The Crypto Cheat Book

Proof
Copy: Not optimized for high quality printing or digital distribution

Dear
friend,
Before
starting
this
enriching
and
insightful
experience
with
you,
I
would
like
to
thank
you
for
showing
an
interest
in
this
work.
The
intention
to
write
this
book
truly
came
from
the
bottom
of
my
heart
and
my
deep
love
of
the
crypto-community.
Thus,
any
useful
information
that
I
may
provide
you
with
brings
me
closer
to
my
goal:
help
you
prot
from
the
unique
and
incredible
investment
opportunities
around
the
blockchain
technology.
The
information
shared
with
you
in
this
book
comes
from
the
experience
that
I
have
accumulated
investing
and
trading
cryptocurrency
and
in
the
last
two
years
researching
and
learning
about
it.
While
my
path
has
not
been
a
straight
line
to
success
(I
do
not
consider
myself
successful
yet!),
I
managed
to
be
protable
and
develop
a
solid
technique
when
seeking
investment
opportunities,
a
technique
that
I
want
to
share
here
with
you.
Last,
but
not
least,
I
wish
you
to
be
successful
in
this
niche,
as
I
truly
believe
that
this
is
a
unique
opportunity
to
multiply
your
wealth
and
gain
knowledge
of
a
yet-to-be-discovered
treasure,
which
is
blockchain.
Artem Bespaloff,
Proof Copy: Not optimized for high quality printing or digital distribution
A
Crude
Marketplace
As
of
August
2017,
the
digital
currency
marketplace
is
vaguely
regulated,
unknown
to
most
people
and
its
full
potential
is
yet
to
be
realized.
If
you
are
reading
this
today,
you
can
consider
yourself
one
of
the
few
lucky
people
in
the
world
who
has
found
out
about
this
fantastic
investment
opportunity.
Chances
to
build
great
wealth
in
the
cryptosphere
are
existent,
but
you
need
to
be
able
to
adapt.
For
this
reason,
there
are
some
basic
techniques
that
I
want
to
share
with
you
to
help
you
craft
a
sharp
analytical
mind
when
it
comes
to
investing
in
decentralized
currencies.
In
the
rst
section
of
this
book,
we
will
consider
certain
predominant
factors
to
acknowledge
before
investing
-
such
as
your
budget,
your
attitude
towards
risk
and
your
investment
goals.
In
the
second
section,
we
will
proceed
with
analyzing
the
dierent
types
of
cryptocurrencies
and
Initial
Coin
Oerings
and
classify
them
into
dierent
categories.
In
this
section,
you
will
also
learn
how
to
scrutinize
each
dierent
asset
before
making
an
investment
decision.
I
would
like
you
to
especially
pay
attention
to
this
segment,
as
I
believe
it
provides
you
with
precious
knowledge.
In
the
third
section,
I
will
discuss
dierent
factors
that
have
proven
through
time
to
inuence
price
movements,
and
how
to
determine
highest
and
lowest
price
values.
I
will
support
this
data
with
a
few
examples.
Hopefully,
this
guide
will
put
you
on
the
right
path
to
building
wealth
within
the
crypto-
community.
Disclaimer:
Please,
do
not
consider
the
information
contained
in
this
book
as
investment
advice.
I
am
not
a
nancial
professional
and
please
assume
that
my
subjective
mind
might
have
inuenced
the
content
of
this
book.
Good
luck!
Who
Are
You
As
a
Crypto-
Investor?
(If
you
are
not
a
complete
beginner
you
can
skip
this
section
although
not
recommended
!)
You
will
probably
think
that
these
questions
are
too
obvious
and
that
anyone
capable
of
logical
rationalization
already
knows
the
answers.
However,
my
point
here
is
to
help
create
a
more
clear
vision
of
the
overall
crypto-picking
process
before
jumping
into
more
specic
details.
I
also
believe
that
being
able
to
classify
yourself
as
an
individual
will
help
you
make
more
rational
decisions
down
the
path.
wHow
much
money
am
I
willing
to
risk
on
this
specic
coin?
(Obvious)
wWhat
is
my
overall
budget?
wAm
I
a
risk
taker
or
a
risk
averse
individual?
