The ICOs (Initial Coin Offering) have become fashionable investments in recent months, as many startups seek capital through the issuance of cryptomonniques, rather than resorting to the capital market.
In this post we will discuss what aspects should be taken into account to make sure that it is a serious company, and not a scam.
In the last 2 months, new ICOs have emerged daily, some with very promising projects, and others that directly make no sense.
The first thing to consider before investing in an ICO is what your project is all about. To do this you should read carefully his Whitepaper, which in 99% of cases is in English.
- A Whitepaper is a summary document that allows you to understand what a specific topic is about, in this case the ICO.
Whitepapers are usually downloaded in PDF format, if you don't understand English well you can easily translate it with Google.
The most important aspects of a Whitepaper can be summarized in 3:
- Understand what the project is about. This is the most important point, knowing where we are going to invest our money.
- Benefit of buying the Token early. Usually the new Startups give you some sort of bonus for buying your currency before it comes on the market.
- Names of the people who make up the project. You can google them to verify that they are real, participation in media, etc.
The points mentioned above are the least you should consider before investing in an ICO. Then, the results will depend on the success of the Startup.
Another aspect that you should not neglect when analyzing an ICO is the total emission of Tokens. The more currency a company issues, the lower its future value.
How to detect if it is a ponzi scheme?
While many Startups are legitimately funded, some scammers take advantage of the system to mount ponzis for the sole purpose of scamming.
Here are some tips to alert us to a possible scam:
- Your project has nothing to offer.
- The system is based only on finding affiliates who recruit people.
- They offer profits in a secure manner. If this is the case, it directly runs away from that ICO, since every investment is risky, without exception.
Finally, don't put all your money in one ICO, because even if the project is solid and promising, it may not end up being successful. You should at least diversify between 3 to 5 ICOs.