Bitcoin Forum

Before you invest in an ICO, here are just some thoughts what might help you! ;)

First of all, what is the difference between an Initial Coin Offering (ICO) and a tokensale?
A tokensale uses an existing Blockchain (mostly the Ethereum network) to create tokens via smart contract. The total amount is limited to the tokensale and the number of tokens can’t be increased afterwards. An ICO is more of a general term for the event of a coin- or tokensale and can refer to just the first units sold while further can be mined afterwards.

If you are interested in an investment by participating in an ICO, there are currently many options to choose from. However, there are a lot of scams out there and very little coins actually experience a rise in value after the auction is over. Here are some tips on how to spot a well thought-out offering:

First you should ask yourself these question about the project:

Does it really aim to solve an existing problem?

• Are there other projects working on the same problem? If yes, does this one have the best perspective?
• In what timeframe do you respect a ROI given the roadmap of the project?
• Do the founders and the team have a solid background?
• Is there an active and serious discussion going on in the community? Not just advertisement all over by a few members.
• Does the website offer a whitepaper? It should. And you should probably read it before investing. :)
• Is there a return for your investment promised? Definitely a red light – no one can and should make such promises.
• Does anything else about the project sound fishy? Even if it’s just a small detail, it’s well worth some more research.

And then about the setup of the sale itself:

• Is there a presale for large investors? If yes, how many percent of total tokens are offered? If a small number of people own a large number of coins from the very beginning, they are able to strongly manipulate the market after the sale ended. A wide distribution of coins is most likely a good sign.
• Are bounties offered (e.g. for advertising, translations,…). Bounties are very likely to get dumped once a coin hits the exchanges, which might lower the price. So bounties should only be a really small part of total units.
• Are there bonuses for people that invest early (like a +25% extra tokens)? Most likely people who have this bonus will dump their coins fast if it hits exchanges at ICO price. Instant +25% return? I’ll take it.
• Does the project team keep a part of the coins for themselves? On the one hand, this is good, because they themselves will be motivated to increase the value. On the other hand, if the amount is too big, again, they are able to manipulate the market easily.

Of course, there a more things to watch out for, but these are some general things you should consider when looking for a promising project to invest in. Keep in mind that, as it is common in investing and happened as well during times like the dot-com bubble, a large percentage of ICOs will fail.

A good website with nice articles to topics like this, you can find on www.blockpit.io

This is a great post, I think a few other things that make a company look credible are these:
1. When they have a blog that has weekly updates on what the team is doing or how the ICO is doing, full transparency for their token holders or potential investors
2. When you can see them actively answering questions on websites that you can make comments on
3. Something mentioned in their white paper or their website that says whether they are a utility or security token, and if security, how they will handle SEC regulations

ouch,
I think it is great to help myself if someday I want to join an ico, thank you and good luck for everything.

Indeed!
This is great and wonderful as I've been starting my journey investing in cryptocurrency. I find this thread really helpful and I start to gain some confidence in investing too. Because before we start we should always consider the vision and mission of the project and if they are doing something to make it happen.

These guidelines have helped me to explore the good ICO. I also looked at ICO's advisors or partnerships. When advisors are known, trusted and well experienced that will add and strengthen points to believe.

The people that do the steps in that guideline could do okay in the ICO. Sometimes the ICO can cancel for no reason even if the project is 100% real.

I think people need to go into ICO's with the same attitude as they do with anything in life. There are dodgy people who are looking to prey on people and take their money with any means, and currently ICO's are a good way for them. Don't just invest based on the idea, actually do some research.

Couldn't agree more. I think transparency and clear communication are very important. I thought Havven's ICO was the smoothest ICO I've ever been a part of. Payment network and stablecoin for everyday purchases. Great idea and team as well.

Guidelines like these are very important for a newbie ICO investor. Not only these market cycles and luck also plays a crucial role here. Nowadays many good ICOs are also listing below ICO price when it reaches exchanges but in the month of December even shit ICOs were listing multiple times above ICO price.

I have observed this scenario too which even those shit project/ICO turns out to pump when the month of December or last quarter of the year comes.For the guide which is written on OP, I do appreciate the effort which a really very helpful guideline for those newbies out there which don't really have too much idea when it comes to ICO engagement.This would really give you the basic ideas and this thing does deserve a merit. ;D

It's a great guideline OP! People should always have due diligence when it comes to investing not only in ICOs but in all investment opportunities may it be crytpo related or not. What we have to remember always is that there is always risk involved when we put our money in another's pocket to grow. No matter how good the team is and there is a big potential in its project, if they have the intention to scam its investors then they would do anything to make it look real and then run away afterwards. There are successful ICOs but the team is gone after the ICO period. We should just invest money that we think we can always get back even if it would be gone. We should always have a back up plan in case something undesirable happens.

I would avoid all ICOs.  The exchange price usually ends up cheaper than the ICO price, then you have the bounty hunters dumping their tokens crashing the price even further.

This is an excellent post, It discuss more of joining an ICO and it helps me so much. Thanks for the information, before i invest , I will think before joining ICO.

Good post for us, as guide this is very detail and give me enough information about ICO project. Last year I leave ICO project because my money stuck into several project and when I sell the coin, lost 25% from my money. Maybe this is time I should enter ICO project start with knowledge on your post. Can give up but must learn again, thank you very much.

This is a good post, but I still want to remind you that there is not a good time to invest in ICO, because the policy is not optimistic, so now should buy some high quality tokens or buy BTC.

Thanks ;) Investing in ICOs really needs a lot of time for research and still it's never guaranteed that you invested in a project what will bring the token to profit. I see this year as the year of ICOs. We will see a lot of really good projects! But still be careful and think twice, which ICOs are worth for an investment. I know I have a newbie acc. here, but I am working together with a great team with quite some knowledge, so if you have any questions related to ICOs, token economics or taxation, I am sure me or a colleague of mine have an answer for you ;)
And we wouldn't mind if you wanna visit our website (www.blockpit.io)  ;D

Best regards  

Pretty solid advice, a lot of people complain about scams but I think if you do your research, it's not that hard to find a good ICO.

Great guideline! But how about a working product? I'm sure that today it should be one of the most important questions to the projects that wants millions from the crowd. Do not you think so?