Cryptocurrency is a hot topic nowadays and a number of people are trying to invest in it. The trend
of cryptocurrency rose due to the sudden increase in the valuation of Bitcoin which crossed over
10,000$ by the end of 2017. There is, however, another thing in the crptocurrency world which has
succeeded to attract a huge number of people towards the idea. Initial Coin offerings are a new way
to raise funds and have taken over the traditional process of fundraising. It has revolutionized the
way of Crowdfunding and is gaining a huge amount of applause all over the world. This idea of ICO’s
has introduced not so much time ago during the advent of Blockchain and co.
Initial coin offerings open up the way for decentralized crowdfunding but there are high chances
that in the near future some of these Initial Coin offerings may get vanished but then some of them
can garner huge heights as well. The beginners or let’s just say that the investors who are new to the
Initial Coin offerings must properly invest their Bitcoin and Ethereum in ICO’s or else they may end
up losing all of their money at once. Here are some tips for the beginners before they invest in ICO’s
1. Go through the whitepaper line by line
The first step a beginner should do before doing anything related to investment in that ICO is
to read the whitepaper and evaluate the feasibility of the use case. Sometimes the MVP may
not be ready but if you find a project with the MVP then it’s super fine. It is also
recommended that you ask as many questions as you can to clarify the doubts you have in
your mind regarding their ICO but more importantly, try to understand their concept
properly. Once you have made a note of your research regarding their ICO, you can just
polish your knowledge by joining their social media accounts because in those social media
accounts you will find all the latest updates regarding their ICO. Also, find out the
competitors of the ICO and do a case study so that your money does not get wasted.
Educate yourself as much as possible regarding the ICO you are going to invest.
2. Research about the team that’s handling the project
You might have invested money in the raw materials and labors for building your own
house. Now if you find out that one of your workers is working very less in comparison to
the wage he is getting then it would be an injustice to you and furthermore will affect the
quality and turnaround time as well. Hence it’s your responsibility to replace that worker
with a valuable one. Here in ICO, you need to do adequate research on the project team
from their website not only for their quality but also to justify if they really exist or not. You
also need to check out if the team members have a questionable history or not. If this is the
case then don’t invest in that ICO.
3. Get knowledge about the coin distribution matrix
There is a major need for understanding the distribution matrix of the coin and its supply
before investing in it. There are projects whose coin distribution is Gargantuan but there is
no market model around then you should think more before investing in it. The ICOs with a
continuous inflation rate is big no. You should properly understand the sharing ratio and also
should acquire knowledge about the control center for the rest of the fund. You should also
question if they are escrowed or not but then if they secured by a tech, it will work. This
segment is more important than every other segment slightly and you should take utter care
of this segment.
4. Keep an eye on their announcements
It’s you, who is investing in the ICO but at the end of the day, the rules are of them only.
The ICOs have some rules and regulations and these rules sometimes change without any
individual notices. But then they will always share their changes in their social accounts or
blogs. The only way to know about these changes is by regularly following their social media
accounts and their website. You will, however, find most of their announcements in bitcoin
talk forum. Also, try to read the comments of people who are willing to invest in it. In this
way, you can get an idea of how much hype is the ICO getting and this will be deciding the
future of the ICO as well. Try to ask proactive questions and if you get banned for asking
questions that are relatable to the ICO then you just got saved from a scam.
5. Following the field expert in ICO
Experience does matter in every case and this is all the same. The personals who have
invested in ICO previously have a lot of knowledge because of the endless research he has
made. Try to follow them on Facebook, LinkedIn or Twitter and keep an eye on their statuses
regarding ICO’s. Try to engage yourself in the discussions for ICO and try to contact them
personally. You can learn a lot from them and which will help you too while you invest in an
ICO as a beginner. Let’s suppose that an ICO is trying to rectify a problem in the blockchain,
so what you have to do is contact an expert in the blockchain department and get an idea of
what the problem is so that you don’t face problem in future after investing in the ICO.
Not every ICO are genuine and if this statement is slightly modified then we can say that
there are very less ICO that are genuine in nature. So before investing in any ICO, we should
take utmost care and do adequate research about the project or else we may get caught up
in a bad investment at the end.