There are several cryptocurrencies in the market. Dozens of new tokens get flooded on crypto exchanges daily. We have UpTokens (USN).
According to Investopedia, there are more than 4000 cryptocurrencies listed on tier-1 exchanges. We are not even talking about the unlisted tokens that lead nowhere.
Making a token is easy. Even if someone has basic technological knowledge, that person can make one.
Now the real questions – why do we need so many tokens, and how to decide your investments?
What was the need for so many cryptocurrencies when we had Bitcoin?
The underlying blockchain technology allowed developers to create their applications. That made them create different cryptocurrencies with their functionalities.
We indeed have thousands of cryptocurrencies, but all of them are different.
Some of them are trying to solve real problems, while most tokens are created for fun.
Every primary cryptocurrency has a purpose and a community supporting it. No token can ever succeed without the acceptance of its community.
Bitcoin (BTC) was developed to decentralize the payment systems. We can’t ignore the fact that it got the first-mover advantage.
Similarly, Ethereum (ETH) was created to build and publish distributed applications (dapps) to solve the problems like downtimes, frauds, and attacks.
Some platforms create their cryptocurrencies to use on their platforms. Users need to buy those coins and use them on their platforms. Like the virtual coins used in video games, users can exchange these cryptocurrencies for value.
Binance Coin (BNB) is an excellent example of a utility token for discounted trading fees on the Binance cryptocurrency exchange.
Let me talk about us. UpTokens (USN) is helpful for circulation in the UpSocial Network. Circulation of UpTokens ensures that the value of tokens will keep increasing with time and usage by the community members.
But how do we take our call about crypto investments?
It’s tough. Let’s be realistic that the power of creating tokens has been decentralized, and every individual can do that.
That implies that there are strong possibilities that some tokens might be fake or even scammy.
How would you identify genuine tokens with some real potential?
Check out the purpose and vision behind creating a token.
If a token has a well-built website that explains its purpose, it is a great start. Further, you can check if there is any whitepaper. Whitepapers are strong indicators of the seriousness of the founders.
At UpSocial, we are heavily working on turning an idea into reality. It mentions how we are trying to make a decentralized social network.
All the details are mentioned in our whitepaper.
In a nutshell, it’s essential to know the use case of a crypto token. Shitcoins created for fun don’t have any!
Bonus Tip: Join the Telegram groups or communities of the tokens to check the activities of the company, project, founders, and the team.
Have you joined our Telegram Group yet? Get your doubts resolved on Telegram.