(If
you
hate
risk
this
universe
might
not
be
for
you)
wWhat
percentage
of
my
portfolio
would
I
like
to
be
composed
of
risky
investments?
wHow
much
do
I
realistically
expect
to
make
on
a
certain
coin
in
a
specic
timeframe?
The
answers
to
these
questions
will
be
largely
dependent
on
YOU.
However,
I
do
not
recommend
holding
a
signicant
stake
of
your
portfolio
in
what
I
call
risky
cryptocurrencies.
Risky
cryptocurrencies
tend
to
uctuate
much
more
in
price
than
other
ones
and
are
more
susceptible
to
price
manipulation
by
bigger
players.
Don't
worry;
we
will
dene
what
constitutes
a
risky
digital
asset
later
in
this
book.
While
all
"crypto"
is
considered
to
be
speculative,
some
currencies
tend
to
be
less
than
others.
Most
of
the
time,
I
do
not
suggest
you
to
hold
more
than
10%
of
my
portfolio
in
over-speculative
coins.
**Coins
that
I
consider
less
speculative
in
the
long
term
are
Ether,
Bitcoin,
Monero
and
other
long-performing
coins
(they
just
tend
to
perform
better).
My
reasoning
behind
this
is
that
the
roadmap
and
the
horizon
of
these
coins
are
relatively
clear
and
we
can
make
more
comfortable
predictions
as
to
their
price
direction.
For
now,
these
currencies
have
established
themselves
in
the
market.
Their
history
also
shows
us
that
betting
on
them
and
holding
over
periods
of
90
days
and
more
seems
to
be
a
reasonable
decision.**
Once
you
have
determined
an
answer
to
each
of
these
questions,
you
can
then
proceed
to
nd
a
coin
that
might
have
the
upside
potential
that
you
are
looking
for.
To
help
dene
it,
you
can
proceed
to
the
following
section
of
this
book.
Classifying
Cryptocurrencies
Almost
every
day
we
witness
the
creation
of
new
cryptocurrencies.
It
seems
like
there
are
so
many,
but
which
one
is
the
one?
In
this
part
of
the
book,
you
will
learn
an
easy
way
that
I
use
to
classify
dierent
assets
between
themselves.
Most
of
the
time,
I
separate
them
into
dierent
groups:
w
Does
it
use
its
own
blockchain
w
Is
it
a
modied
copy
of
another
blockchain
w
Does
this
coin
interact
with
another
blockchain
(ERC)
Individual
chain
projects,
such
as
Monero,
Ethereum,
Bitcoin,
Dash,
etc.
that
have
strong
developer
teams
and
are
aged
two
years
and
older
tend
to
beat
the
market
over
time
more
often
that
projects
that
are
a
copy
of
a
specic
blockchain
(a.k.a
Litecoin
but
we
will
talk
about
this
one
in
the
last
section
of
the
book).

w
As
a
rule
of
thumb,
I
always
research
the
project
managers
before
making
any
decision.
A
critical
factor
to
consider
is
the
role
of
the
cryptocurrency
in
the
decentralized
system.
Does
it
serve
any
purpose?
The
Golem
Team,
for
example,
developed
the
GNT
token
and
attributed
specic
use
cases
for
it.
In
this
case,
GNT
is
used
as
a
nancial
intermediary
between
decentralized
processing
power
requestors
and
providers.
Therefore,
the
value
of
this
token
will
simply
be
determined
by
the
forces
of
the
market
Oer
and
Demand.
If
the
Golem
team,
does
in
fact,
successfully
launch
their
project
we
can
assume
that
the
market
players
will
determine
the
value
of
each
GNT.
If
they
deliver
a
useful
product
and
there
is
growing
demand
for
it,
you
can
anticipate
the
value
of
their
token
to
increase,
and
vice-versa.
Currencies
used
as
'gas'
is
another
example.
Gas
units
tend
to
make
the
network
more
secure
by
forcing
an
attacker
to
pay
higher
fees
in
denial
of
service
attacks
and
make
the
code
behind
smart
contracts
more
ecient.
This
aspect
of
a
coin
usually
predicts
the
factors
that
will
inuence
its
natural
demand.
Ether
is
one
example
of
currency
used
as
gas.
How
are
the
coins
held
and
distributed
by
the
network?
Are
there
masternodes
that
freeze
signicant
amounts
of
coins
and
thus
decrease
supply
over
time?
