▷ Cryptocurrencies: How to know which cryptocurrency to choose to buy

 

Cryptocurrencies: How to know which cryptocurrency to choose to buy

When we hear about cryptocurrencies, the first thing that comes to mind is Bitcoin, the first cryptocurrency to exist and gain popularity over the years for its high monetary value. 

Many of us regret that we did not invested a few dollars at the time to obtain a significant long-term return.  

Currently there are a large number of cryptocurrencies that can be purchased, and considering that new cryptos are created daily, it is an opportunity to jump on the train.

But before jumping in and buying any cryptocurrency at random, you have to know what is behind it and the projections that they will have in the future.

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Tips when buying a cryptocurrency

When entering the world of cryptocurrencies, you will come across different terminologies used in this area that we will teach you throughout this article.

Differences and similarities between a cryptocurrency and a token

The first thing you should know is that a token and a cryptocurrency are broadly similar ... But they clearly have their differences: 

Cryptocurrencies: They are assets or digital currencies that work in an encrypted way on their own blockchain or network, the characteristics that these cryptocurrencies have are anonymity, high security and decentralization.

A clear example of these cryptocurrencies are Bitcoin and Etherium, then there are Altcoins (alternatives to Bitcoin) such as Litecoin, to transact with each one, you must have a wallet or digital wallet.

Token: Tokens are broader digital assets, since there are different types of "Utility Token" tokens; "Security Token" and "Payment Token". Each of these tokens are created with a great project behind them, like Saitama, Shiba Ino and others.

In either case, they can be used synonymously between a token and a cryptocurrency, so it is easy to get confused, but with the differences, we now know that not all tokens are cryptocurrencies.

How to find a good token or cryptocurrency project to invest in

To find and detect a possible token or cryptocurrency that has a good long-term future, it is necessary to analyze the project behind it.

By doing this, we will have an idea if the token that we are going to buy and keep in the long term will leave us a significant return or not.

How to analyze a token to invest

To invest in a possible good project or, in short, to buy a token that has a future, we must analyze the project that has said token.

To do this, we will enter the following CoinMarketCap website  , where we will be able to track the prices of any new or existing cryptocurrency or token.

How to analyze a token to invest

To obtain information about a token, it is not necessary to register, you can simply choose the list of the 3 tokens that are in trend, with the most profits or those recently added.

You will also find on the initial screen a top 100 of the cryptocurrencies and tokens of the day, or use the search engine in case you hear any special mention. 

To exemplify the analysis of a token or cryptocurrency, we are going to take Polkadot as an example (it is not a recommendation to invest, but an example for this case).

The current price of Polkadot is as follows:


When entering the Polkadot page, we will have absolutely all the information about the project, the contract, the capitalization volume in the last 24 hours, and more.

analyzing polkadot

By sliding down the screen, we can see what the project is about, in a few words, Polkadot aims to create a fully decentralized network allowing each user to have full control, he can connect between multiple blockchain networks as many public as private.

At first glance, it seems to be a solid project to invest and obtain long-term profitability, again we clarify that it is not a recommendation from us

On the same information page we can see where to buy Polkadot: Binance , Mandala Exchange, OKEx and FTX.

How to detect if a token or cryptocurrency is fake

Not everything is rosy when buying a token, even more so when it is new and you have the hunch that you can get profitability in the short term. So there is a web tool that can help you detect if a token is false or "scam".

The online tool is called Token Sniffer and as its name and logo indicate, it sniffs the token to find out if it is fake or real.

How to detect if a token or cryptocurrency is fake

The procedure is very simple, you just have to enter Token Sniffer and in the search area paste the address or token contract that you want to know if it is false.

The address or contract of the token is obtained from the CoinMarketCap page, where again we will take as an example a token that was reported as scam or false by the community.

detect a fake token

Once we have the result in the search engine, we can see that it has a high percentage of risk, so we will have to report it as a possible scam and look for another cryptocurrency to invest our money.

using tokensniffer

How to avoid buying a scam token

 The best way not to buy a fake cryptocurrency or token is to buy it through a popular exchange, however some tokens are not yet available, for example on the Binance platform.

