There are Basically Four Categories of Cryptocurrencies and Blockchains that you should keep in mind before investing:

Bitcoin Alternatives: these are pure currencies, their goal is to solve bitcoins scalability and environmental challenges before the bitcoin community does. The benefit is they can try out new hashing algorithms, encryption types, block sizes etc. without having to have the entire bitcoin community take the risk with bitcoin proper. These to me are risky as an investment because successful alternatives will likely have their features adopted into bitcoin or in a bitcoin fork so there’s an incentive to just hoard bitcoin till a fork with all the best features airdrops you your winnings. Sidechain Platforms: basically these are blockchains of blockchains like Ethereum, NXT, Waves, ARDR, Bitshares etc. that are trying to create the best platform for creating, distributing and trading custom token assets for capital raising, in-game currencies, gift cards, smart contracts, etc. I think these are my favorite investments because the success of tokens made on these platforms create demand for the platform and the platforms internal currency (Ethereum/Waves) and a few successful tokens can create a home for the platform for time to come. RSK and Omni are platforms built on top of existing blockchains. Privacy Coins: These are coins who are mainly trying to figure the best method of privacy while at the same time be convenient and scalable. There is a demand specifically for anonymity in the black market and from privacy hawks that I put these in whole separate category because I expect the dominant currency coins will be lot less private than these particular consumers will want. ICOS/Token Products: Non-currency tokens meant to act as symbol of an investment or for redemption for a particular good or service. These are the riskiest as they are built for niche applications and lot of them are scams. This is where Steemit, Dtube, Sola, etc fall into unfortunately. Recommend you read the associated white papers and know the product.

Generally if I can’t fit a token into one of these categories I don’t think twice about investing in it.

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