Avoiding Crypto Echo Chambers and DYOR
You’ve probably seen it already a hundred times at least: DYOR (Do your own research). But unfortunately this can be hard to do as often as soon as you start looking into a coin, surprise surprise, it’s great! Everything about this coin is amazing! Why is it so cheap? I need to go all in on it at once!
Really? Is it really that great? or have you fallen into an echo chamber?
If you’re unfamiliar, an echo chamber is basically when you end up surrounded by people that share the same opinion as you and therefor only end up reinforcing their already biased opinions. You, as a newcomer to the coin don’t have a pre-existing opinion on it and thus end up believing the hive mind. Then you buy, then the coin drops, but it’s just the market right? Then the coin drops again, but it’s just weak hands right? Then the coin drops again and suddenly people just aren’t posting as much about the coin and you get left holding bags (stuck with a bunch of crypto that you paid much more than it’s current value for).
How does this happen? Well typically one of the first things people do when they hear about a a coin spoken of positively (because why look into a coin that someone spoke negatively about, right?) they tend to do a couple of things that leads them into The Chamber (the positive echo chamber of the coin)
- They look at the coins website. Wow a website put together by professionals! It’s almost as if this company has millions of dollars to spend on advertising! While you should check the website to make sure it is up to date, these websites will only ever speak of the coin/company in a positive light. They completely control the information here and only want to put their best face forward.
- They check the coins subreddit. Better, however if the mods of the subreddit work for the company, once again, you are only receiving curated information. I know of several crypto subreddits that are completely worthless for information but would not appear so to a newcomer.
- They check the groups Telegram. In my experience Telegram groups are usually the absolute worst of the worst Chambers. I’ve probably joined dozens of groups and only a couple were moderated in a positive way. One of the worst straight banned anyone that even asked a question that could be perceived as negative or perhaps having an answer that would be negative about the coin. Most coins will also have an “unofficial” price chat telegram where I actually have gotten better info than the official Telegrams (between the “when moon” and GIF spam of course).
Well Jeez Louise, Saram! How can I get unbiased info?
Honestly it seems to always be “moon soon” or “shitcoin” when it comes to people’s online opinions so the best you can do is to find dissenting opinions as well as looking at all the positive opinions. I find that the best place to find dissenting opinions about a coin will be on Twitter. Simply look up the hashtag for the coin and read what people are tweeting about. Remember to also check https://coinmarketcap.com/ for hard numbers on a coin too. I often see people in low priced coins telegrams talking about all the money they’ll make when the coin hits 10$. Check CoinMarketCap, coin has 900,000,000,000 circulating supply. Yeah, 10$ will never ever happen. You should check the ATH(all time high) check when it happened and then think about if the coin has enough going for it to hit it again or surpass it.
Protip: Check what the price of Bitcoin was during the previous ATH, if it was drastically lower than it is now then it will probably be easier for the coin to reach the previous ATH levels depending on what’s going on with the coin and the market of course. Was the previous ATH three years ago when BTC was 10k? And the coin has a big event coming up (main net launch, etc)? Then it might be a good buy.
You can use https://coinmarketcal.com/ to find upcoming events for your coin.
In the end the best way to DYOR in my book is to avoid The Chamber as much as possible. If you’re feeling too good about a coin you should take a minute, and go out of your way to find those negative opinions then check the history of the coin. Don’t buy a coin based off its cool name or logo.