Cryptocurrencies in general, and ICOs in particular have been receiving a lot of coverage in the press lately. That ICOs can be an effective way for companies to raise capital is not in question. As of March 2018, btxchange.io reports that a total of over $4 billion had been raised globally through ICOs.
ICOs are definitely worth paying attention to. If you have a look at the infographic provided below, you will find a lot more interesting facts about them.
This post is about smart investing in ICOs. Therefore, we will go through each of the questions you need to ask yourself before parting with a single cent.
What Is The Hype?
Who is getting excited about the project? You should be an active member of an online crypto community so that you know what projects everyone is talking about. Is the community in general showing interest or is there very little talk about it?
While a lot of hype is not a guarantee of success, it does give you an idea of whether or not the project’s goals are achievable.
Are The Goals Achievable?
There are plenty of good ideas out there. Not all of them will come to fruition, though. Ask yourself, given our current level of tech, are the goals stated by the ICO achievable? For example, it would be useful to have a single currency that could be used worldwide, but is that an achievable aim?
Bitcoin has shown it is not – the currency has been banned in several countries already. Ask yourself, is the world ready for the solution being offered?
Who Are The Developers?
No matter how good the idea is, you need the right development team to ensure that it is successful. Does the team have the technical expertise needed to meet the goals laid out? How will they bring the idea to market and turn it into a successful business?
You should also check that the developers are who they claim to be. Can you confirm their industry expertise and involvement in the project independently through published papers or a site like LinkedIn? What some scammers do is to assemble a “dream team” to attract investors.
They might fabricate qualifications. They have even been known to falsify relationships with industry experts to make their projects seem more legitimate. Check what experience the team has and whether or not they have spoken about the project in other forums.
How Clear Have They Been?
Scammers will often try to dazzle and confuse you with unclear descriptions or the use of a lot of industry jargon. But even in legitimate projects, clarity of purpose is extremely important. The team must know exactly what it wants to achieve and must have some idea of the route it will take.
A lack of clarity can indicate a lack of focus and this does not bode well for the project. How much time will be wasted as a result?
Investing smartly in ICOs means asking the right questions and being willing to walk away if the answers are not forthcoming. Research is your best tactic when it comes to making the right investment.
The following infographic from URL: https://btxchange.io/ico-