Invest in a crypto-currency is still a risk. It is, however, compensated for by prospects of profits can be spectacular. With the ICO (Initial corner offering), this is the same concept, but on steroids : choose wisely and you hit the jackpot, make a mistake and you lose everything, or almost. We can, however, minimize risk by selecting carefully to its ICO. In this article, I offers you a few tips to choose them.
The hard cap and the number of tokens
Before digging into an ICO, the first thing I look at is the number of tokens that will be put up for sale, as well as the soft and hard cap (i.e. the amount of the minimum and maximum funds that the issuer of the crypto-currency wants to raise). This enables you to evaluate the market value of the crypto-currency once the ICO is completed, and see how it is positioned in the ranking of CoinMarketCap. Thus, we see that the ICO is placed directly in the top 100. Suffice to say that the upside potential is limited, even if it is necessary, of course, take into account the potential of the project.
The whitepaper (white paper) and the site
Before you rush into the purchase of a crypto-currency in advance because it promises mountains and marvels, you will need to do your own research. No need to worry if you are using the review sites on the ICO, but don’t take their opinion for cash (whether for good or bad). Ditto for the forums, which are jam-packed with trolls and influencers are professionals. You should therefore carefully read through the website of the ICO in question, and especially its white paper.
White papers with a strong connotation of marketing tend to make me flee. Of course, marketing is an important factor in the success of any commercial project. But when the formula is followed for 30 pages… attention. For example, I read a white paper that promised to engage with the money raised during the ICO, a great artist, Rihanna I think, to give a private concert on the platform. Thank you, goodbye…
That said, an ICO very oriented marketing can be a winning horse having regard to the characteristics of the market of crypto-currencies. But often it will be paris in the short term. How do I know when the end of the “pump” will take place ? I advise you to monitor when the tokens reserved for the founders and the team will be released (it is in principle indicated in the white paper).
The potential concreteness of the idea of the ICO
Many ICO are based on a proposal whose scope is much too limited, or uncertain, to justify an investment on your part. Before you commit, also check if the crypto-currency that you are planning to buy will face the competition. The more a token is aimed at a new market and scale, the more likely they are to impose them, and therefore see its value increase. Of course, a little competition in a huge market (energy, for example ) is not a concern. The ideal is still to find the first incoming. For example, I bought the ICO INS, which offers a platform for the sale of products from the manufacturer (from the multinational to the small SMES) to the consumer. It is a huge market on which any crypto-currency is not currently present.
Win a lot with an ICO ? Maybe… or not ! Source : Pixabay
The team behind the idea
Even the best idea in the world will come to nothing if there is not a team to be responsible for the wear. The website of the ICO must provide the list of the members of the team, which must cover all areas required to carry out the project (technical, operational, communication, marketing, etc). If there are 3 or 4 people behind the project, I want to give everything away. Advisors from successful projects are also a guarantee of safety (but not certainty). Please do not hesitate to do some research on Google about the CEO and the other key figures of the team. You learn sometimes very interesting things…
A business in place
The principle of the ICO is to start the idea, it therefore must not be necessarily a structure in place that has proven successful. But from my point of view, this is a criterion very convincing. This proves that there is already a market, that the team knows it and she already has clients and partners. For example, I participated in the ICO Energi Token, a british company in the energy sector, which already generates turnover of half a million dollars by managing electricity contracts with a value of $ 150 million. A concrete project, seasoned professionals, a market that exists, customers… all of this with a hard cap reasonable of $ 15 million, ETK meets almost all my criteria.
Bankera is another example, with its site SpectroCoin.com. I have also recently participated in the ICO, despite its hard cap high, because it sells tokens to dividends (4 % annualized) in the last payment).
The code on Github
In principle, the code of the crypto-currency is open source and published on Github. The people who have knowledge in programming will be able to take a look at it. If you know anything, you can still check out the activity that was held on the code, in terms of updates and the number of people working on the project.
In conclusion : an ICO, it is always risky
We can do its investigative work, very conscientious, it is not in the least participate in an ICO is always risky. I am, however, convinced that, by following the tips above, you will make more winning bets that flop. Please note that I have referred to some of ICO in which I have participated above just to illustrate my point. It is by no means investment advice.