Let’s be real, not every open source crypto currency project is worth your time or money, right? Some are game-changers, while others? Well, they vanish overnight. So, how do you tell the difference?
In this very short guide, XAIGATE will break down 5 key factors to help you separate the promising projects from the risky ones.
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Is the code really open and transparent?
In previous XAIGATE articles on open source (such as Discovering Top 5 Secrets of Crypto Wallet Open Source), we have agreed that the whole point of open source cryptocurrencies is transparency. However, in reality, not every project that claims to be “open source” is actually that.
Let’s answer the following questions quickly to check before deciding:
- Is the source code publicly available on GitHub/GitLab? (By the way, XAIGATE is on GitHub! Follow us!)
- When was the last update? (If the repo hasn’t been touched in months, that’s a red flag!)
- Is there an active developer community contributing to the code?
For example, Bitcoin (BTC) and Ethereum (ETH) have thousands of contributors constantly refining their code. On the flip side, some so-called “open source” projects are just low-effort forks of existing blockchains with zero innovation.
Is the development team of this open source crypto currency credible?
While decentralization is a core principle of cryptocurrencies, projects with completely anonymous teams can be a big warning sign. Let’s imitate a recruiter evaluating candidates, XAIGATE suggests you evaluate through the following criteria:
- Are the founders and developers known to the public? Check LinkedIn, GitHub, or their previous projects.
- Do they have a track record in blockchain development? (Experience contributing to open source is a plus!)
- Has the project raised funds via an ICO/IDO?
For example, Ethereum was co-founded by Vitalik Buterin, a well-known figure in the cryptocurrency space. Similarly, Polkadot was created by Gavin Wood, the former CTO of Ethereum. Their expertise and transparency have helped build trust in these networks.
On the other hand, projects like Squid Game Token have attracted investors but lacked a verifiable team, leading to withdrawals that wiped out millions of dollars.
Can the ecosystem be applied in practice?
A good open source crypto currency needs a thriving ecosystem to demonstrate its real value. Here’s how you can judge that:
- Are there working DApps (decentralized applications) built on the network? A blockchain without real-world use cases is just an experiment.
- Is the token actually used for payments, trading, or staking? If a token has no purpose other than speculation, that’s a red flag.
- Does the project have strong partnerships with major platforms like Binance, Coinbase, or payment processors? Legitimate partnerships signal credibility.
We all knew Terra (LUNA) had a large ecosystem of starcoins and DeFi projects, but flawed tokenomics led to its collapse. Without a sustainable foundation, even a seemingly strong ecosystem can crumble.
So, what makes a strong ecosystem?
A strong open-source cryptocurrency needs to foster:
- Developer activity by regular GitHub contributions and updates.
- User adoption: Are businesses and users actually transacting with it?
- Security and stability: A blockchain network that frequently crashes or gets hacked is out of the question.
If your business is exploring cryptocurrency payments, partnering with an open-source cryptocurrency with a thriving ecosystem is crucial. For example, at XAIGATE, we don’t just follow trends, we focus on researching cryptocurrency payment solutions with trusted networks that have proven to have real-world applications.
Even though it is an open source crypto currency, not all coins are secure enough. You should check:
- Has the project ever been hacked? A strong crypto currency project will have a solid security track record. If a project has been hacked multiple times, run!
- How many nodes are involved in validating transactions? The more nodes, the more decentralized the network, which generally makes it harder for any single party to control the network.
- Has the project undergone any security audits? Independent audits from trusted firms like CertiK or Trail of Bits help ensure the code is secure and less prone to exploits.
Let’s look at two contrasting cases: Bitcoin has never been hacked, thanks to its network of over 10,000 nodes spread across the globe. This is the model of decentralization and security.
Meanwhile, the Ronin Network (used in Axie Infinity) was unfortunately hacked for $620 million in 2022. The hack happened because the network had too few validating nodes and lacked proper security protocols.
Therefore, XAIGATE only supports crypto projects with high-level security, ensuring that businesses can integrate crypto payments without worrying about breaches. Security is important, especially when dealing with sensitive financial transactions!
Liquidity and transaction speed
Solana (SOL) is known for its extremely fast transactions (up to 50,000 transactions per second), but has faced some network downtime in the past. As such, businesses should prioritize coins with high liquidity and fast transaction times. This ensures that businesses can process cryptocurrency payments without excessive delays or fees.
Here are a few things to look for:
- Is the coin listed on major exchanges like Binance, Kraken, or Coinbase?
- How fast are transactions, and are the fees reasonable? For example, Dogecoin has low transaction fees, but due to the concentration of large holders (whales), its value can be manipulated, creating large fluctuations.
- What is the daily trading volume? High volume means less chance of price manipulation.
XAIGATE – Best crypto payment gateway for your web store
Once you’ve chosen your coin, it’s time to choose your payment gateway! At XAIGATE, we completely get one thing: accepting open source crypto currency payments is a smart way to expand your market and attract new customers. That’s why we’ve developed a simple, secure, and efficient crypto gateway specifically designed for e-commerce sites.
With XAIGATE, you can seamlessly integrate payments in leading cryptocurrencies like Litecoin, Bitcoin, and many more. Our user-friendly APIs and plugins make it easy to integrate a payment gateway into your website without any hassle.
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