Dear All,
Interesting information on medium on a very relevant topic for today as how to spot a legitimate ICO from the overly crowed cryptocurrency market to invest in.
The world of cryptocurrencies has exploded like never before in 2017. The price of Bitcoin was shot up to over $17000 for the first time in its history. There has also been an increase in the number of initial coin offerings (ICOs). According to reports on CoinDesk, ICOs went from roughly $300 million raised in total since they began in 2014, to $2.7 billion raised as of October 2017.
ICOs are becoming extremely popular and trendy way of raising funds to support startup and realization of their business plan. I have seen some ICOs where developers create a fancy website and articulate their vision in the whitepaper and still they have been successful. I learned a word called “FOMO” i.e. fear of miss out that is doing the trick even to illegitimate projects and investors are getting scammed.
Are we so lazy to evaluate a project thoroughly or do we not care for our investment or could be so that we do not know how to really spot the right project from this overly crowed world of cryptocurrency?
I recommend investors to follow at-least three simple steps to validate an ICO:1. What Unique problem the project claims to solve? Although everyone say that they are solving a unique but you as an investor must check whether they are really doing so. It’s not difficult to determine the fact as you can easily identify whether their idea is unique or not by doing through their whitepaper and other information available on their website. After all its your money and you got to ensure you are doing the right thing by considering a particular ICO for investment.
2. Who are part of the team and must validate their credentials I personally have come across to some projects where they say due to security and safety of our team members, we are not revealing their identify. This is a big alarm. Stay away from such projects. How could you invest your hard earned money into some project where you do not know who the team is and what is their background.
Another scenario is where project has declared their team and probably put their linked in profile details. My suggestion is to contact at least 50% of the team members via whatever legitimate possible ways and validate their credentials.
3. Is the project having an existing business backing the ideaThis is very important aspect to consider. Traditionally we all are tuned to check this information when we invest in equities or debt funds. We validate what does the company do and how are they projected to grow. Essentially we should apply the thought process when it comes to investment irrespective of equities, debt or even crypto currency project.
These validation criteria are not exhaustive and do not guarantee the selection of right project in cryptocurrency market however, it will certainly help you to a certain degree.
Must readhttps://medium.com/@cryptobond007/how-to-spot-a-legitimate-ico-from-the-overly-crowed-cryptocurrency-market-to-invest-in-7ad3df2cb12e