Are
there
wallets
that
control
a
big
part
of
the
supply?
Dash
is
an
example
of
cryptocurrency
employing
a
masternode
system
to
help
validate
the
transactions.
Note:
I
tend
to
avoid
coins
that
have
no
other
use
cases
other
than
speculative
value.
Basic
economic
models
can
be
used
to
prove
that
this
is
never
a
good
option.
While
some
will
argue
that
at
money
has
the
same
principle,
I
strongly
disagree.
Fiat
money
is
the
only
legal
tender
ocially
accepted
within
a
community
(for
now).
As
long
as
99%
of
the
global
economy
relies
on
at
currencies
and
debt,
I
will
not
consider
them
to
have
uniquely
speculative
value.
Mainstream
adoption
is
what
eliminates
speculative
value.
wThe
value
of
these
tokens
is
rarely
justied.
Often,
they
tend
to
be
pushed
to
specic
price
levels
due
to
price
manipulation.
Sometimes,
they
were
just
an
intermediary
used
by
companies
seeking
to
fund
their
projects.
Example:
Dogecoin,
other
bitcoin
clones
and
currencies
that
I
will
omit
to
mention
here
as
I
might
oend
some
readers.
w
If
you
are
investing
in
an
Initial
Coin
Oering
(ICO)
research
the
market
for
other
similar
competitors
and
ask
yourself
in
what
will
this
specic
coin
be
dierent?Consider
that
if
the
team
members
have
a
successful
background
or
resume,
you
can
be
more
comfortable
assuming
that
they
will
deliver
the
project,
against
a
team
that
has
no
track
record
at
all.
Market
Capitalization
and
Past
History
A
useful
technique
is
to
compare
the
market
capitalization
(MC)
of
a
coin
to
the
high
average
of
the
top
10
(excluding
Bitcoin
and
Ether).
If
the
coin
that
you
found
has
a
relatively
small
MC,
a
ton
of
potential,
a
good
team
and
anticipates
positive
news,
you
can
be
sure
that
if
the
overall
cryptocurrency
trend
remains
bullish,
this
coin
might
see
a
bigger
increase
than
others.
Note:
As
of
August
2017,
I
consider
MCs
below
250
million
dollars
to
be
low.
Another
technique
that
has
helped
me
generate
thousands
of
dollars
in
prot
is
the
comparison
of
two
similar
cryptocurrencies
between
themselves,
against
the
leading
market
cap
averages
and
multiplied
by
the
chance
that
an
anticipated
release
will
impact
the
market
positively
(or
negatively)
Once
more,
remember
that
the
cryptocurrency
market
diers
alot
from
other
markets.
What
might
seem
rational/irrational
here
might
not
be
elsewhere.
I
tried
to
resume
it
with
the
following
formula:
(AVERAGE MKT. CAP OF TOP 10 COINS EXEPT BTC AND ETH) * ( % PROBABILITY OF UPTREND)
(YOUR CHOSEN COINS MARKET CAP)
*Please
consider
this
formula
awed
and
do
not
rely
on
it.

The
probability
of
takeover
is
the
chance
that
a
coin
ranked
in
late
MC
positions
nds
its
way
up
to
the
top
10
or
20
most
valued
coins.
Example:
Suppose
coin
is
valued
at
250
million
dollars.
Their
main
competitor
is
estimated
at
1.1
billion
dollars
and
is
the
7th
coin
in
ranking,
while
the
average
MC
of
the
top
10
coins
except
Ether
and
Bitcoin
is
1.8
billion.
However,
coin
is
anticipating
good
news
such
as
a
software
release,
alliance,
or
else.
After
the
publication
of
this
news,
both
coins
will
have
a
similar
competitor
advantage.
You
expect
that
this
news
will
trigger
a
bull
run
with
a
probability
of
70%.
Analysis:
This
means
that
70%
of
the
time
(or
0.7)
coin
will
approach
a
similar
theoretical
valuation
to
coin
.
Which
would
be
anywhere
between
[250m
,
1.8b].
This
means
that
70%
of
the
time
your
investment
will
be
a
protable
move.
Therefore,
for
each
1000$
invested,
70
percent
of
the
time,
your
prot
should
be
between
0%
and
[1.8b/250m
x
100]
%.
