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Key points to consider when you invest in an ICO

Oct 18, 2017 Posted /  8996 Views

Key points to consider when you invest in an ICO

There are numerous ICOs happening in the market, so it's better to know beforehand which ones have the potential to survive and make our investment worth the money, and whether investing in this area even makes sense.   

People invest a huge amount of money in hopes of high returns, and sometimes without even understanding what the underlying altcoin does or what it is, just that there is massive hype behind the ICOs and the scenario overall.

At a big level, what are some key points to be considered before investing in an ICO?

Is the ICO genuine? What is the driving force behind the ICO?

Cryptocurrency is highly predictive and ICO's are similar to them. If you're going to invest in an ICO, then you should know if the project is doing anything new or coming up with an interesting idea. When evaluating new cryptocurrencies, try to understand how the coin is intended to stand apart from everything else in that area. Is it going to solve any current problem within a specific industry that needs a disruptive technology and hasn't been thought by any other coin? Or Is it just doing the same thing like another?

The roadmap and details of the ICO

It's always a good idea to have a white paper as well as a detail of the project, but has the team really thought through their own project in detail?

If the white paper is short without any detail, better to avoid it. The white paper consists of all of the major to minor information one should need to know about the ICO. Once you've done that, go to forums to know about some of the loopholes that may exist within those White Papers.

What technology are they going to use?

One of the most important thing to any ICO is that if the team has already begun development and advancements of the system surrounding the ICO. The proof lies in the pudding as they say, and similarly, it should be in any technology trying to raise funding through an ICO.

Who are the team members? Who are the advisors to the ICO?

Does the team of the ICO have a real experience in the area they are attempting to conduct an ICO? If so, how much experience do they have? What about their relationships to the industry veterans who can upraise the project further?  At the end of the day, our investment is betting on the people behind the ICO, not the ICO itself. Our investment is a token of confidence that the team can pull off the wonderful feat they have set their sights on.

How will be the funds distributed?

How many projects are now raising over in million in one go? Is it suitable? Depends, but generally, it's not really necessary.  A small team developing an inventive technology potentially needs money in the low millions to start up with, in order to prove their instance. From that point, they should raise further funds once there is a real use case as well as a growth in their user base.

Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .

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