AI Directory , Bitcoin, blockchain — you don’t need to be a technology or fintech enthusiast to hear these words regularly in the news. With the rise of cryptocurrency and its promise of becoming a new and unique system for making payments, it’s no wonder why investors are intrigued with this highly speculative investment.

But how can you assess whether this ethereal asset is worth adding to your portfolio? Despite its soaring popularity, it is still relatively new and thus carries more risk than most investments. As such, it’s a great idea to familiarize yourself with the basics of this emerging market before jumping in.

YouTube 4000 Hours: Fast-Track Your Channel’s Growth to Monetization

Cryptocurrencies are digital tokens that allow users to make direct payments to each other via an online system. This is unlike national currencies, which get some of their value from being legislated as legal tender. Instead, cryptocurrencies get their value from being widely accepted as a means of payment.

With this in mind, it’s important to review a cryptocurrency’s price history and its current market capitalization. If you notice a constant downward trend over time, this could be a sign that interest in the project is fading.

Another helpful tool is to look at the cryptocurrency’s company road map, which will outline a timeline of how the project will accomplish its goals. Ideally, this information should be easily accessible in the white paper or on the company website. If the roadmap lacks clear details of how the cryptocurrency solves a user problem, this can also be a red flag.