An alternative is to use the MetaMask wallet to buy those tokens directly from its official website or use another exchange platform such as LBank , where we will find popular tokens such as Saitama , Goku, and many more for fans.

Another recommendation is to verify the number of "holders" or people who have bought that token and keep it on standby, or view the amount of monetary volume moved within 24 hours.

Cryptocurrency Dictionary

In the world of cryptocurrencies, there are also terms and vocabularies that you must learn to understand a little more what they refer to every time you hear a word that seems strange.

As in trading, there are several terms that refer to the same action or description that are used, such as the ones we will see below:

What is an Airdrops? 

Airdrops can be the most attractive form of promotion for the launch of tokens or cryptocurrencies. Also, in a populated ecosystem like cryptocurrency, the distribution of free assets is one of the best ways to get a map. 

What is the All-Time High (market)? 

This is the highest price reached by a cryptocurrency or any other asset in its entire history. In English, the acronym ATH (All Time High) is often used.

What is Algorand? 

Algorand (ALGO) is an advanced blockchain project, designed by cryptographer Silvio Micali, focusing on high-speed transaction processing and advanced smart contracts for decentralized finance (DeFi).

What is an Algorithm? 

A set of rules and steps to solve a problem, whether they are computational operations or other properties. A mathematical example is the steps to solve the three rules. Instead, a non-mathematical example is preparing a meal by following the steps in a recipe.

What is an Altcoins? 

Altcoins or "altcoins" are the name of all non-bitcoin currencies. The firm intention of the birth of altcoins is to diversify and improve the crypto ecosystem through options other than Bitcoin. Let's understand some of these altcoins and how they enrich the current crypto ecosystem.

What is AML (Anti Money Laundering)? 

Set of international laws approved to mitigate money laundering by criminal persons or organizations. Application Program Interface From the English application programming interface. 

What is an API? 

It is a set of routines, protocols and tools that are used to develop software applications. The API specifies how the software components should interact with each other.

What is an Aragon (ANT)? 

It is a framework or development framework that focuses on facilitating the creation of Decentralized Autonomous Bodies (DAOs), allowing them to quickly and easily build any project that requires this structure.

What is an Arbitration? 

Arbitrage refers to the process of buying cryptocurrencies at a low price on one exchange and selling them at a higher price on another exchange.

What is an Asset? 

Translates as active. In the world of cryptocurrencies, it refers to a token that can uniquely represent anything (physical or non-physical) and be transmitted digitally.

What is an Atomic Swap? 

Atomic Swap or atomic swap is a primary level cryptocurrency exchange in which users can exchange currencies from different blockchains without intermediaries.

What is a Bear (markets)? 

They are investors who are pessimistic about market prices expect market prices to go down. Shorts and bulls have established a dualistic relationship.

What is a Blockchain (chain of blocks)? 

It is a distributed network that allows the development of technologies such as cryptocurrency and what we call the Internet of Value.

What is a Blockchain Explorer? 

You can view the information and transaction status of the public blockchain network on this website to check the status of transactions made with a specific cryptocurrency.

What is a Block? 

The basic element of the blockchain created by miners and allows to link transactions on the network. Blocks are created at intervals of time and link new transactions with existing transactions on the blockchain. We can be sure that the blockchain is like a digital ledger, and each block is each page of the ledger.

What is a Block Reward? 

A block reward is obtaining cryptocurrencies after successfully solving a block. It is obtained as compensation for the work done through the verification block.

What is a Bot Trading? 

Bot trading is a software that issues, edits, cancels and executes buy and sell orders according to a strategy that changes according to the entered set of rules.

What is a Bull?

 They are optimistic investors about market prices and hoping to go up. The bulls and the bears have established a dualistic relationship.

What is Cardano (ADA)? 

