Differentiate between an ICO and a scam

[demsybtc]

ICO is the abbreviation of Initial Coin Offering. It means that someone offers investors some units of a new cryptocurrency or crypto-token in exchange against cryptocurrencies like Bitcoin or Ethereum. Since 2013 ICOs are often used to fund the development of new cryptocurrencies. The pre-created token can be easily sold and traded on all cryptocurrency exchanges if there is demand for them.

Advantages of ICO:
1. Non-lengthy listing process
2. Low listing cost and yearly maintenance
3. Access to global liquidity

Disadvantages of ICO:
1. No due diligence process
2. Lack of regulations

There are many good ICOs out there.
Its an excellent platform for those who are holding a million dollar idea to expand and execute with funds yet improving the economy with investors. However what its lacking is the due diligence we see in IPOs. New developed platforms definitely lures scammers into the game, but with caution/practice due diligence like finding out more about the whitepaper, development team, address of the company, analyzing the project will lower the risk of being victimized.

Tips to identify and analyse a good ICO:

1. Whitepaper
Read up the whitepaper, spot for any discrepancies or any thing that doesn't make sense. Identify the key idea of the project and analyse if the idea will work out or make any sense.

2. Founder Team
Do some research on the founder team members, spot if their names are short names like "Tony" compared to "Tony Jim Rodriguez". Many ICO scams out there uses very short names.

3. Contact and Address
Practice due diligence, research and look through the contact numbers and address of the project, check if they are using a legit one.

4. Read up forums
Usually scams might be identified by other victims, do a thorough research on the project you wish to participate. You might find some tell tail signs of a scam.

All in all, practice due diligence to avoid being the next victim.

[1715027588]

1715027588

[unionmare]

Thanks for the guide!

[gedor]

If some projects collect shit amount of million dollars, I think they are somehow scam or we can say that they are not doing good job. We will learn soon that money is not everything thanks to the these projects.

[brascopck]

please also add 1. everything with "e" like eETH, eBCH, eGOLD and anything is scam and only for quick cash.

[moala]

I think one important thing that very few check is "How are they going to make revenue?" . Because unless these companies start making profits they will run out of cash and go bankrupt. We also need to check what the tokens are actually used for? Do they have an important utility in the ecosystem? or these are just fund raising cash grab tokens?

[demsybtc]

i guess the need to have a figure to stand in as endorsement or guarantor, or any means to force them to practice due diligence might work out

[Vatimins]

ICO is the abbreviation of Initial Coin Offering. It means that someone offers investors some units of a new cryptocurrency or crypto-token in exchange against cryptocurrencies like Bitcoin or Ethereum. Since 2013 ICOs are often used to fund the development of new cryptocurrencies. The pre-created token can be easily sold and traded on all cryptocurrency exchanges if there is demand for them.

Advantages of ICO:
1. Non-lengthy listing process
2. Low listing cost and yearly maintenance
3. Access to global liquidity

Disadvantages of ICO:
1. No due diligence process
2. Lack of regulations

There are many good ICOs out there.
Its an excellent platform for those who are holding a million dollar idea to expand and execute with funds yet improving the economy with investors. However what its lacking is the due diligence we see in IPOs. New developed platforms definitely lures scammers into the game, but with caution/practice due diligence like finding out more about the whitepaper, development team, address of the company, analyzing the project will lower the risk of being victimized.

Tips to identify and analyse a good ICO:

1. Whitepaper
Read up the whitepaper, spot for any discrepancies or any thing that doesn't make sense. Identify the key idea of the project and analyse if the idea will work out or make any sense.

2. Founder Team
Do some research on the founder team members, spot if their names are short names like "Tony" compared to "Tony Jim Rodriguez". Many ICO scams out there uses very short names.

3. Contact and Address
Practice due diligence, research and look through the contact numbers and address of the project, check if they are using a legit one.