Note:
Coins
with
smaller
market
caps
[50-300m]
usually
experience
bigger
uctuations
than
coins
with
market
caps
over
~
1.5b.
However,
market
capitalization
is
not
a
precise
mesure
of
the
size
of
a
market.
If
I
have
in
my
possession
1
million
tokens
and
I
sell
1
for
300$,
it
would
theoretically
mean
that
my
tokens
have
a
total
MC
of
300
million.
But,
this
does
not
mean
that
for
every
"x
billion"
movements
in
the
MC
of
my
token,
"x
billion"
amount
of
dollars
have
to
ow
in,
or
out.
Ask
yourself
what
will
this
company
bring
thanks
to
the
innovative
technology
of
blockchain
that
a
traditional
company
can't.
What
problem
will
they
solve
thanks
to
a
blockchain?
Usually,
I
don't
recommend
investing
in
recent
ICOs
right
after
the
token
is
issued
to
the
public.
It
is
not
unseen
that
people
hurry
to
liquidate
their
positions
after
the
initial
oering
and
this
drives
the
price
down
for
some
time.
Later
in
this
book,
you
will
learn
the
dierent
factors
that
tend
to
inuence
prices.
Another
simple,
yet
useful,
trick
to
know
past
price
history.
Did
the
price
grow
3700%
in
the
past
ve
months?
Was
it
stable
for
three
months
but
good
news
was
released
yesterday,
and
the
price
increased
20%
in
one
day?
The
latter
is
considered
as
an
attractive
opportunity.
However,
be
sure
to
check
how
this
kind
of
news
usually
aects
the
coins
trajectory.
In
some
cases,
this
might
be
the
beginning
of
a
200-300%
growth
trend.
In
others,
it
might
just
fade
away
in
two
or
three
days.
A
perfect
example,
as
of
August
29th,
2017,
would
be
Monero.
Monero
is
a
token
with
a
lot
of
potential,
a
fascinating
and
very
implicated
team,
but
there
has
not
been
much
interest
in
the
coin
lately.
In
this
case,
virtually
every
positive
news
will
have
a
large
impact
on
the
price
of
the
currency,
as
we
have
witnessed
in
the
past
four
days.
To
resume
this
section,
you
should
always
pay
attention
to
fundamental
factors
such
as
the
uniqueness
of
the
idea,
team
leadership,
market
capitalization
and
upcoming
news.
Following
general
sentiment
on
/r/ethtrader
and
/r/cryptocurrency
is
sometimes
a
good
way
to
predict
future
price
movements.
However,
do
not
rely
on
this
method
as
lately
I
have
seen
many
fake
accounts
trying
to
manipulate
the
crowd,
and
the
quality
of
the
subreddit
is
on
a
downward
trend.
Which
Factors
Inuence
Price
Movements
?
In
this
section,
you
will
learn
what
aects
the
prices
of
cryptocurrencies
and
how
to
deal
with
it.
What
you
will
discover
here
is
not
time-proof;
eventually,
you
will
have
to
adapt
to
the
crypto-market.
However,
my
role
is
to
give
you
specic
examples
to
help
you
understand
what
forces
have
an
impact
on
a
cryptocurrency's
price.
News.
Obviously,
news
are
the
pulling
energy
of
an
assets
price.
Two
years
ago,
when
I
started
playing
around
with
cryptocurrency
almost
any
press
release
had
a
price
impact
on
Bitcoin
or
other
cryptos.
As
of
today,
this
has
changed.
Almost
every
day
now
we
witness
some
media
coverage.
However,
the
news
that
you
will
be
looking
for
are
the
ones
that
talk
specically
about
adoption,
alliances,
partnerships,
and
government
related.

Those
of
you
who
were
invested
in
Ether
earlier
this
year
will
remember
how
the
Enterprise
Ethereum
Alliance
drove
the
rst
big
price
wave
from
around
12$
to
42$
in
a
matter
of
days.
The
second
EEA
company
release
had
a
similar
eect
on
the
price.
However,
the
market
slowly
became
accustomed
to
this
type
of
news
(only
for
Ether)
release,
and
every
following
announcement
of
the
same
kind
had
a
diminishing
eect
on
the
price
of
Ether.
