Issues to Consider on How to Pick a Winning ICO/
The cryptocurrency sector is a rapidly growing market with a very high potential but before you jump into this market with astonishing profits, it is very crucial for you to understand how to choose a good ICO to invest in. The success of any ICO coin is influenced by several aspects and in this chapter we will look at how you can choose a winning ICO.
At this point, it is worthwhile to mention stories of failed ICOs like the Mycelium ICO, whose developers disappeared after raising the money. It was afterward reported that they used the funds for their vacation. The increased lack of regulation of this sector may be the reason $7 million was hacked and stolen from the Coin Dash’s ICO. This happened just before the sale of the tokens began. The hacker broke into the system and the ICO wallet address was replaced with the hackers’ address.
Based on the above incidents, ICOs are a very risky way of fundraising and it is important for you to take precautions by never attempting to invest what you cannot afford to lose in case the project fails, because you will have difficulty in getting your money back. Before investing in a certain ICO, consider the following issues.
Issues to Consider
1. Consider the team behind the ICO project
When researching on the coin to invest in, always check everythingrelated to the development team plus the body that offers advice to the developers. Scrutinize the individual members of the team by considering their knowledge and experience in starting and running ICO-based projects and their overall experience in the cryptocurrency world. You can visit their LinkedIn profiles, Google the names of the individuals involved, and look for any famous names on the advisory board. Generally, check the ICO projects they have been involved in; you can research further and check how successful their earlier projects have been.
2. Carefully evaluate the white paper
Most investors never bother to read the white paper, even if it contains all the necessary information about the upcoming ICO project. As an investor, always make sure that you read the entire white paper and make sure that you identify the negative and positive aspects of the project and include this in your research. After reading the whole white paper, make sure you can explain what the project is bringing to the world and make sure you have a good grasp of what ICO you are investing in
3. What is the token needed for?
An ICO is essentially meant for the creation of a new token dedicated for a specific project. The most evident question here is what the token is meant for. Why aren’t Ethereum and Bitcoin sufficient enough to serve as the tokens of the project being undertaken? You must ask yourself such questions because some projects just make up a scummy story to back up their venture. However, remember that an ICO cannot be a perfect ICO if it has no dedicated token. These questions still must be asked about the usage of blockchain technology on that project.
4. Social media and online presence
As an investor, when you Google the name of the company, you should be able to find sufficient information regarding it. Check out the press releases of the company, their blog, and their social media activities. With the information from those sources, you will be able to gauge their trustworthiness and monitor their activities. Also, remember to check the opinions of your fellow investors on the platforms that have been dedicated to the cryptocurrency investors regarding the ICO project in question.
5. Is the ICO a hard cap or unlimited?
In past years, a hard cap and open ICOs did not have as muchimpact as today. An open cap gives investors the opportunity to send an unlimited amount of funds to the ICO project wallet. On this issue, many tend to forget that if many coins are circulating, the token becomes less unique and afterward there may be difficulty in trading the coin because the demand will be low. On the other hand, make sure that you are not the only person investing in a certain project because exchanges always have little interest with the projects that raise little because this makes it difficult for you to trade the tokens after they are released.
6. Check the quality of the codes
If you have basic programming skills, you can apply the knowledge here. The quality of the ICO project developer can be understood by just carrying out a simple analysis of the codes. As a non-techie in the programming world, you can simply evaluate the quality of the code by checking the consistency of the code.
ICOs are becoming a main stream fundraising method and, based on the many upcoming projects that are using ICOs. However, by following these key guidelines, you can easily pick out all the negative and positive aspects and be able to make a wise decision on which ICO project to invest in.