If you are planning to invest somewhere, ICO is probably one of the best options right now. The ICO industry is on the verge of becoming the top investment hub around the world. It is being used by almost every kind of startup and agencies now. So, you are on the right path.
But how do you choose an ICO to make your next investment? ICO, as you may already know, is a money-pit full of risks, and the biggest risk with a token sale is to invest in a wrong ICO.
What Makes an ICO Wrong or Bad?
In the simplest terms, an ICO that is not genuine and only wants your money while not giving anything in return is a bad ICO. If you are wondering why someone will run such kind of sale, the answer is simple: they want your money. Starting an ICO is not at all a big deal, it only requires a website, a whitepaper and an ERC20 wallet address. This is why the number of scam ICOs is increasing each day. So, what’s the solution?
The only solution to this problem is taking time to research and evaluate an ICO before you decide to invest in it.
How to Evaluate an ICO?
You cannot expect an ICO team or company to tell you straight away that they are not genuine. This is something you’ll have to find out on your own. Almost every single blockchain project claims to have huge growth potential and promises significant returns for its investors. But the value of ICOs lies in the fact that even the blockchain, the underlying technology for ICOs, is still in the experimental stage. So, no one can actually guarantee whether a blockchain project or app will succeed or not. The best you can do is try to figure out the ICOs that have the best potential to grow in the future. Here’s how to do it.
Check out the project whitepaper: A typical blockchain project will necessarily have a whitepaper, explaining the various details of the project. Read this whitepaper carefully to evaluate things:
- Is there a real team with real people in it?
- Do you explain the project idea in good detail?
- Do you have an unfinished or finished product?
- What is the purpose of the project? Does it solve a real (in-demand) problem?
- Does it have actual use of blockchain technology? If yes, how?
- How will the ICO work?
- How do you expect to benefit from it?
See if the whitepaper answers all these questions. If not, feel free to ask these questions to the project team by reaching them directly.
If you still like the ICO after finding answers to all the above questions, it might actually be genuine and the right place for your investment. One more thing, if you’ve decided to invest in an ICO, just be sure to invest at the very initial stage to enjoy the maximum benefits.