[Guide] How to identify red flags of an ICO/Altcoin

[AverageGlabella]

Ok so I've seen this question get asked a huge amount of times around the internet including this forum and Reddit. So let's have a look at the reasons why you shouldn't invest in a Alt coin/ICO.

1. Paid bumping:
We've all seen it right? Paid bumping is current rife over at the announcement sub forums. You'll typically find newbie accounts giving overwhelmingly positive compliments to the project or you'll find higher ranked members engaging in positive discussion about the ICO.

I'm not saying that all positive discussion is paid bumping but that's why I'll list some examples of paid bumping:

- "Great project"
- "To the moon"
- "Buy buy buy"
"This project is a good investment"
- Asking a question which is already in the OP or been asked before
- Best of luck team

Or some variation of the above. When looking at a project look at all the replies or at least skim over them. This will give you a good idea of whether new comments are copying and pasting previous replies and how many users are posting the same garbage over and over. THIS IS PAID BUMPING.

You might say that this is a good technique to get your ICO advertised and stay relevant and is good for prices. Well there's better ways to do this for example through signature space or buying forum ad space. If the developers or project manager of an ICO isn't prepared to advertise without breaking the rules of the forum it's got it's main thread on then this project isn't going to last.  They aren't prepared to do things professionally and advertise like all the other legitimate ICO out there. 

2. No Whitepaper or Road map

If a project doesn't outline it's goals and what their project is about then they haven't put much effort into it and it's likely a scam or a quick money maker for the developers. A good quality whitepaper should include: It's goal, the team behind it, it's features and a road map to outline it's vision.

3 Premine

If a project has been premined it's normally a sign of the developers wanting to make a quick buck by getting a high price and then quickly dumping all of their coins. This isn't always the case but the majority of the times it is.


4. Do the developers/project manager engage with the it's community?

If the developers aren't actively answering questions about their business or helping those who have worthy questions then it's likely that they don't care about the project. Any professional company will engage with it's customers/consumers professionally and within due time. Take a look at developers post history to determine this.

5. Is the project unique or just a carbon copy of another?

If the project is unique or filling a niche then it's much more likely to have success over it's competitors. Every project should have included it's features in it's whitepaper. Research these features in depth. If they aren't offering something new to the market over their competitors then it will likely fail. A lot of coins are now being released which are word for word the exact same code of other projects. The only thing that is different is that they have changed the name and maybe the total supply etc.

6. Research the team

I can't emphasize this enough. You are ultimately investing in these people and the majority of the time these team members which are dressed up and look professional in their whitepapers don't have any experienced and are simply coders. If you can't find any information on any of the team members then they are likely here to make a quick buck or the project will fail because of their lack of experience. The best team members are the ones who have already been involved in some capacity with cryptocurrencies and a good whitepaper will list sources of their teams achievements.

[Edward Finney]

I think the token economies also. What % of the coins have been issued during the ico? If its a tiny amount the value will keep depreciating every time they introduce more coins into the market

[pranazzs]

What about ICOs that get Rating 4 and above on Rating websites like icobench, icodrops?
Looks like we can make a reference, if ICO is good or not!

[AverageGlabella]

What about ICOs that get Rating 4 and above on Rating websites like icobench, icodrops?
Looks like we can make a reference, if ICO is good or not!

The thing is about these sites they normally offer advertising and are probably up for manipulation. Plus the ratings are subjective. These aren't rules to find the best most profitable coins but a guideline to good quality projects. If you believe in the project then these are the things you need to look out for.

Rating sites are also run by unknown users which mean they could be directly involved or invested in the project which means they would be willing to give it a better rating to get more people involved.

[pranazzs]

What about ICOs that get Rating 4 and above on Rating websites like icobench, icodrops?
Looks like we can make a reference, if ICO is good or not!

The thing is about these sites they normally offer advertising and are probably up for manipulation. Plus the ratings are subjective. These aren't rules to find the best most profitable coins but a guideline to good quality projects. If you believe in the project then these are the things you need to look out for.

Rating sites are also run by unknown users which mean they could be directly involved or invested in the project which means they would be willing to give it a better rating to get more people involved.

so so, we must be careful in choosing ICO.
and I just found out that from web rating can not determine ICO is good or not!
sorry, my language is not good.
thanks,

[Insanerman]

What about ICOs that get Rating 4 and above on Rating websites like icobench, icodrops?
Looks like we can make a reference, if ICO is good or not!

This is also a good strategy in identifying ICO's out there.
Adding to your informartion above. You can also check
Cryptocreed.com
Bountyhive.io
Bountyplatform.io
To make sure that the ico in bitcointalk is partially legit.

But this is not recomended , try to examine by yourself if it has a good use for the realworld

[Stulovo]

There are such products, which have high marks, but having read the white paper you understand that there is written just nonsense.

[oscarrsm]

You have made a great description. It certainly will not protect against professional scammers, however, from some amount of useless investment will save. Professional thieves know how to weave such a web that even when everyone already understands that a project is an empty place, many do not believe their eyes and are waiting for a positive outcome. The situation, in my opinion, is becoming more serious every day.

