How to spot a good ICO
Most ICOs rely on Ethereum, and they are a practical mechanism. In the following article, we will talk more about How to spot a good ICO. But keep in mind that many of these projects are a basis for fraud. Today, there are other methods of offering less risky tokens. For more information, read IEO-related articles from this website.
A typical ICO project has a website and a white paper and has as much information as possible about the project and its goals. The website and white paper describe team members and their related experiences, ideas and roadmaps, approximate purposes and means of achieving them, and many more.
What the project does not have is a practical and final product. ICO is expressing an idea. The team describes its solution to reach that idea and asks people to send them money to finance it and share in the project’s profitability. You need to evaluate all aspects of a project and ultimately decide for yourself whether you are putting your money at risk and participating in that project or not.
Example of a successful ICO
It is good to remember that sometimes this risk works. That is why users are motivated to invest in these projects. So join us for more information on How to spot a good ICO. You may ask, are ICOs always doomed to failure? The answer is that most of the time, users are scammed. But there are also cases where token owners have made significant profits. EOS, for example, held an ICO and had no business products or even platforms. But in just five days, he was able to raise $ 185 million. Besides, trading in the token started at $ 0.925 and reached $ 5 a few days after the ICO.
Do I have to invest in an ICO?
Any digital currency guide will give you a simple tip to invest only enough to lose it. “Digital currencies are still a new and highly volatile asset class, and at any time their price could close to zero,” says Ethereum think tank and perhaps the most prominent person in the Cryptocurrency world, Vitalik Buterin. Do not waste more money than you can afford. If you want to know where to store your savings, I have to say that traditional assets are still the safest.
Of course, authentic digital currencies are also valuable assets today. Remember that experience has shown that with having some bitcoin, you will not regret the rampant price increase of these digital currency giants.
Find any information you can about the development team
First, make sure the developers are not anonymous. It is a dangerous sign if the developers are unknown. If there are names, search them carefully on Google and focus specifically on the development team and the advisory board. Many fake ICOs introduce several prominent people and claim that they work with them, one of whom is often Vitalik Buterin. Make sure that reputable websites always verify this information.
Make sure about the place where the team members studied and about their field. Also, research what team members have done before. Please focus on team members’ relevant experience, the ICOs they have previously participated in, and their impact. The important thing here is whether the team members’ previous experience is enough to succeed in this particular project? This is still the first part of the solutions we presented on How to spot a good ICO.
A satisfactory sign is when team members link to their GitHub, LinkedIn, or Twitter accounts on the ICO website. Even then, check how valid these accounts are. How long has it been since they were created? And how much activity has been seen from these accounts? Remember that forging social media accounts is not a difficult task.
Check out the community and media
Always make sure that an ICO community has a broad and, most importantly, public and open support community. A public slack or telegram in which a conversation takes place is usually a good sign for Crypto investors. Other sources, such as Facebook, Twitter, and Reddit, can be beneficial in evaluating an ICO.
Beware of so-called reward posts and topics. It is widespread for people to be asked to publish positive information about the project for certain rewards to attract both media and community attention to the project. Reward posts do not necessarily mean that an ICO is a scam. But a future project with experienced members in your team and having a good promotion campaign does not need to resort to such tactics. Stay with us in How to spot a good ICO ‘s article to get more information.
Read the project statements on BitcoinTalk
BitcoinTalk.org is the largest forum dedicated to Bitcoin and everything related to crypto. This page is beneficial for ICOs, and this is where project announcements are published. If you are planning to invest in an ICO and see that ICO is not available in this forum, drop it.
Be sure to read the ICO topics carefully in this forum, especially if you do not know to understand the technical aspects. These disciplines are a public effort to assess the legitimacy of an ICO.
In the digital currency community, and especially in this forum, user credibility is paramount. Each post contains the current rating of the user and the number of past messages. Usually, the higher the user rating, the more reliable it is. Those statements are also a great place to look at how active and responsive the project developers are. This can be a warning sign if they do not answer specific questions or are not engaged in the field. You can also send a personal message to the developers and check how responsive they are.
Read White Paper
This general guide can be summed up in a few words: Know exactly what you are investing in, and there is no better way to learn about a project than by reading the white paper. An ICO IEO rating and review is a public sale that involves attracting funds from informal investors. Therefore, developers must define project goals and the means to achieve these goals in simple terms.
A good white paper is also a draft of the legal framework between investors and developers. The most important thing is to include the terms and conditions for that ICO. Also, it should have a detailed explanation of the distribution of tokens, especially when and how to send tokens to Crypto investors. A promising sign is when the distribution of tokens is related to the roadmap because a certain amount of budget is required for each stage of the project. Perhaps one of the most important things about.
Check ICO IEO team and history
Another fundamental question that White Paper has to answer is why does that project need its token? Why not use strong and existing cryptocurrencies such as Bitcoin and Ethereum? The same question applies to the use of Chinese blockchain technology. As mentioned earlier, a legitimate project provides at least some kind of roadmap for potential investors. This can be a good sign if the roadmap includes a detailed review of how the money raised will be used. Lastly and perhaps most importantly, you need to make sure that the funds are stored in a third-party wallet. The best-case scenario here is that an individual or a company did not create this third-party service but instead was done using Ethereum smart contracts.
Learn from professional and cautious Crypto investors
Such investors make a living from investing. This makes them the most challenging participants. They carefully consider all aspects of the project with one thing in mind. What is extraordinary is how much profit this Best Cryptocurrency investment will lead to? Besides, the behavioral sciences are involved here. There is a general rule in the world of investing, and that is that it is never suitable for a startup to receive a lot of money quickly. Because they are convinced that funds should be spent just because they are available. Also, such Crypto investors have strict and apparent requirements regarding the return on money and profitability of their favorite project. They do not even think of investing in projects that do not meet such needs. Ensure professional Cryptocurrency investors are one step ahead of you in finding out how to spot a good ICO.
Even if you are an informal investor and do not intend to invest large sums of money, you can learn many lessons from the above Crypto investors. Be aware of what you are investing in and do your research. Be mindful of your risks and never participate in an ICO that does not meet your standards.
Code quality assessment
If a project has or does not have a pre-ICO working code but is not open source, this could be a prominent warning sign. Suppose your university field is related to computers and you have a little programming experience and know-how to read code. In that case, you should use your skills in evaluating an ICO. Only by analyzing the project code can a great understanding of the project and its developers achieve.
Legal cases related to ICOs
Before considering joining an ICO, make sure that the ICO does not violate the law. ICOs explicitly ban in some jurisdictions, such as China and South Korea. And while ICOs allow in many countries and have not yet been legislated. But most local lawmakers are currently developing laws that provide a framework for ICOs and impose certain restrictions on startups and Crypto investors. To make sure that this project is worth the investment, you must see that this project is not legally problematic.