Every month, new tokens and coins are being released, often along with initial coin offerings (ICOs). Even though cryptocurrency prices were battered throughout 2018, investors remain eager to explore opportunities related to ICOs and tokens despite this volatility; all this attracted scammers as investors have shown they’re willing to risk investing in risky cryptocurrencies; this may tempt some to try their luck investing in fraudulent tokens or ICOs as well.
As more cryptocurrency investment opportunities emerge, investors have struggled to protect themselves from fraudulent ICOs or unsafe coins and tokens. Even experienced investors find it challenging to keep up with the constantly-evolving terminology surrounding blockchain and cryptocurrency technologies – though these guidelines will provide as much assurance that you won’t get taken advantage of.
Get To Know The Team
A crucial aspect of any ICO or cryptocurrency project’s success lies within its development and administration team. Vitalik Buterin, the creator of Ethereum, can make or break new initiatives by being listed as part of their development team; due to scammers often creating fake biographies for initiatives with fake founders listed. Therefore it is vital that any team you include carefully be vetted.
Before investing in any project, conduct extensive due diligence on each team member. A telltale sign would be finding no information on a founder or developer on LinkedIn or social media platforms such as Twitter; even if their profiles exist, check whether their activity aligns with their followers/likes – individuals with thousands of followers that don’t interact could be fake accounts.
Finding out whether a development team exists is of critical importance; but even more crucially is ascertaining if their qualifications match up with what they claim they possess. Do the founders possess relevant experience for your current project?
Pore Over The Whitepaper
A whitepaper for any cryptocurrency or ICO venture should serve as the cornerstone document, detailing its history, goals, approach, drawbacks and timeline for implementation as well as providing essential background information. Reading over this document may give you invaluable insights; for instance, an impressive website may conceal an inadequate concept while companies with error-filled sites might offer insightful implementation plans and strong concepts.
At first glance, a whitepaper may appear simple to read; however, it is imperative to take your time in reading from beginning to end and ensure the whitepaper includes additional resources such as financial models, legal issues, SWOT analyses and implementation roadmaps.
Avoid organizations that do not publish whitepapers at all costs. Although PlexCoin was able to raise over $15 million before being shut down by the U.S. Securities and Exchange Commission (SEC), fraudulent companies could still present convincing whitepapers that answer all your concerns about what differentiates this venture from its competitors, how it will prosper, and the steps being taken toward meeting its goals.
Look To The Token Sale
Any initial coin offering (ICO) requires some sort of token currency system in order to facilitate crowdfunding. Legitimate business initiatives offer potential investors the chance to see first-hand how their token sales operate and advance. If you want to monitor the token sale’s progress, keep tabs on it as the ICO unfolds. Sale percentage is one metric used to evaluate an ICO’s success; if a company makes it hard for anyone else to keep up with its progress then this may indicate fraud or scamming attempts. Some fraudulent ICOs try to deceive investors by hiding the token sale progress behind personal payment addresses, making it harder for potential investors to assess how much money has been raised and the remaining time in the sale period – creating a sense of urgency even though no evidence shows there’s currently an ongoing successful sale at hand.
How Feasible Is The Project?
Successful initial coin offerings (ICOs) and cryptocurrencies tend to be those that possess the greatest potential to outlast their rivals. Many big releases, even those which attracted much interest initially, have languished after public interest faded. To make an intelligent investment decision, goals must be realistic yet obtainable if one hopes for long-term profitability; companies need a captivating idea but must also have the ability to implement that vision over both short and long term timescales.
Transparency is another vital consideration. Companies with outstanding concepts and models may wish to be as open with their public as possible; therefore it’s crucial that investors receive regular updates via website or social media regarding progress reports or progress reports on its website or social media. It also helps investors see what has transpired throughout development process over time.
Exercise Caution
Even successful ICOs and cryptocurrencies have come under scrutiny for relying on speculation to fund growth. The lure of quick gains on investments with promising new ventures tempts both veteran investors and novices into taking risky bets. Be wary when seeking new investment opportunities in ICO and cryptocurrency spaces. Projects that appear too good to be true likely are. When investigating such investments, always ask questions you don’t already have answers for. An incomplete project or concept could be harmful, so always confirm its legitimacy with outside resources before investing and pose questions if you can’t already find answers. Cryptocurrencies and initial coin offerings (ICOs) present investors with tremendous opportunities, provided they do their research thoroughly. Poorly designed businesses may lead to massive amounts of money being lost due to scams, frauds or pitfalls – these opportunities must be explored carefully for optimal returns.
