1. Pay attention to the team behind the development of the token

In the world of cryptocurrencies a lot depends on the founder. Bitcoin investor Tuur Demaster advises to look to the education of developers and their previous projects. It is good when developers are known for works in the field of cryptography, high-load systems, peer-to-peer networks or large open source projects. The more knowledge and experience they have, the less likely they are to repeat the mistakes of their predecessors.

Another advise: it is important to get acquainted with the developers — even not in person, but through their podcasts, videos or write them a message, asking a few questions about the products. You will see how quickly and distinctly they respond to them.

2. Carefully review the white Pater documentation and determine which problem the token is trying to solve

Usually, developers publish a technical document explaining the technical and economic features of the project. Since the main property of cryptocurrencies is decentralization, the document should clearly explain the benefits.

For example, cryptopleura Swarm City, not owned by a commercial company, so its services cheaper cost to the members of the network, which may bring on Board more drivers and, in turn, reduce prices for consumers.

3. Pay attention to the time of token issue

It is important for the investor to understand at what stage of the project development a token is issued. Some projects start only as a platform for the transmission of money and information and they can use existing cryptocurrencies. Later some of them plotting ICO. The investor should understand why the developers deviate from the original plan. Perhaps this is just a way to raise money.

4. Find out if the cryptocurrency platform can use ether instead of its own token

Experts offer to ask an even simpler question: "Can we imagine that the system works without this token?" or "Can this token replace the ether?"

For example, the currency that is not easy to replace is a REP token used on the Augur platform. It is a gambling platform on which users can bet on the outcome of any event, such as the outcome of the presidential election. REP tokens are not needed to place bets, but their owners influence the determination of the outcome of the event, and the reward is also paid in REP.

5. Explore The github repository

Usually cryptocurrency systems publish their code on the Github website. Here you can see how intensively the development is carried out — frequent version updates, on the one hand, indicate the activity of developers, and on the other hand, can indicate any problems of the project.

Experts recommend to visit the website CryptoCompare where the rating of projects is made. Cryptocurrency earns points, when the user puts code Github project to bookmark, make a copy for your own purposes, or develops at its own cryptocurrency. However, it should be borne in mind that old projects with such a system have an advantage over young ones.

If you do not understand what is discussed in the last paragraph, you should probably contact a familiar programmer.