The Lifecycle of a Cryptocurrency – Part 2

One of the musts on your to-do list, before you invest in a new coin, needs to be learning about the identities of the developers, but you need to remember that doing so is not a surefire way to avoid problems. Bitcoin was created by anonymous developers. Also, there have been instances in the past when people willingly shared information about themselves, yet were running scam projects at the same time.

When it comes to doing research, Google and other search engines are your friends. Enter the names of the developers into the search engines and social networks such as LinkedIn and see what comes up. It is also useful to run searches on the forum handles of the anonymous developers. Typically, people use the same online handle or nickname on multiple forums and in multiple online communities and you’ll be able to find a lot of information just using an online handle.

Read all the information about the coin and the team carefully and attentively. If there is something you don’t understand or have questions about, go to the main thread and ask questions in the thread. If the coin goes under and nobody knows anything about the developers, it is much harder to take legal action about them. At the same time, if a developer resides in a country with an established legal system, such as the United States or the United Kingdom, and is willingly sharing information about his or her identity, it is very likely that the developer has serious intentions about the project.

Is it fair to form an opinion about someone by simply looking them up online and researching the history of their posts on the forums from years ago? No, it is not. Ideally, you’d like to meet the person, look them in the eye and have an in-person conversation about what they are doing and about their experience. Unfortunately, this is not always possible, especially when dealing with technology projects because developers can live anywhere in the world. Because of this, investors and cryptocurrency enthusiasts have to use imperfect shortcuts.


Launch of a New Coin

Developers usually announce the date of the launch on a forum in UTC, which is Coordinated Universal Time. When a launch starts, you should have unrestricted access to both mining software and wallet software. Beware of projects that require users to compile the code. While code compilation is a rather simple procedure, making users download the code and then compile it does add a layer of complication, which is not what legitimate developers usually do. Developers that are serious about the success of their projects are most likely interested in attracting as many users as possible, which can happen if they make things as easy as possible. Therefore, you should be very careful if you think that someone is making things complicated on purpose. This may mean keeping mining to a select few, which should be a red flag and an indication of an instamine. During the few hours or days of a launch there may be gaps in communication because developers have a lot of work and need to deal with a lot of issues, but a legitimate project will sort the quirks out within several days. This means that even though you should not expect an immediate response to your question or message, you should hear back within up to a week. If developers are not interacting with the community in a prompt and professional manner during the launch, which is the time when the stakes are really high, it is likely that they will continue neglecting the needs of their users after the launch is over, too.


First Six Months of a Coin

Several weeks after the launch, a coin should be coming along according to the original vision of the developers outlined in the whitepaper and forum posts. The birthing pains and launch friction should go away with time. At this stage, one of the main goals of the team behind the coin is to find markets where they trade their coin and make it available to the general public. Up to this point, serious developers would often buy coins back from miners communicating with them via forum threads and direct messaging. The price is often established on the case-by-case basis, which is why it is okay for the price of a new coin to fluctuate greatly during the first several months of the life of the coin.


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