4. Read up forums
Usually scams might be identified by other victims, do a thorough research on the project you wish to participate. You might find some tell tail signs of a scam.

All in all, practice due diligence to avoid being the next victim.

Thanks for sharing this great information op. This will really help a lot of newbies here in this forum that wants to get their hands on different kinds of alternative coins. This will really help them from getting scammed.

But let me also share my way of determining scams or shitcoins. It is very easy. I just go and search about the devs and their team. To save some time because if the devs aren’t good, I don’t go and read the whitepaper and erase the ICO on my list. But if the devs are good, then I proceed reading more about the certain ICO. That is my way of filtering ICOs.

[Bes19]

Thank you for this information. I've been searching on some blogs and articles on how to distinguish a legit and scam ICO. What you've shared is almost the same on what i've read. Now, whenever i join an ICO i search on the dev team and make some research about them. I think that is the simplest way to know if an ICO is scam.

[Mostafiz]

thanks a lot man I'm really eagr to know about ICO

[jlp]

Tips to identify and analyse a good ICO:

1. Whitepaper
Read up the whitepaper, spot for any discrepancies or any thing that doesn't make sense. Identify the key idea of the project and analyse if the idea will work out or make any sense.

2. Founder Team
Do some research on the founder team members, spot if their names are short names like "Tony" compared to "Tony Jim Rodriguez". Many ICO scams out there uses very short names.

3. Contact and Address
Practice due diligence, research and look through the contact numbers and address of the project, check if they are using a legit one.

4. Read up forums
Usually scams might be identified by other victims, do a thorough research on the project you wish to participate. You might find some tell tail signs of a scam.

All in all, practice due diligence to avoid being the next victim.

All of your criteria have flaws.  They have all failed to determine if the project will turn out to be a scam or crap.

The most reliable criteria is whether the team has already built something that you can use today.

Read:

There are 3 Kinds of ICOs - Protect Yourself
https://bitcointalk.org/index.php?topic=2243157

[frowsiter]

Yes this always has been my own process of identifying the good ICO. Always keep watching for the whitepaper, roadmap, team members and more over I will check the marketing strategy and the investment they are doing from their own pockets. This ensures that they are very serious about the money and thus they actually care for it. So in general your theory is nice one. Thanks for sharing.

[Ayaancool]

There is lots of Ico coming up with scam intention only they make awesome website and good white paper finally they will show fake token sale record . Before investing in Ico check the team and concept of Ico and solution providing .

[Monnt]

Good one OP! This is very necessary for people who have not really been doing due diligence before and always end up just investing in a project because they like how it sounds. This lists are very paramount to look for in any ICO to enable one kick against any scam ICO. However, it will still end up to ICOs being regulated and I really do not fancy it as laziness of people to get it right apparently will lead to this. Everything still balls down on the team in question anyway, they are always my main target in any ICO.

[stripykitteh]

If some projects collect shit amount of million dollars, I think they are somehow scam or we can say that they are not doing good job. We will learn soon that money is not everything thanks to the these projects.

Most people that get that coin will dump it once it hits an exchange.
I wouldn't want to be the one spending Bitcoin to purchase it.

[FrankNoland]

ICO is the abbreviation of Initial Coin Offering. It means that someone offers investors some units of a new cryptocurrency or crypto-token in exchange against cryptocurrencies like Bitcoin or Ethereum. Since 2013 ICOs are often used to fund the development of new cryptocurrencies. The pre-created token can be easily sold and traded on all cryptocurrency exchanges if there is demand for them.

Advantages of ICO:
1. Non-lengthy listing process
2. Low listing cost and yearly maintenance
3. Access to global liquidity

Disadvantages of ICO:
1. No due diligence process
2. Lack of regulations

There are many good ICOs out there.
Its an excellent platform for those who are holding a million dollar idea to expand and execute with funds yet improving the economy with investors. However what its lacking is the due diligence we see in IPOs. New developed platforms definitely lures scammers into the game, but with caution/practice due diligence like finding out more about the whitepaper, development team, address of the company, analyzing the project will lower the risk of being victimized.