[rahutomo]

What about the company address.
whether this includes the criteria in it.
Sometimes, I've also seen, where there is no information whatsoever about the company address.
it really feels great if they tether an address.

[chrisfatos]

Thanks for sharing this information. I think this is also useful to look at when deciding to join a bounty

[AverageGlabella]

What about the company address.
whether this includes the criteria in it.
Sometimes, I've also seen, where there is no information whatsoever about the company address.
it really feels great if they tether an address.

Yeah I guess this fits in with the research suggestion. You should research the project and it's team in depth. Including whether they are a register business and if they have a telephone which you can contact them on etc.

[piratek]

IT's a masternode coin

[chaoscoinz]

Ok so I've seen this question get asked a huge amount of times around the internet including this forum and Reddit. So let's have a look at the reasons why you shouldn't invest in a Alt coin/ICO.

1. Paid bumping:
We've all seen it right? Paid bumping is current rife over at the announcement sub forums. You'll typically find newbie accounts giving overwhelmingly positive compliments to the project or you'll find higher ranked members engaging in positive discussion about the ICO.

I'm not saying that all positive discussion is paid bumping but that's why I'll list some examples of paid bumping:

- "Great project"
- "To the moon"
- "Buy buy buy"
"This project is a good investment"
- Asking a question which is already in the OP or been asked before
- Best of luck team

Or some variation of the above. When looking at a project look at all the replies or at least skim over them. This will give you a good idea of whether new comments are copying and pasting previous replies and how many users are posting the same garbage over and over. THIS IS PAID BUMPING.

You might say that this is a good technique to get your ICO advertised and stay relevant and is good for prices. Well there's better ways to do this for example through signature space or buying forum ad space. If the developers or project manager of an ICO isn't prepared to advertise without breaking the rules of the forum it's got it's main thread on then this project isn't going to last.  They aren't prepared to do things professionally and advertise like all the other legitimate ICO out there. 

2. No Whitepaper or Road map

If a project doesn't outline it's goals and what their project is about then they haven't put much effort into it and it's likely a scam or a quick money maker for the developers. A good quality whitepaper should include: It's goal, the team behind it, it's features and a road map to outline it's vision.

3 Premine

If a project has been premined it's normally a sign of the developers wanting to make a quick buck by getting a high price and then quickly dumping all of their coins. This isn't always the case but the majority of the times it is.


4. Do the developers/project manager engage with the it's community?

If the developers aren't actively answering questions about their business or helping those who have worthy questions then it's likely that they don't care about the project. Any professional company will engage with it's customers/consumers professionally and within due time. Take a look at developers post history to determine this.

5. Is the project unique or just a carbon copy of another?

If the project is unique or filling a niche then it's much more likely to have success over it's competitors. Every project should have included it's features in it's whitepaper. Research these features in depth. If they aren't offering something new to the market over their competitors then it will likely fail. A lot of coins are now being released which are word for word the exact same code of other projects. The only thing that is different is that they have changed the name and maybe the total supply etc.

6. Research the team

I can't emphasize this enough. You are ultimately investing in these people and the majority of the time these team members which are dressed up and look professional in their whitepapers don't have any experienced and are simply coders. If you can't find any information on any of the team members then they are likely here to make a quick buck or the project will fail because of their lack of experience. The best team members are the ones who have already been involved in some capacity with cryptocurrencies and a good whitepaper will list sources of their teams achievements.

You raised some excellent points, all being the central key factors to consider when evaluating a potential investment.
I have realized that is is not up to the forum moderators to weed out every potential scam, being they're too numerous to keep up with. It is up to us, as a community to communicate with each other to provide the guidance from potential pitfalls we all face, from scams, and dishonest campaigns.

[AverageGlabella]

You raised some excellent points, all being the central key factors to consider when evaluating a potential investment.
I have realized that is is not up to the forum moderators to weed out every potential scam, being they're too numerous to keep up with. It is up to us, as a community to communicate with each other to provide the guidance from potential pitfalls we all face, from scams, and dishonest campaigns.

Ultimately we should be held responsible for our own investments and this means that we should be the ones conducting the research ourselves and not relying on reviewing sites or anything else. There's far to many scam projects about these days to ignore this simple fact that we have to do our own research. It's always good asking people for a second opinion but just remember that the person you are asking has bias and will likely suggest something that they are already invested in because more people = better chance for that project being more successful = more money for them.

The above is assuming that the developers of the coin aren't just going to bail. Which this would then mean more people = more money for developers.

[AverageGlabella]

You raised some excellent points, all being the central key factors to consider when evaluating a potential investment.
I have realized that is is not up to the forum moderators to weed out every potential scam, being they're too numerous to keep up with. It is up to us, as a community to communicate with each other to provide the guidance from potential pitfalls we all face, from scams, and dishonest campaigns.

You are correct in that forum moderators won't remove scams and therefore it is up to us as a community ot decide for ourselves and where possible outline those who are scamming.