Would you like to know what are the things to look for when buying into an ICO because this might help you make the right decision when the opportunity arises?
What are the Things to Look for When Buying into an ICO?
The Initial Coin Offering (ICO) is the initial sale of coins of a particular cryptocurrency before it goes mainstream. ICOs usually offer the coins at a price that is more affordable than when the coin goes mainstream and mining begins.
While it may seem like a good idea to buy ICOs and resell them when the price spikes in order to make a profit, this is not always beneficial.
The cryptocurrency may not pick up as expected and your money may just go down the drain.
What should you do?
Ensure that the ICO you invest in is worth your money and it promises something that cryptocurrency users cannot resist. This means that with time the coin’s value can increase and you will be able to actually make a profit from selling what you obtained during the ICO.
It is important to note that the main purpose of ICOs is to raise money from the public before the product is developed. This money will be used to develop the cryptocurrency and you will be given tokens that can later be sold for a higher value.
But what should you look for before buying ICOs?
The white paper
In the crypto world, the white paper is the document that contains the project’s details and goals among other useful information. It is from the white paper that you will find all the information you need to know about the cryptocurrency.
It will most probably be a long document but taking your time to read the white paper will be very beneficial. It will help you identify whether the project is a game changer or is just one of those hypes that will come and go.
When looking at the white paper, take a close look at the analysis and descriptions given.
What problem does this new project aim at solving?
How will the digital token be implemented?
When will this token be available for exchange?
And much more!
Read the white paper very carefully ensuring that you understand everything even what is in the finest print. Use this information to determine if this currency is going to have a positive reaction from the market.
Only buy ICOs of a project that you are truly convinced about its future.
Who are the people behind the project whose ICOs you want to buy?
Do they have any experience in the crypto technology?
What other projects have they worked on and what success was achieved?
The team leaders of a good ICO should be experienced and have a good reputation. They should have succeeded in their previous endeavors for you to trust that this one will too.
You will find information about the team behind a project on the platform used.
Usually, there is short bio and links to social media pages such as Twitter, LinkedIn and Facebook among others. To be persuaded, be sure to go through these pages to find out who the people really are. Based on what you see, you can then determine if they can be trusted or not.
Never buy ICO from a project whose core team is a secret. This could be a team of scammers out to dupe you of your hard-earned money.
Better stay safe than sorry!
What is the technology that will be used in the project?
This is very important because it will determine the viability of the project.
It is hard to understand the technology and coding of the project if you are not a developer yourself, but it is worth looking into. The code should not be too messy with mishaps as this is a sign of inexperience on the part of the developers.
By the time the ICO is launched, the code to be used should be complete.
If it is not, this should raise a red flag.
Keep away from investing until this technology is out in the open.
The road map entails details about the future of the digital project. You should not just be concerned about what happens when the project hits the market, but also what happens thereafter.
A road map shows the progress and milestones expected from the project. It shows the direction the ICO will take upon launch.
Look at the road map very clearly and you will see what the projections are.
Are they realistic?
Are they promising?
These traits of a road map will help you determine if investing in the ICO is the best decision.
There you have it, the four things to look for when buying into an ICO.
Consider the above and you will make the right decision.
Remember that buying ICOs can be good business, but it may also be a costly mistake if you buy the wrong digital tokens.
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