It is the third generation cryptocurrency and blockchain, it is built on the basis of peer-reviewed research and is considered the 'first scientific blockchain in the world of cryptocurrencies'. Its main goal is to become a high-speed, scalable and inexpensive blockchain with advanced smart contract features.

What is a Centralized Exchange (CEX)? 

The centralized digital exchange allows funds to be deposited into an account or wallet on the exchange, and the platform itself executes transactions for us based on data parameters.

What is Chainlink (LINK)? 

It is a well-known decentralized oracle project that runs on the Ethereum blockchain and becomes the main pillar of interconnection between the real world, DApps, and the DeFi ecosystem on the blockchain.

What is Cloud Minig? 

It includes the leasing of cryptocurrency mining capabilities to companies that provide this service over the Internet.

What is Coinbase (concept)? 

Also known as a "generating transaction", it is a special type of transaction in cryptocurrency protocols such as Bitcoin. Unlike ordinary transactions, the origin of the transaction is "ubiquitous." It occurs when a miner creates a block, and it is the type of transaction that the new cryptocurrency enters into circulation.

What is CoinSwap? 

The Coinswap is a decentralized protocol that allows cryptocurrency users to exchange their coins directly and privately. In other words, there is no involvement of intermediaries of any kind except users who are interested in the exchange.

What is a Cold Wallet? 

A cold wallet is a wallet that is not connected to the blockchain, but whose currency is on the blockchain. It can be a USB to store coins or a sheet of paper with a QR code.

What is a Collectible Token? 

They are collectibles of the Ethereum blockchain under ERC-721, where each token refers to a unique item with a specific value. The most popular is CryptoKitties, but there are many others. 

What is the CPU? 

The central processing unit is called the CPU, which is the brain of the computer, responsible for performing all the complex calculations necessary for the operation of computer technology.

What is Cryptography? 

Cryptography is a technology used to protect data and prevent unauthorized third parties from accessing valuable information, changing it for their own benefit or harming others.

What is a Cryptocurrency? 

It is an encrypted token based on blockchain technology and can be used as a monetary asset because it allows the transfer and retention of value. 

What is DAICO? 

The evolution of ICO. The investment is raised in full during the ICO stage, but funds will be released as development progresses, reaches a set milestone, or requires proven funding. DAICO aims to allow investors to control liquidity.

What is DAO? 

Translation into Spanish is an autonomous and independent organization. They are open source and decentralized systems that do not require human operators or controllers. Once the pre-agreed requirements are met and reflected in the smart contract, they can work independently from developers and third parties.

What is DAPP? 

They are decentralized applications that run autonomously, store data on the blockchain and run according to established parameters.

What is DEFI (decentralized finance)? 

DeFi is an ecosystem made up of smart contracts and decentralized applications. Its aim is to build a series of financial services backed by blockchain technology, making it completely decentralized, secure and influential globally.

What is Decentralized? 

This term is used to indicate that behind the cryptocurrency and its blockchain network, there is no code for private companies, institutions, third parties or countries that supervise, control or manipulate it. 

What is a Decentralized Exchange (DEX)? 

Decentralized digital exchange based on blockchain and open source code. No one controls the DEX, and buyers and sellers trade through a peer-to-peer application. 

What is a DNS (domain name system)? 

DNS stands for Domain Name System. In addition to being distributed, this hierarchical naming system for the Internet also acts as a domain name translator. 

What is the Dump? 

The dump is a price manipulation scheme in which the price of an asset is made to fall.

What is ERC-1155? 

The ERC-1155 token is a new standard token on Ethereum. Due to its multi-token capability and new features designed to provide a better user and programming experience, it can change the pattern of DApps on the blockchain.

What is ERC-20? 

ERC-20 tokens are nothing more than smart contracts with pre-established data structures. This structure is designed to promote the performance of various functions on the Ethereum blockchain, thus facilitating the creation of developers. 

What is ERC-721? 

