Whether you’re of the firm conviction that Bitcoin is on the heels of collapse and seeking refuge for your funds, or simply looking to diversify your portfolio, investing in “lower-tier” cryptocurrencies can prove to be a very profitable and wise venture.

With industry mainstays enjoying massive gains as of late, notably Litecoin (LTC) quadrupling in size last week and Ripple (XRP) inching towards that $1 mark, it’s clear where the short-term profits lie. But forward-thinking investors are already looking at the future prospects of the young cryptocurrency market, searching for the next class of tokens that will mature in 2018 and beyond at the exorbitant rates that we’ve become accustomed to in the cryptocurrency world.

The industry has been booming in unprecedented fashion. In the past year alone, the total market cap valuation has grown 40x in size, soaring from just under $15 billion last December to more than $630 billion at the time of this writing. That number continues to get larger week over week, demonstrating the steady influx of interest and financial backing the industry is receiving, and shining light on where it will continue to go. At this point, it’s safe to say that a $1 trillion market cap is inevitable and staring us right in the face.

Consider this: Coinbase, at the center of all the madness, was adding something to the tune of 100,000 new customers per day before adding Bitcoin Cash (BCH) to its platform, which has now created even more buzz than anyone imagined possible. The San Francisco based unicorn is also reportedly bringing in hundreds of new employees to try and contain all newfound demand.

But while Coinbase only exchanges 4 cryptocurrencies, albeit arguably 4 of the most important at the moment, those new to the cryptocurrency community are quickly learning just how many options they have in front of them. To better quantify, there are currently north of 1,350 digital assets and currencies listed on coinmarketcap.com. An important lesson that a cryptocurrency novice will learn with time, however, is that all Bitcoin (BTC), Bitcoin Cash, Ether (ETH), and Litecoin came from much humbler beginnings than their current prices convey. With that in mind, the search to discover the next tokens to boom is on.

But with so many options, the question becomes obvious: how can you differentiate a good prospect from a bad one? When looking to invest in a new coin, especially a lesser-known one that you won’t hear about on the news or even amongst your social networks, it’s critical to have a set methodology to weed out poor prospects before they result in regrettable decisions.

Lower-tier cryptocurrencies that currently have a market cap between $100 million and $500 million are a good place to start looking, as you can often get large quantities at an undervalued price with tons of room to grow. While those figures initially may seem colossal (frankly they are), for comparison sake, Bitcoin’s market cap is $292 billion and Ethereum’s is nearly $80 billion.

I had the good fortune of attending a recent speech given by David Friedman, Principal for seed stage investment fund Yang Ventures based out of New York. An expert in ICO, fintech, blockchain technology, and the cryptocurrency world at large, Mr. Friedman outlined a masterful 4-step approach to evaluating any new coin of interest. And while nothing is ever guaranteed, following this procedure is sure to get you closer to the coins you’re looking for.

1. Read the white paper

The first step in evaluating a project is reading the white paper and seeing if you can understand it. Understandability of the document renders the coin a potentially good investment and worth further investigation. However, if it's too esoteric, academic, mathematical, or reliant on obscure cryptographic proposals, unless you have a Ph.D. in the relevant subject area, stay away. If the project’s team can’t communicate to a mass audience what problem it’s solving, what the token is used for, a business model, and a roadmap for the future, it’s a major red flag.

Take, for example, Civic (CVC). Aiming to enhance affordability and security for identity verification needs, Civic’s white paper reads, “Civic is building an ecosystem that is designed to facilitate on-demand, secure and low-cost access to identity verification ("IDV”) services via the blockchain, such that background and personal information checks will no longer need to be undertaken from the ground up every time.” Clear and practical.

Golem (GNT), dubbed the Airbnb for sharing computing power, and FunFair (FUN), a technology that eliminates cheating in casinos and multiplayer gaming, are likewise well-communicated projects, and have thus earned the interest of more attention.

But remember, cryptocurrency is advanced and often complex, and there’s certainly no merit in tricking yourself into thinking you comprehend something that you actually don’t. Friedman said it best: “A healthy dose of intellectual humility is vitally important in cryptocurrency.”

2. Look into the project’s team

So, you’ve found a project you like, whose white paper clearly delineates an existing problem and how the coin provides a feasible solution to it. The next step is to read up on the team behind the project. Reputable names and legitimate experience are good indicators of what kind of manpower is driving the project. You should look out for individuals with significant cryptography experience, a technical lead, proven business-savvy professionals, and ideally a strong board of advisors.

Here’s a good example: Basic Attention Token (BAT) is spearheaded by Brendan Eich, creator of JavaScript and co-founder of the Mozilla Project. These credentials seemingly make him a trustworthy candidate to deliver on the new attention-economy and web browser he’s currently building.

OmiseGo, a disruptive financial technology for use in mainstream digital wallets, has an advisory board that includes Ethereum Founder Vitalik Buterin and Prof. David Lee Kuo Chuen, Professor of Quantitative Finance at Singapore University of Social Sciences.

It’s simple, really. When reviewing the project's team members, ask yourself if you trust your investment in their hands. Judiciously approaching this question should yield you positive outcomes.

3. Check if the project is open source

If it’s a closed source project, move on. The cryptocurrency world is by nature open source, so take the time to go to the project's Github account, and see if the development team has been updating and adding code over time. If you’re not well versed in coding, ask a friend who is to take a brief look. You might stumble upon the fact that they abandoned the project.

4. Reach out to experts

Once you’ve passed through these filters, it’s time to start talking to hard-core, experienced, cryptography-fluent individuals who really follow this stuff in meticulous detail. Platforms such as Bitcointalk.org and CoinFund Slack are two such destinations for people to ask others what they think of a given project. People will usually respect the fact that you did your own research, and eventually, someone will agree to chat with you with real industry-leading insight. As corny as it might sound, act like a private investigator. Because if you want to discover that next big cryptocurrency, you’re going to have to.

Once you’ve taken these measures, you can make far more educated bets on future coins that you can likely haul in at great prices now. Doing intensive research and earnest due diligence is really the answer to finding the next class of cryptocurrencies to boom in 2018 and beyond. By employing the 4-step methodology laid out here, you’re on the right path to finding your gold.