By now, ICOs are the hottest topic of discussion for all investors. Many investors want to make big bucks by investing early in a cryptocurrency which is yet to be released and earn lots of money as it begins to increase in value.
In fact, ICOs seem so attractive that everyone wants to invest in it. But this has also made ICOs difficult to trust because some startup owners ended up collecting money and not doing anything in return. ICO scams are turning rampant and it is becoming important for users to do adequate research about the ICO before they make the investment.
So how can you reduce your chances of being scammed? Read on.
- Is the ICO token De-Centralized?
The first thing to do is to check on the website whether the ICO offers tokens which are decentralized or not. Does the entire project have a transparent system which will easily be accessible to all users? This is a big assurance for many investors. Anything that is not de-centralized can be shady and hence may lead to fraud or scams.
- The Project Does Not Have A Specific Goal or A Proper Business Model
Go through the whitepaper and check everything about the project. If you find that a project does not sound authentic because the goals of the project are somewhat ambiguous then it is best to stop there and proceed to researching another ICO which may be more suitable for you. Projects without a proper business model may not be a good investment. It is usually not profitable to invest in such ICOs because:
- They may either not end up raising adequate funds
- They may simply turn out to be a scam that will leave you in a loss.
- Information About the Owners is Not Readily Available
Details regarding the project owners is important information. Check their background. Go through all information that will help you find out if they are reliable or not. If you feel that the founders have not provided enough information about themselves then it may be because they want to scam you.
- It Does Not Aim At Solving A Real World Problem
Does the project that you are investing in make complete sense? Is capable of solving a real world problem? If not then it won’t have enough backers and you may end up being caught in a scam. Avoid such projects. Always!
- Looks Too Good to Be True
Are they offering way too much? Is the entire deal too enticing for you to jump in without thinking twice. Stop right there. That is exactly what scammers want. ICO that seem unbelievable are truly unbelievable because they don’t exist. They are just a scam. Avoid them.
https://www.cryptocoinjudge.com/ and https://www.icotokennews.com/ are two websites which provide a lot of information for ICO investors. While Crypto Coin Judge is your go to website for details regarding different exchanges, their reviews and the new coins that are being released, ICO Token News provides a lot of insight for investors looking for ICOs where they can check for news related to different ICOs or they can start discussions regarding the live token sales.