As an avid cryptocurrency miner, I’m always on the lookout for the next breakout project. My current mining arsenal consists of a modest AMD Vega 64 GPU rig so I’m lazer-focused on any project that utilizes the CryptoNightproof-of-work algorithm, as Vegas GPUs are highly efficient at mining it. In the past six months or so, I’ve noticed that there has been a notable increase in the number of new CryptoNight projects being announced. Whether this is due to the popularity of the Vegas GPUs, more user demand for truly private cryptocurrency transactions, or the greater availability of viable GitHub code libraries from which to fork new projects from, I cannot say. What I do know is that with so many new projects around, evaluating the potential success of one is becoming more and more tricky. Because mining costs me electricity, I need to be very smart about what I mine. The last thing I want to do is waste my precious hash power on project that doesn’t end up surviving.
Unlike cryptocurrency projects which debut via an Initial Coin Offering (ICO), many new, mineable cryptocurrency projects, including the CryptoNight ones that I hunt for, usually start off with a simple announcement on Bitcointalk forum’s Altcoin Announcement board or on other similar forums. In many cases, these announcements share limited information about the project. I’ve seen project announcements lacking information about the project’s vision, features & functionality, team, development roadmap; or about standard resources such as a website, GitHub library, mining pools, and even a non-GUI, basic wallet!
So with a typical lack of information, how then does one even approach evaluating a new cryptocurrency project? Well, I’m glad you asked!
I’m going to share with you, my own evaluation method, and then talk about a new CryptoNight project that I’m quite excited about – Alloy.
There are 3 early indicators of success that I look for in any cryptocurrency project
1. A thoughtful website with a clear development roadmap
At a minimum, a thoughtfully constructed website shows that a base level of commitment was made to the project. The project team put in the time (or their money) to create a website that immediately helps to differentiate their project from those that rely only on their [ANN] thread on some forum. Including a development roadmap instills confidence in early investors that the project team is organized about what they plan to accomplish and understands their strategy to get there.
While many initial investors look for an exchange listing right off the bat, I consider a listing as a bonus. Being listed on an exchange early on obviously allows miners to turn a quick profit and purchasers to buy a decent-sized stack of coins at a low, entry level price. Personally, I feel that it’s much more important for a new project to focus on building confidence that it can deliver on its promises before trying too hard to market itself as a viable and valuable tradeable asset. (*cough* Tron)
2. A resourceful and responsive development team
Many new, mineable cryptocurrency projects run into technical challenges very early on. They have to contend with initial blockchain-synchronization issues between mining pools, bad code inherited from the forked codebases that needs fixing, NiceHash/botnet “attacks,” etc. Sometimes new projects don’t even make it out of the starting gates due to these issues!
Anyone in crypto will tell you that a resourceful and responsive development team is the foundation of any good project worth investing in. To me, what clearly demonstrates these qualities is a development team’s ability to quickly, calmly and effectively address any early technical challenges encountered.
Mike Tyson once told a reporter that “everyone has a plan until they get punched in the mouth.” Nothing will expose a development team’s true potential (or lack thereof) faster than asking them to problem-solve under pressure.
If early technical issues aren’t addressed in a timely, organized and complete manner, the community will quickly sour on the project and leave for greener pastures. There are many failed, or soon-to-be-failed, projects out there with nothing more than a barren Discord channel and a mining pool network with little to no hash power.
3. An active community and engaged project team
Last but not least, I try to size up a project’s community support coming right out of the gates. With so many new cryptocurrency projects being announced every day, capturing the mindshare of new investors is an enormous challenge. The announcement of a new project is an exciting time and normally attracts a decent amount of attention. When a project is effectively able to harness this initial momentum to start building a solid community around the project, it is far more likely to succeed. It is this community who typically promotes the project early on, before any real marketing efforts can be afforded by the project team. The community also provides support to any new investors who have questions about the project or need help with a technical issue they’ve encountered.
Regular community engagement by the project team helps to fill in any of the early informational gaps that might otherwise create FUD in a potential investors’ mind. It’s also another good indicator that the project team is sincerely invested in the development of the project, as well as its community.
Okay, so now that you know the early indicators of success that I look for in a young cryptocurrency project, let’s talk about Alloy!
Alloy – The Next Generation Anonymous Cryptocurrency
Alloy is an ASIC-resistant, CryptoNight-based cryptocurrency that puts user 100% user privacy at the forefront. Similar to other privacy projects, Alloy aims to deliver a fast, secure, anonymous, and truly fungible digital currency to its users. Alloy has a maximum supply of 84 million coins, a 180 second block transaction time, and already trades on the TradeOrge exchange under XAO with a BTC trading pair.
While Alloy is forked from the Bytecoin codebase (which Monero also forked from), its development has already started down its own independent path.
The obvious question, of course, is given that there are many other privacy-focused projects out there, including its ancestors Bytecoin and Monero, why should you even care about Alloy?
Why don’t we evaluate Alloy against my 3 early indicators of success?
1. A thoughtful website with a clear development roadmap? Check!
Alloy has an original and attractive website with a lot of useful information about the project, including its development roadmap, a link to a working faucet, mining pool information, as well as downloads of paper, command line and GUI wallets. While I would have preferred to see a roadmap with milestone dates, given that the project is less than two months old and having spoken with their project team about this, I’m willing to overlook this as I know that an updated roadmap with timelines is forthcoming. Also, as previously mentioned, Alloy is already trading on an exchange, which is a bonus.
2. A resourceful and responsive development team? Check!
Within the first two weeks of Alloy’s Bitcointalk announcement on January 2, 2018, there were some unexpected blockchain synchronization issues which caused transaction processing errors for anyone mining XAO. Ultimately, the development team was forced to reset the blockchain which of course would wipe out any record of mined or traded coins. Not only did the development team quickly update the source code with the necessary fixes, they did so while providing regular status updates. They also ensured that anyone who had already mined or traded XAO on the previous blockchain were issued a full refund once the new blockchain was restarted.
More recently, as Alloy has become more well known, it saw increased hash power join its network. Unfortunately, along with the welcomed, long-term hash power, came unwelcomed short-term rented/stolen hash power from NiceHash/botnets. All of the short-term hash power quickly skyrocketed the overall network difficulty, making it very problematic for smaller miners (like me!) to mine any decent amount of coins. The development team listened to the concerns of its loyal mining community and was quick to communicate their plan to address – an updated proof-of-work algorithm, resistant to rented mining services and botnets.
3. An active community and engaged project team? Check!
If you join Alloy’s Discord channel (and you should!), you’ll see that there is an active and vibrant community growing around the project. There are chat rooms dedicated to a number of topics and foreign languages, with conversations about Alloy taking place around the world. Compare and contrast this against many other projects whose chat channels sometimes go days without anyone saying a word. Additionally, the project team, including the developers, are very active in engaging with the community. This is always a good sign as it demonstrates that they care about their project, its community, and are open to listening to the community’s input.
I’ve had the opportunity to chat with various project team members and I can tell you that from what I’ve seen, this is a talented team of individuals who are passionate about Alloy and are driven to see it succeed.
When you look back from just a year ago, you’ll see that privacy coins such as Monero, Dash and Verge saw incredible returns – upwards of 1,500,000%! As more people realize that Bitcoin and other cryptocurrencies are not truly as anonymous as they once believed, I strongly believe that privacy-focused projects, like Alloy, will continue to garner attention, adoption and investment. Unlike more established privacy projects however, Alloy offers a much greater potential return on your investment while still delivering many of the same privacy and usability features today. Things will only get better from here and while the future is always uncertain (especially in crypto), as far as bets go, Alloy feels like a good one to me!
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