The Crypto Guide for Beginners – What to know before investing in an ICO?
With the massive amount of ICOs happening lately, it’s difficult to know which ones have true potential for success or represent legitimate business interests.
Some people are investing in ICOs due to the hype surrounding them. Perhaps they hold hopes of becoming millionaires overnight. But as the saying goes: if it were that simple, everyone would be doing it! Here are a few basics to consider before investing in an ICO:
Does the cryptocurrency have purpose?
- What is the purpose of the token?
- Is it solving a current problem, is it something new on the market or is it improving an existing solution?
- Is it just a copy of something already existing?
What’s in the white paper?
- How detailed is the information provided in the white paper?
- What are the milestones, and how realistic is the timing?
- Do you understand the plan?
How developed is the technology?
- How developed is the technology?
- Does the team/company already have some proof of concept?
Who is the team?
- Who are the people behind the ICO?
- Do they have experience?
- Do they have any success stories?
- How big is the network/community?
- Do they have advisers?
How high is the funding amount?
- How much money does the team want to raise and what for?
- Is the amount realistic for the planned project?
- Is the amount too much or too low?
If you want more opinions regarding these questions, check out the following articles:
- 5 Things You Must Know Before Investing in an ICO on steemit.com
- How to Invest in ICO? How to Know Which ICO Is Worth Investing? on managingyourfinance.com
- How to make sure you don’t get swindled in an ICO on mashable.com
ICOs are highly speculative, so be sure to properly check the company behind each one, and only invest as much as you can afford to lose.