Tips to identify and analyse a good ICO:

1. Whitepaper
Read up the whitepaper, spot for any discrepancies or any thing that doesn't make sense. Identify the key idea of the project and analyse if the idea will work out or make any sense.

2. Founder Team
Do some research on the founder team members, spot if their names are short names like "Tony" compared to "Tony Jim Rodriguez". Many ICO scams out there uses very short names.

3. Contact and Address
Practice due diligence, research and look through the contact numbers and address of the project, check if they are using a legit one.

4. Read up forums
Usually scams might be identified by other victims, do a thorough research on the project you wish to participate. You might find some tell tail signs of a scam.

All in all, practice due diligence to avoid being the next victim.

The statement that you wrote is so useful, especially to investors who are fairly new into ICOs. I am glad that the short article advice investors on measures to take before actually investing in any ICO.

The problem that most investors have is lack of reading or researching, whenever a new project arise, they quickly jump in without even understanding the whitepaper, and this leads to most investors getting scammed. I am glad that you actually took your time to write this short article to inform new investors on measures they can take before participating in ICOs.

[zulfi125]

Good explained,everyone should aware from scam so that investment can be safe.

[PadenoM]

All ICO are not scam. some of them are scam, but it is mainly marketing
When you join a ICO first you need to study and have a look at the project whitepaper, roadmap, ERC20 token approval, project future planing, it's root or platform etc, check the comunity the design and the team
Then you will accept this project ICO or not

[ReLieD]

Well this has been a major problem. We are actually unable to find an ICO which is not a scam among hundreds of ICO's . So basically the owners of ICO has to choose a good manager to promote it and so that people believe in it and the owners find many investors.

[just a man]

ICO is the abbreviation of Initial Coin Offering. It means that someone offers investors some units of a new cryptocurrency or crypto-token in exchange against cryptocurrencies like Bitcoin or Ethereum. Since 2013 ICOs are often used to fund the development of new cryptocurrencies. The pre-created token can be easily sold and traded on all cryptocurrency exchanges if there is demand for them.

Advantages of ICO:
1. Non-lengthy listing process
2. Low listing cost and yearly maintenance
3. Access to global liquidity

Disadvantages of ICO:
1. No due diligence process
2. Lack of regulations

There are many good ICOs out there.
Its an excellent platform for those who are holding a million dollar idea to expand and execute with funds yet improving the economy with investors. However what its lacking is the due diligence we see in IPOs. New developed platforms definitely lures scammers into the game, but with caution/practice due diligence like finding out more about the whitepaper, development team, address of the company, analyzing the project will lower the risk of being victimized.

Tips to identify and analyse a good ICO:

1. Whitepaper
Read up the whitepaper, spot for any discrepancies or any thing that doesn't make sense. Identify the key idea of the project and analyse if the idea will work out or make any sense.

2. Founder Team
Do some research on the founder team members, spot if their names are short names like "Tony" compared to "Tony Jim Rodriguez". Many ICO scams out there uses very short names.

3. Contact and Address
Practice due diligence, research and look through the contact numbers and address of the project, check if they are using a legit one.

4. Read up forums
Usually scams might be identified by other victims, do a thorough research on the project you wish to participate. You might find some tell tail signs of a scam.

All in all, practice due diligence to avoid being the next victim.

Thanks for the article op!
I agree with you, most people don't like to read the Whitepaper because it's long. There's a bunch of information in the Whitepaper.

[TraderCal11]

Not all ICOs are scams, but there are a lot of scam ICOs.

You need to look at the team behind the operation, if they have a real world product, what the future plans are. Ask yourself are they solving a real world problem is is it another spin on a new decentralized currency which does absolutely nothing new. Don't rely on Google Adwords advertising.

Similar to the stock markets, there are scams but there's also many legitimate companies.