ICO investment – A guide to safety: Verifying an ICO
Initial Coin Offering or ICOs for short are gaining a lot of traction due to huge return in investment in a short period of time (3000%+ in some cases). And when the good rises, bad rises too with it as well. ICOs have become a perfect playground for scammers.
There are currently 7800+ ICOs being offered in the market with only 200 of them being verified. What about the rest 7600 then? It is important that you do your own research about a coin/token rather than just following media or crypto groups. Down below you will find some tips on verifying an authencity of a coin.
Tips to Verify a Coin/Token
This guide will give you some of the best practices used by me and other successful investors in verifying the legitimacy of a coin.
- Read the White Paper: Every ICO in the market publishes a white paper. Read them before buying token and coins. A good white paper would tell you its mission, use cases, business model, project roadmap and risk factors. If any of the following above mentioned points are missing, proceed with caution regarding that coin/token.
- Check the Source Code and Projects (if available): Most of the coins/tokens in the market have a Git profile and have some (or in some cases all) projects available in the open source domain. Read them. Go through the issues related to the project, and also the time it takes for an issue to be fixed. These parameters would let you know about the reliablity and dedication of the team. A crucial element in an ICO’s success.
- Research the Team: It’s good to know the team behind a coin/token. If a coin/token is being backed by developers of popular projects, you can be sure that the coin/token is legit. But don’t just blindly follow what’s written on the website. Reach out to team members and get a clear understanding of what’s going on inside.
- Website and Whois information: Many people overlook this factor, but it can save you from scam a lot. Simply check the website’s information of whois.org. Look for Country of origin, date of domain registered, IP address. The check whether the IP address has been previously blacklisted. These information can give a clear idea on a website.
- Source of Information: Always look at the source of your information. Make sure it’s legitimate. A good source would be the one which will help you. Some good sources are: Crypto Trade Talks, CryptoNews, Medium, Reddit, Influencers on Twitter.
- Telegram Channel Of an ICO: Every legit ICO has a good telegram channel with a vibrant and growing community. Join them, discuss with other members on what their thoughts are, why they are investing etc. If members only keep talking about huge returns but have no explanation on why, red flag that ICO immediately.
I hope you will follow these tips. Remember always do your own research before investing on a coin/token and do not just blindly follow whatever people say. Stay safe and happy investing.
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