Nowadays Initial Coin Offerings(ICO) are popping up like daisies in the spring. This is due to a gold rush fever to get a piece of the next Bitcoin. While there are many legitimate ICOs out there with sound potential, there are equally as many that are a scam. Here are a couple of tips on how to find an ICO that is worth investing.
Do Your Research
While this might seem obvious, I will mention it none the less since obvious things tend to go over our heads. It is easy to listen to a couple of people in a Telegram crypto trollbox shilling for a particular cryptocurrency and take their word for it. What is not easy is doing your due diligence before putting money down for an ICO. This means researching as much as possible about the ICO in question and the state of the market.
Know the Team
An ICO is only as good as the team behind it. If you are considering on investing on a certain ICO, make sure to learn as much about its team as possible. Particular attention should be paid to the development team’s experience and involvement on the ICO. See what past projects they were participated in and how successful those ventures were. If the team has a good track record, odds are the coin they are developing will have one too.
Study the companies whitepaper with a fine tooth comb. It will give you insight on what, when, how the company plans to bring their coin into reality. Also, pay close attention to the roadmap. Not only will it let you know how far into the development phase the coin is, but it will also give you a glimpse at how consistent the company is with meeting its deadlines. If the company fails to meet deadlines multiple times it is usually a red flag.
Purpose of the Coin
There is an immense number of cryptocurrencies out there. Is the cryptocurrency a coin or a token? Is its primary purpose ensuring privacy or accountability? Knowing what the cryptocurrency is for will help you see if it will zero in on a niche market and thus increasing its demand.
See What the Community Thinks
This might counteract the former point where I mentioned not just to follow what people said. However, see how the crypto community feels about an ICO can give you some insight on facets of the ICO that are often overlooked. Keep in mind that you are not the only person investing in the ICO. The more people that are receptive towards it, the more likely it will increase in value once traded.
Always remember to invest responsibly. You should never invest money you can’t afford to lose. Do not take out a loan or use your kids’ college fund when you are thinking about to invest. While your hopes might be to triple your money in a few months, you might end up explaining to your spouse why your kids are going to be able to enroll in college this year instead.