Just like trading volumes, market capitalization and current price, developer activity is critically important yet easy to fake. Most of the best coins make their source code available for inspection on Github.com and you can check both the code and the activity of developers that happens around the code.
Most reputable coins have a link to their software depository on their websites. If for some reason you can’t find the code, you can always use a search engine and the keyword “[Name of coin] Github” to find the repository.
There are two parameters to pay attention to when evaluating a repository of a coin. They are: pull requests and commits. A pull request is a suggestion about a bug, modification, improvement or issue. When a developer sends a pull request, the developer community can discuss the suggestions and come to a conclusion about what to do with them.
A commit is a modification that has been accepted and added to the source code.
Developer activity parameter plays a crucial role because it shows investors how serious developers are about their code. If you see a coin with a low number of commits or commits don’t happen often, it means that a developer is not working on the coin. For this reason, it is very likely that at some point the coin will become irrelevant and fall into obscurity, leading to a loss of an investment.
One of the exceptions to this rule is when developers are working on a major release and don’t have time for minor changes. Even if this is the case, you should see commits every two weeks or so. Also, you would want to see updates about the major release, its progress, and status. No matter how busy developers are, there will be minor issues that they will need to deal with and if you see developers rarely posting commits, it may be a sign of deeper issues.
It is possible for developers to create a lot of minor submits and show high activity this way. Changes that are very small and take a few minutes most often don’t add any value to the coins. A large number of such changes is a potential red flag.
How to Evaluate Source Code if You Are Not a Developer
Unless you are a coder yourself, there are two ways for you to figure out what is going on with the code and check if developers are active and legitimate.
The first is to use a forum such as BitcoinTalk.org to find out about the number of recent updates and releases and types and numbers of new features in these releases. When learning more about new releases, you want to pay attention to three criteria.
The first one is regularity and adherence to schedule. You want to see that developers update their code regularly and do what they promise in their announcements.
The second one is the number and quality of new ideas and their implementation, especially when it comes to features that make a coin unique. Many altcoins are simply clones of Bitcoin that contain minor modifications and aren’t even worth looking at. Developers of new reputable coins know that their coins need to stand out from bitcoin and have value, which is why on the websites of reputable coins you will see a detailed and clear description of what makes these coins different from the competition.
Finally, quality developers will not only respond to pull requests but also add comments and annotations to their source code.
The second way to evaluate the quality of code and the integrity of developers is to check how often developers add features that interact with core wallet software. If download core wallet software for a new coin and see a lot of features that you have never seen before, it is a very good sign. It means that developers are trying to create something new and original. Once you see new features, spend some time figuring out what they are and how they work. Reputable developers will make documentation available to users and have instructions that are easy to follow.
If you see a coin with a wallet that is a clone of another core software wallet and you can’t find any new features, you probably want to stay away because it is very likely that the coin is just another bitcoin clone.