The existence and operation of the ERC 721 token of the Ethereum network is based on improving the digital scarcity to take advantage of the effects of limited edition products. Unlike ERC-20 tokens, their appeal lies in how their uniqueness enhances their collection. 

What is an Exchange? 

Digital exchange allows you to exchange cryptocurrencies and / or cryptocurrency fiat currency with each other. 

What is a Faucet? 

They are websites that give you a small amount of cryptocurrencies to perform simple operations (for example, fill out a verification code). They were created to promote Bitcoin, and anyone can access this cryptocurrency and circulate it. Today, there are almost all the cryptocurrency leaders on the market. 

What is the Fee? 

The Fee is the commission that is charged when carrying out any transaction within the blockchain. 

What is Fiat (fiat currency)? 

Trust funds currently used. Banknotes issued by different states or a group of states. For example: euro, US dollar, Chinese yuan, ruble, British pound, etc.

What is the FOMO? 

It is the abbreviation of "Fear Of Missing Out" which in Spanish translates as "Fear of staying out". A term that defines the mindset of people in the market before they can lose a potentially profitable investment, such as from rising asset prices, either from objective evidence or from rumors and positive news.

What is Gas (Ethereum)? 

Gas is a unit of measurement used to measure the work done by Ethereum to execute transactions or any interaction within the network. 

What is the GPU? 

The GPU is a special processing unit designed to perform complex calculations in computer graphics quickly and efficiently. Although in the world of cryptocurrencies, they are used to perform cryptocurrency mining work.

What is Hash? 

The Hash is an exit code (unique and alphanumeric) that is obtained by applying an algorithm (hash function) to the input string (plain text, image, video ...), which allows us to know if the original string has changed.

What is the Historical Low (market)? 

This is the lowest price reached by a cryptocurrency or any other asset in its entire history. In English, the acronym ATL (All Time Low) is often used.

What is a Hot Wallet? 

It is a wallet that is always connected to the blockchain. Stored coins can be quickly exchanged with other members of the network or used for transactions. 

What is ICO? 

Translated into Spanish as the initial issuance of currency, it is a means of creating tokens known as financing for projects based on blockchain networks in their development stage. 

What is Lambo? 

The term Lambo that is used to make big profits or get rich through cryptocurrency. It means buying a Lamborghini and making a profit.

What is Ledger? 

Its translation is ledger or ledger and includes accounting records of all transactions in files or databases from the beginning of currency and business. The cryptocurrency blockchain network can create a distributed digital ledger. There are different types of ledgers in the digital age.

What is Liquidity? 

Liquidity is a characteristic of the market that allows us to identify whether it is possible to buy and sell assets quickly and fluidly in the market. 

What is Margin Trading? 

Margin trading or leveraged trading is a form of trading in which the position you occupy is leveraged by the broker or the platform you use to participate in the market. The purpose of this is to double the profits from successful trades, but at the same time double the chances of losing everything.

What is MetaMask? 

Metamask is a wallet project that allows us to manage funds to more easily interact with different DApps running on the Ethereum network, and all of this is achieved through a simple web browser extension. 

What is Mining? 

Cryptocurrency mining is the process of solving mathematical problems to ensure the security of distributed networks. Mining is financially incentivized: in addition to the transaction fee that it adds to the block, the miner will also receive the new cryptocurrency recently issued by the program. 

What is a Mining Pool? 

The mining pool combines the resources of several miners to obtain greater mining power and thus obtain rewards for opening larger blocks. Some are public, some are private.

What is a Network Commission? 

This is the commission that each Bitcoin user pays when transacting on the network, and it is also part of the rewards miners get for keeping the network up and running. Each cryptocurrency has a minimum commission. 

What is an NFT (non-fungible token)? 

NFT tokens or non-fungible tokens are a solution that allows us to represent objects with unique, non-repeatable and indivisible characteristics on the blockchain.

What is a Node? 

In a blockchain network, a node is a computer that is connected to the network and has an up-to-date copy of the blockchain. Together with the miners, they are the guarantors of the normal operation of the network. The nodes in Bitcoin are very important because they help to keep the network decentralized. 

