve, how the project finds a solution method to these problems, the working principles of the project, which architectural layers it works with.
For example; Bitcoin’s whitepaper was published by Satoshi Nakamoto on October 31, 2008. Nakamoto, who explained the working principles of Bitcoin in the white paper, said that this text; With the title “Bitcoin: Peer-to-Peer Electronic Cash System”, he shared it with the whole world.
This whitepaper may also include financial information for the project. Information such as when the project will be released, the rates at which it will be distributed and how much the token supply will be can be found in the Whitepaper.
The Team Behind the Project Should Be Examined
Another point you should pay attention to when investing in tokens is the team behind the project. In other words, try to find answers to questions such as who is in the team that created the project, what are the expertise areas of the project managers, who are the managers of this team. Looking not only at who these managers are, but also at their previous work and initiatives, allows us to learn about their projects.
Future Planning of Tokens
The whitepapers we mentioned above also contain information about the future of altcoins. What will be done at what time in the project, the steps to be taken, whether there will be an update on the software side, listing on the stock exchanges are important for the course of the project.
There are a huge number of cryptocurrencies available. The planning of the projects of these crypto coins is not always as expected. However, there are such projects that this planning works flawlessly. Choosing such projects will be very important in terms of investment.
Token distribution
Token distribution is one of the important issues that we should pay attention to in whitepapers. Each token has a total supply amount and this amount is used for various purposes at the rate written in the whitepaper.
- The amount allocated to the team
- Amount allocated for marketing and advertising budget
- Amount allocated to the software and development team
- Circulating and non-circulating quantity
The specified rates should be carefully examined and attention should be paid to whether the distributions are made fairly.
The integrity of their partnership
It is important to remember that in the crypto money markets, there is a market where any person or community can issue tokens. For this reason, it is necessary not to believe every information written in the direction, it is possible to see partnerships and agreements that are not available. We advise you not to trust and invest without seeing or verifying the official statements of the parties to the partnership agreements.
Exchanges traded
There are many exchanges in the crypto money markets, but the vast majority of them have a small customer base due to the fact that they cannot prove their reliability, so their volume is quite low. For this reason, you need to pay attention to the fact that the token you will invest in is reliable and the exchange you will make this transaction has proven itself.
Investment Plan
What kind of investor are you, what are your goals, what maturities do you want to invest? You should find the answers to these questions.
Do you want to invest in cryptocurrency in the long term, in the short term or with daily buying and selling?
The concepts of long term and short term may vary according to many people. For some investors, the long term is 2-3 years, while for some investors this long term may be 6 months. This also applies to the short term.
Fundamental and Technical Analysis
Fundamental analysis looks at more objective indicators of an asset’s potential long-term value, such as its business model, roadmap, and usage, while technical analysis focuses on the asset’s market performance.
With fundamental analysis, you can decide whether the price of an asset is higher or lower than its value based on how you view the intrinsic value of the asset.
How does technical analysis work?
Technical analysis is a type of analysis based on numbers rather than a decision-making approach. This analysis assumes that the market has already taken into account all known information on the current price and the amount of clearing activity.
