In this article I will guide you through the process of evaluating cryptocurrencies for their future potential. Although it could take a lot of time and effort to evaluate cryptocurrencies, it is an absolute must in my opinion. Do not invest in any cryptocurrency by blindly following someone else's advice. You will be investing your own hard-earned money, so better follow your own intuition.

Development Team

Although most cryptocurrencies are completely decentralized, they are still being developed by a team of dedicated developers. So, one of the first factors to investigate is the team that is behind each cryptocurrency. Do they have a good reputation? Do they have any previous successes?

Nearly all of the cryptocurrencies that I have evaluated have a specific "Team" page on their website. Here you can find pictures of the entire team with most often a short introduction of each team member and their advisors. If you would like more information about their team you could Google their names, visit their Facebook and Twitter pages, etc. This will give you a pretty good indication of the development team.

Why is this the first factor I take into consideration? See, an idea can be extremely good, but if the team does not have what it takes, the project will most likely fail at some point. The competition in cryptocurrency is already extremely fierce.

Decentralization

Cryptocurrencies are supposed to be decentralized. This means that there should be no central institution 'governing' the network. Sure, there have to be developers, but they should not be able to issue more money whenever they feel like it for example. Besides, all of the code should be open-source, which means that everyone should be able to see how the network has been programmed. Everybody should be able to participate in the development of a cryptocurrency.

This is exactly what's so revolutionary about cryptocurrency. We have been fooled by central banks long enough, way too long. As long as they can control and issue money, they do not care who is governing a nation. If you control the money we all use, you have absolute power over all the people. This has been bugging me for a very long time, and cryptocurrency (or the internet) is going to change the world completely. Cryptocurrency is the arch nemesis of the extremely rich, and they realize this damn well.

Usability

Satoshi Nakamoto introduced the very first cryptocurrency: Bitcoin. In his whitepaper he stated that Bitcoin was a peer-to-peer electronic cash system. Everything was going well for the first few years, but soon its maximum network capacity was reached, and the transaction costs kept rising with it.

At this point, Bitcoin had basically become unusable. At the time of writing there are well over 170.000 unconfirmed transactions on the Bitcoin network, so each transaction could take a day (or even more) to be verified by its miners. It has become more of a collectors item than a functional peer-to-peer electronic cash system.

See, cryptocurrencies are supposed to be a thousand times better than our old payment methods. They are supposed to be fair, safer, cheaper, and easier, to say the least. So, this is a very important factor to investigate when you are evaluating cryptocurrencies. Is the cryptocurrency actually doing what the developers have promised?

Finally, you should assess if the cryptocurrency is accessible for the masses. Is it being supported by most online exchanges? Are there enough websites providing relevant information about it? Are there enough (hardware) wallets to store the cryptocurrency? These are just some example questions, but they are important for the development and adoption of the currency.

Scalability

Scalability is all about thinking about the future. As soon as a cryptocurrency is bought and used by A LOT of people, its network should be scalable. This means that its network capacity has to be upgraded so it will be able to process more transactions per day. There really should be no maximum to this, so it will work no matter how heavily the network is being used.

The best example for this is Bitcoin itself, which has failed tremendously in this category. Another example is Ethereum. Its network is already running on over 50% of its capacity, and it has not been adopted by the masses yet. Ethereum has about 800.000 transactions per day. Imagine if ten times as much people would use Ethereum, it would reach its maximum capacity in no-time.

Alright, I do realize that its network capacity is being clogged by games like CryptoKitties and Etheremon. I just do not understand how anybody can come up with this idea and basically kill one of the most revolutionary blockchains to date.

The best cryptocurrencies to date (in the scalability department) are Steem and Bitshares in my opinion. Steem already processes over 1 million transactions per day, and today it has already processed a record of 1,155,679 transactions on just 0,1% of its capacity. These blockchains are definitely ready for mass-adoption.

Price & Market Capitalization

Honestly, at this stage of adoption, I personally do not care about the prices and market capitalizations. Alright, it would be good to buy at a lowest possible price, but in my opinion the prices of the best cryptocurrencies are going to skyrocket anyways. This will most likely happen as soon as the masses start to enter the market, which should be somewhere in the first half of 2018. If you know what you are doing, and understand how important blockchains will be in the future, you will make incredible profits.

Contributed by @infinityroad

If you want to evaluate cryptocurrencies, write down the 5 topics:
Development Team, Usability, Decentralization, Scalability and Price & Market Capitalization

Score every point about 0-5 points.
If you like at IOTA for example, the scalability would get 5/5 and so on..

Then you sum up all given points.
If you get at least for example 20/25 points you can think about investing in.

Suggestions & Corrections

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