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Investing in ICOs or fully functional fresh currencies can be very profitable due to the fact that one is able to get in asset quick and often ahead of other market participants. However picking bad coin can easily lead to complete loss of investment if something goes wrong on development or coin has no long term use and the market looses faith and trust in currency which leads to collapse of value.

Here is quick checklist that i go trough always before investing in coin:
1. Check the crypto currencies forum page on bitcointalk forums. Checking for several different things from lower part of checklist.

2. Flashy images and good page setup. Solid structured page is what i look for, anything that is scraped up quickly without images or videos often means that developers put little effort into marketing of coin, which is not a good sign to see for investing. Remember you are not in it alone, you want other market participants to get in too if you want to sell coin for profit.
Generally people think completly wrong on this one, thinking that flashy images mean developers are just looking for profits and coin is more likely a scam, while the reality is if you do deep statistical checking and pattern checking of the coins, it is exactly the opposite. The more work developers put into the coin the better, there can be exceptions but in the end its overall statistical performance that matters not single picked example.

3.Transparent team. Images and names of all developers on project, coins developed and released by hidden developers are way more likely to be scam or eventually loosing overall value. This is a fact. Its logical, if someone has ill intent its more likely that staying in shadows will guarantee better safety or perception of it. A good sign is team with experianced members who produced previously successful projects.
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4 Long term use. Coin, token, system no matter what the ICO or release is it needs to have long term useful value. Just releasing currency for the sake of it doesnt cut it. Whatever the asset is, it has to provide some real use in order for market to see long term value in it. This means when one sees coin always make sure to think ahead how could such asset provide value to certain people, organizations, companies etc...
For example it could provide platform for developers to develop other blockchain softwares on top of it, which gives it intrensic value of whole ecosystem build on top of it, it could provide capital flight in reppresed countries such as privacy coins allow, it could be distributed power sharing and use such as certain coins that distribute computer power might allow in future, it needs to give value to certain market.

5.Mining should be low on list of forum page. When you see coin page that has mining explained and front pushed right bellow the tittle or near it, its usually red flag. It means that developers did not develop any other significant feature to represent it in coins description that could drag in the investors. Mining is only process that helps functionality of currency, it is not the actual use of currency and its only sole feature.

6.Market capitalization. Very important and often overlooked. When investing in any asset it is important to recognize what current market capitalization of it is, if you are value investing and looking for asset that will produce long term increase of use for certain market, it needs to be as under priced and under capitalized as possible, this means that you as investor are entering at best possible price. If market capitalization is way above the actual real use of market it very often leads to strong price drop in order for price to stabilize around intrensic value.