How to properly evaluate a cryptocurrency before pouring all your life savings into it

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Back in 2009 when Bitcoin first started, choosing a cryptocurrency to invest in was not that hard because well, it was the only one around at that time. Fast forward to 2017 and there are over a thousand different cryptocurrencies to choose from (see www.coinmarketcap.com). Some of these coins are backed up by amazing technology, with real world practical value that could potentially revolutionize how we do things today but some of them...well all I can say is you will be better off buying your grandma's wooden spoon than investing your money in them. But then how do you tell which coin is great to put your money into and which is not? With so many of these coins to choose from, it's quite easy, and frankly, also quite understandable to get a bit confused . Here is a practical checklist that you can use to try and filter the wheat from the chaff.

Technology
You first have to look at the technology and the problem that it is trying to solve. Does it have any real world practical application? If the answer to that is yes then that is most probably a good coin to invest in.

Team behind the project

A great team behind a project increases the probability of the project being a success. Browse through the project's website and look for the team. Try to read about their background. If possible also verify the information on linkedin and other social media. An endorsement from reputable, well known people (Ethereum's Vitalike Buterin, for example) is also a great way to tell if the team is a capable one or not.

Total supply of coins
This is kind of subjective but I personally prefer coins with a reasonably low supply. As a rule of thumb I prefer coins with a total supply of under 100 million coins. In my experience, coins with a large total supply (over a billion in circulation, for example) seldom have drastic increases in price. After all, low supply and high demand means an increase in price right?

Regular Communication from the team

If the coin is still under development, a team that is constantly engaging with it's supporters shows commitment from the team and hence, a determination to make the project a success. For me personally, if a team is not constantly giving out updates about it's project, I usually stay clear.

White Paper

Last but not least is the white paper. If you've got time, take time to read a project's white paper before investing any money in it. This is where you will find all the information about a coin with regards to but not limited to the vision of the project, the development team's road map, etc. A hastily written whitepaper with a lot of grammatical and spelling mistakes is usually not a very good sign.

Whilst the aforementioned information should not be taken as investment advice, it will be quite useful when you are searching for a really good coin to invest in. Just bear in mind that the cryptocurrency world is very unpredictable and there isn't any sure way of knowing how a coin will behave in the future. I hope these indicators will help you get less bumps and bruises. If you have any other suggestions , please feel free to share them with other Steemians in the comments section below