What Makes a Genuine Cryptocurrency

The Blockchain

When planning to invest in a cryptocurrency, the first thing you should do is find out if they have a Blockchain that is viewable by the public via a block explorer. A Technical Whitepaper usually describes the internal workings of their blockchain. If they don't have a Technical Whitepaper describing how they mine their coins, chances are, they don't have a blockchain yet, and only raking in money from investments and membership fees.

Blockchain is the heart and soul of a cryptocurrency. Just like a human body, without a soul and a beating heart, the body is dead. Without a blockchain, a so-called "coin" is also as dead as it can be. Everything else outside and disconnected from the blockchain is pure hype. Because through the blockchain, all features of a cryptocurrency must be inter-connected in order for it to be considered a genuine coin.

Tradeability

The next consideration you must think about is whether your cryptocurrency is tradeable or exchangeable into other currencies in legit trading or exchange sites. Keep in mind that there are hundreds of cryptocurrencies in the market today (~600+ during the time of this writing), and a lot of them are pretty much useless or no value at all. But that doesn’t make them a “fake” coin. The fact that they are there on the list makes them genuine but without much value.

Fake coins are totally not available in any legit exchange sites, because no real exchange site will accept a fake cryptocurrency. Anybody must be openly able to buy and sell a cryptocurrency and not limited only to so called “distributors” or exclusive members buying and selling amongst themselves only. Usually in this kind of scenario, they are only fooling each other of their price.

Usability

The third among many others is the usefulness or usability of the coin itself. Can you actually buy goods or pay for services using your cryptocurrency? Are there merchants readily accepting your coin as mode of payment? Are there developers supporting your cryptocurrency in their development projects? If both of these are not present, and if there is no external community supporting your cryptocurrency, except their so called “internal community” of distributors or marketing partners, then there is not much “usefulness” that your cryptocurrency can offer. And most likely, your cryptocurrency does not exist at all.

Written by Larrimar Tia @ facebook.com/larrimar