What is an Oracle? 

An oracle is an automated system that obtains information from different media or users and enters it into the blockchain network that will be used for smart contracts. This is something that the Ethereum network brings. 

What is P2P? 

They are peer-to-peer networks or called point-to-point networks. It refers to a decentralized network, in which information is shared between two users connecting to the network or the Internet, and there is no other intermediary other than the software that connects them. 

What is a Portfolio? 

The investment portfolio or portfolio is known as a set of financial instruments owned by investors and used to increase their financial assets.

What is the Pump? 

English term that expresses a significant and sudden increase in the value of cryptocurrencies. They can be caused by one person or a group of people, or they can be caused by some powerful events that will generate large-scale cryptocurrency purchases.

What is a Rig? 

A rig is a mining equipment that is composed of hardware elements such as CPU, GPU, FPGA or ASIC, and they are arranged to perform cryptocurrency mining.

What is a Satoshi? 

Satoshi is the smallest unit of Bitcoin that can be divided, which is equal to 0.00000001 Bitcoin (BTC). Its name comes from the name of the creator of Bitcoin, Satoshi Nakamoto.

What is Scam? 

They are those projects or tokens related to the blockchain but in order to scam the buyer.

What is a Shitcoin? 

Shitcoin is a derogatory term that refers to an altcoin that is worthless or expected to be in short supply due to inconsistencies in code, team, or project. It is a conceptual idea in English, consisting of two words shit (shit *) and coin (currency), which literally means shit coin *.

What is a Smarts Contracts? 

Also known as a "smart contract", it is a digital agreement between two or more parties for goods, services, or anything else imaginable. Once all the requirements have been met, it will be resolved automatically, and the parties will receive the previously agreed content.

What is a Stablecoin? 

A stablecoin is a cryptocurrency designed to keep its value stable.

What is Staking? 

Staking is the action of acquiring cryptocurrencies and storing them in a wallet for profit or rewards.

What is To the Moon? 

Literally it means: "towards the moon". The expression was originally used to indicate that the value of Bitcoin will increase dramatically. Now it is widely used in all cryptocurrencies. 

What is a Token? 

In the world of cryptocurrencies, a token is a digital representation of the value of an asset (physical or not). There are a number of standards to create them, and the Ethereum network currently owns more than 80% of the existing tokens. 

What is a Token Burn? 

It is the development team of a specific project that removes a certain amount of tokens. All burned tokens will automatically stop working and have value. 

What is Trading? 

It is the real-time currency exchange to make profit.

What is Uniswap (UNI)? 

Uniswap is a decentralized exchange protocol (DEX), which plays a very important role in the world of cryptocurrencies due to its specific operating system. This fact has allowed him to grow and become the largest DEX in the world of cryptocurrencies.

What is USDT (Tether)? 

Stablecoins or stablecoins are starting to change the way we mobilize and protect our funds from fluctuations in other cryptocurrencies. This is exactly one of the functions of the USDT. It is a cryptocurrency that is always worth one US dollar.

What is a Wallet (Purse or Wallet)? 

The wallet allows you to store and exchange cryptocurrencies without anyone's permission or mediation. There are different types (web, desktop or mobile) and even physical wallets called cold wallets.

What is a Whale? 

It is a symbolic term that describes a person or group of people who coordinate with each other, who hoard a large amount of currency and are able to drive the market (trend) to increase or decrease the price (wave).

What is the Whitepaper? 

The whitepaper or white paper is a technical document that describes the main characteristics or attributes of a project (token) based on blockchain technology and its corresponding cryptocurrency.


With these concepts and the analysis of cryptocurrencies, you can already get an idea of ​​which token to buy or invest, to know more about it, you can search for analysts on YouTube who analyze different tokens or cryptocurrencies on a daily basis.

Twitter is another source where you can find an established community on different tokens where you can keep track and make your investment in the long term.


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