According to the Coin Market Cap website, there are more than 1,000 cryptocurrencies in the world that are open for investment. More than 50% of the capitalization of the cryptocurrency market falls on the TOP-5 projects, but this does not mean that other cryptocurrency projects are not worthy of the attention of investors. True, the task is becoming more complicated – most of the existing projects roll up in a few months, new ones appear in return. ICO (initial placement of tokens) takes place almost every day and the task of the investor is to assess the reality of the project and avoid investing in potential hyips.
Cryptocurrency projects and HYIPs – how to invest correctly
HYIP – a pyramid that is created with a single goal: to attract investors with a beautiful legend and pay profits by attracting new investors. The viability of the HYIP depends on the appetites and the greed of its developers.
Blockchain application – a cryptocurrency project developed on the basis of the blockchain technology, offering a real idea. If the idea is perceived by investors positively, then the project earns on the growth of the cryptocurrency rate (which ensures transactions within the project) and commission. Investors also earn on the course and on the successful implementation of the idea. The project may not be a HYIP, but be unprofitable. The risk that after the ICO rate of tokens will fall, the investor bears.
How to distinguish a blockchain project from a hype:
- Check for a cryptocurrency project in the Coin Market Cap site list. If the cryptocurrency has already passed the ICO and the project has been launched, it will definitely be on this list. Example – One Coin. The project has been positioning itself as a cryptocurrency for several years, as a matter of fact being a pyramid, it is not on the site lists. But the presence of the project in the list does not mean that the real project is before the investor;
- estimate the profitability of the project. Any HYIP developer will make contact with a potential investor, trying to attract him at any cost. The promise of income (especially fixed) – a sign of HYIP. No real project developer can guarantee the success of an idea. The investor invests money in a venture project;
- Get acquainted with the nature of the issue. It is unlikely that the investor will have the possibility of mining, this is allowed in the BTC, ETH projects. But the issue, controlled by the developer without restrictions – a sign of HYIP. Ideally, tokens are a one-time issue at ICO;
- ask all sorts of questions to the developer. A serious cryptocurrency project has not only a well-designed design, but also a developed path of development. The project developer can tell in detail about what the project is, how it will work and generate profit. True, a good long-term HYIP can also have a worked out legend;
- referral program is a sign of hyip. A real project attracts investors with the idea and the opportunity to make money. HYIP attracts investors with obsession, promises and referral advantages.
At the time of ICO, it is relatively difficult to distinguish between HYIP and the project blockchain. Moreover, if the investor does not understand the technologies of cryptocurrency projects. Already in the first month of the project’s existence, the real goal of the project becomes visible. Therefore, consider yourself a professional and willing to take risks – invest in ICO, profit after placement can be 50-100% in the first days of placement. Not sure – do not take risks. Wait at least a month and then analyze the project’s performance and find feedback from those who have already invested cryptocurrency in the project.