Key features of cryptocurrency project is doomed to failure
We live in the heyday of the cryptocurrency market, even now on the market run by the bears. Events are developing rapidly. Someone desperate selling bitcoin at a loss, someone, on the contrary, I’m sure it is the right time for investment has finally arrived.
Of course, everyone would love to have the bitcoin rose above 12 thousand dollars, but it has to be real growth. The inflow of foreign funds should not increase the value of the cryptocurrency, in contrast to growth within the ecosystem. 2017 was the year of the ICO and this was an important factor increasing the value of the cryptocurrency. To replace him came in the year of valuation and regulation, the year of false hopes and forced wait.
2018 has not brought anything new to the cryptocurrency market. Blockchain revolution is not embraced another traditional sector of the economy. In 2017, this sector was the raising of funds. Now we must ask ourselves: what’s new in the ecosystem since? Perhaps the answer will lead us to the exit of the bear market.
Today there are myriads of blockchain projects that require the attention of investors. Of course, this game is just beginning, and bet on the winner is not as easy — but you can always determine who is obviously doomed to failure. Here are seven signs that the cryptocurrency project will lag behind the market.
Don’t let your emotions interfere in the evaluation of these factors. If the project has revealed one or two signs from this list, it’s not a reason to sound the alarm, but if they were 4 or 5, this is clearly a bad sign.
1. Failure from the very beginning to adhere to the timeline
It is a sign of incompetence. If you are already in the early stages of the project the team has to carry the target and to change the road map, it is a very bad sign. Even if that moment has been achieved, behind schedule should be alerted — especially if the project has only a couple of months.
The company can be charismatic founders and a talented team, but behind schedule in the early stages says only one thing: incompetence.
This does not necessarily mean that cryptocurrencies need to sell, but definitely makes it less appropriate long-term investment.
2. Inconsistency in the positions of leadership
The fact that the blockchain decentralized technology, does not mean that it is possible to go without a guide. Its structure may differ from traditional models, but someone needs to be responsible for the project, both for their own offspring.
With decentralization, each of the crypto project may be many persons and voices, but if you notice a divergence of opinions among the leadership, it means that something went wrong. It can start with small things, like disputes about how much time it will take to solve a particular problem. This, of course, not talking about cases when someone of the managers is not sufficiently informed; the main reason to be suspicious — the divergence of views among the founders or key team members. It is a sign of imminent conflict.
If the difference is quickly eliminated, it is possible not to pay attention, but if such situations arise frequently or last long, it is a reason to sound the alarm.
3. Reluctance to answer important questions
There are many ways to answer the question, and one of them is the evasion of the answer. Choosing vague wording, you can convince the listener that the information you provide is relevant and sufficient, and not saying anything on the merits. When the founders and project managers shy away from important issues is a sign of stealth, and stealth is definitely not the best property if we are talking about a decentralized project.
If the question is trivial or relates to the long term, a vague answer is acceptable. In all other cases it’s a bad sign. If the person asked the question, do not know the answer, he should honestly be warned about this.
Invest in a decentralized project, which has the secrets, is to buy an iPhone on which you can call.
4. Sure you have too many conditions for successful implementation of the project
If successful implementation of the project need to 80% of the tasks were implemented in strict accordance with the idea, it’s a bad sign — it suggests a failure of the business model. The more factors determine the success, the higher the probability of failure.
Life is unpredictable; circumstances are changing rapidly. If the project has no significant “margin of safety”, almost certainly at some point something will go wrong.
If you understand that only one detail can be a critical factor for the success of the project, it is better to stay away.
5. Weak community
Many projects have a dream to attract a large community to facilitate fundraising, but when problems arise, it ceases to be a valuable asset.
In addition, broad audience will not necessarily cohesive. It is important that the community is not dominated by speculators and people who genuinely confident in the success of the project. For example, if the company operates in the field of healthcare, you should pay attention to what part of the community are doctors and other professionals from the same industry.
The lack of strong audience greatly reduces the chances of the project for widespread adoption, and without that it is hardly possible to talk about success.
Remember: your goal as an investor is to join the winners, not the losers inspire. Leave the inspiration to the large funds and corporations.
6. Existing successful centralized counterpart
One popular expert often said that most cryptocurrency projects nobody needs, because they are far to compete with centralized solutions. This is a strong argument. If the problem cannot successfully cope with by using centralized mechanisms, the blockchain-the decision will be obviously more demanding. Enough minor disappointment of the public, to the credibility of the project fell, and his tokens are worthless.
What is the point to look for a centralized solution centralized counterparts if it is successful? To criticize and ridicule the weaknesses of the centralized model can be anyone, but can you yourself claim to such success?
Beware of projects that avoid these issues — or at least be extremely careful.
7. Dramatic change in the rules of participation
It seems that it is a trifle, but in fact it is a very bad sign. When the project is truly decentralized, no one can just up and for no reason at all to change the rules. If this happens with decentralized project, it says that it’s not very decentralized. So, you sold a pig in a poke.
Changing the rules of participation without consensus — a kind of lie. This may be an unintentional lie, but it’s still a lie. Consensus — based decentralization. No one can compel parties to comply with rules that are not specified in the White Paper. And even if it had happened in some detail, there is no guarantee that future changes will not affect the really important things.
Finally, we recall that it is only an indication and nothing more. Project managers may notice these signs and eliminate the problem before it will let you know. Otherwise, the project risks being a disappointment — and this is really unfortunate, if we remember that we live in the heyday of the cryptocurrency.