Alliances
and
partnerships
are
without
doubt
an
important
element
to
look
out
for
when
researching
cryptocurrencies.
While
this
type
of
news
might
have
a
diminishing
eect
on
the
price
of
Ether
(for
the
moment),
you
should
not
exclude
the
enormous
upside
potential
that
they
might
have
on
another
digital
currency.
Lately,
governments,
banks
and
big
industry
leaders
have
been
showing
a
growing
interest
in
blockchain
technologies
and
the
benets
that
they
might
help
incorporating.
Vitalik
Buterin,
chief
scientist
of
Ethereum
even
personally
met
with
president
Vladimir
Putin
to
discuss
the
future
of
decentralized
technologies
and
economies
on
a
national
level.
Considering
the
numerous
advantages
that
blockchain
can
bring
within
an
economy,
we
will,
without
doubt,
witness
the
incorporation
of
these
technologies
on
larger
national
levels
too.
Paying
attention
to
this
kind
of
news
will
most
probably
be
protable
in
the
future.
Technological
Updates.
Updates
often
introduce
signicant
upgrades
to
their
systems
and
in
retrospect
amplify
the
potential
applications
of
each
project.
If
you
are
tech
savvy,
you
are
probably
already
paying
attention
to
this.
However,
for
many,
this
is
something
hard
to
understand,
and
it's
okay!
Something
that
has
helped
me
a
lot
in
qualifying
projects
has
been
reading
and
learning
every
bit
of
information
on
system
upgrades,
technology
and
the
scientic
fundamentals
lying
behind
them.
Soon
enough,
you
will
be
able
to
realize
just
how
many
projects
have
aws
in
them
and
you
will
be
able
to
eliminate
them
from
your
list
quickly.
Exchange
Adoption.
Often,
newer
or
less
known
currencies
will
experience
a
price
spike
due
to
their
integration
on
exchanges.
This
theory
is
supported
by
the
fact
that
the
availability
of
the
coin
will
have
an
impact
on
the
volume
exchanged.
However,
be
aware
that
this
does
not
always
have
a
longstanding
impact
on
the
price
and
most
of
the
time
it's
a
"buy-the-rumor-sell-the-news"
type
of
event.
Block
Reward
Reduction.
Time
has
shown
that
block
reward
reduction
has
a
positive
eect
on
equilibrium
price
levels
(see:
Bitcoin,
Ether
[August
2017]).
This
principle
is
easily
provable
with
basic
economic
models
such
as
demand
and
supply.
Considering
a
stable
or
increasing
demand
for
cryptocurrency
and
diminishing
supply
tends
to
drive
equilibrium
price
levels
towards
higher
levels.
Note
that
events
with
similar
eects
will
have
the
same
repercussions
on
the
price
levels.
Ex:
Proof
of
Stake,
or
any
other
circumstance
that
would
act
as
an
incentive
for
people
to
hold
(or
hodl,
as
some
prefer!)
their
coins.
Competition
Has
a
similar
coin
adopted
a
new
technology
before
its
competitor?
This
will
leave
a
mark
on
the
price.
Litecoin,
which
is
no
more
than
a
faster
copy
of
Bitcoin,
witnessed
an
enormous
price
surge
due
to
their
faster
adoption
of
the
Segregated
Witness
update.
I
am
not
aware
of
any
other
two
coins
that
had
a
similar
eect,
but
I
assume
that
the
result
would
be
the
same.
u Also,
please
be
aware
that
low
volumes
driving
prices
up
or
down
tend
to
be
temporary.
Use
this
tip
to
your
discretion

Conclusion
Finally,
I
would
like
to
thank
those
who
have
read
until
the
end.
Your
interest
in
my
work
is
what
will
motivate
me
to
continue
writing
useful
content
for
the
community.
I
am
truly
passionate
about
this
new
technology,
and
I
am
willing
to
share
as
much
as
I
can
with
you,
fellow
enthusiasts.
If
however,
you
disagree
with
anything
that
has
been
said
here
or
would
like
to
specify
something,
please
feel
free
to
critique
and
contact
me.
I
will
listen
to
what
you
have
to
say
and
will
work
even
harder
to
provide
you
with
useful
content
to
help
you
benet
from
this
wild
ride.
To
the
MOON!
Artem
Bespalo

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