ICO’s were one of the hottest things in finance last year 2017. They are still around in 2018, but the sentiment has changed a lot due to the huge pullback in the cryptocurrency markets since the turn of the year. Unfortunately, due to the lack of regulation, the majority of ICOs you see being advertised to you on the internet are scams. However, the best ICOs have yielded a huge return on investments to people who got in early during the token sales.
You need to know how to be able to differentiate between the legitimate ICOs and the scams. You want to be investing in the best ICOs that have a high probability of making you money. If you are unsure exactly what an ICO (Initial Coin Offering) is, you can learn the basics in this article here. Here are the most important things you need to consider when looking at ICO’s to invest in:
Is There Actual Utility For The Coin
Common sense goes a long way in determining the legitimacy of an ICO. One of the first things you need to consider is if this coin is going to have actual people using it on a frequent basis in a legitimate industry. The best ICOs are fulfilling a big need in a major industry that may not be resolved any other way.
Here is an example of an obviously bad ICO: Recently there was ICO that was selling a token that would be used for strippers at a Las Vegas strip club. That is an obvious ICO that is not going anywhere, and will likely be a losing investment. If the ICO seems like it might actually have utility in an industry, you should then start doing some background research on the people behind the ICO.
Research The Team Behind The Coin
This, in my opinion, is the easiest and quickest way to determine the legitimacy of an ICO. Do Google searches on all the high ups behind an ICO you are considering to invest in. Do not trust the descriptions of the team members on the ICO website. They will most likely be biased and not mention any suspicious history if they have any. If any of the people on the team have criminal backgrounds or have no successful track record of successful business ventures, that is a major red flag.The best ICOs have a team of established and credible individuals, with extensive background experience in the field of their ICO. If you are unable to find any information (good or bad) about anyone on the team, stay away. It is better to be safe than sorry.
How Is the ICO Being Marketed
The best ICOs have a professional manner of marketing their coin. They have a way of verifying individual investors and have a secure system set up for taking your cryptocurrency payments. Be suspicious of anyone emailing you or DMing you on Instagram asking you to send ETH or another cryptocurrency to some random address.
Legitimate ICO’s are looking for accredited investors. Scam ICO’s are just looking for a quick buck, and will take donations from anyone. That’s why they are DMing random people because they are just looking to take your money and run with it, or just do a pump and dump once the coin goes on the exchanges.