Last year, a few cryptocurrency related news sites said 2018 would be the year of the ICO. Assuming they were right, its a good idea for an interested beginner to know how not to get ripped off, especially with all the talk of so-called Legit Coins ending up being nothing more than hot air.
So what should we look out for when investing in an ICO? Here are three easy things you might want to cross off your checklist before going all in.
Disclaimer: This is not investment advice but reflects the opinion of the author. Do your own research before acting on any of the information provided in this article. Any form of investing including ICO’s and cryptocurrencies cannot guarantee any return and carries the risk of loss. As with any speculative investment, do not invest any capital which you cannot afford to lose.
1. The roadmap.
I guess it goes without saying that a start-up firm that is doing an ICO would be ambitious. So the first place to look would be the particular start-up’s roadmap.
Look out for unrealistic promises, you know, saying things like “only profit, no losses”, Legit coin claims their token which sells for $2 now will be $70 in March. How? Only the ” LEGIT” coin team and God know. There are many startups looking to screw you so pay close attention to their goals and how they plan to utilize the funds they raised.
2. Who is behind it?
Advisors and The Founders of an ICO are also a good place to start looking for leakage. It’s common for fake startups to display images of people who are not even involved in the project. If you look at the example of Legitcoin, it was co-founded by a certain Mark Lee and his associate Steve Forster.
The site (Legitcoin.me) says very little about these individuals, nothing about their qualifications, nothing about previous work experience and no public profiles on these people(no Facebook, no Twitter, no LinkedIn, squat).
3 Online forums
For many years people have said that word of mouth is one of the best marketing vehicles. In this instance, it kinda cuts both ways. Don’t take ICO and crypto related forums for granted, find out what people are saying about the ICO you’re interested in. Don’t be shy, it’s your money on the line, post open-ended questions and see what you get.
A good place for discussion on upcoming alt coins is the Bitcointalk.org forums among others. Human beings will always try to find shortcuts, here, research will be your saviour. Pay close attention and do your own research, happy hunting.