How Not to Fall for Scams – Rules Of Choosing ICO
ICO flow is growing as well. Are you interested in healthcare? There is Well platform that connects patients and doctors. Do you want to create your own cryptocurrency? Support Hero startup that makes it possible in only two clicks. Do you respect eSports? Invest in Game Stars that helps to monetize tournaments for cyber sportsmen.
It’s obvious that many frauds are entering the market together with such a demand. It is estimated by consulting company Satis Group LLC that 80% of analyzed ICO are scams and only 8% of projects are allocated to crypto exchanges. How not to lose your tokens in scam projects? Read below.
“White noise in your head”
It doesn’t matter how much you believe in people, there is a need to start with soulless documents. The most important document of any ICO is the White Paper. This is where you find plans for the team for gathering millions of your tokens. The project, its use and plans, business plan and market analysis should be introduced in the White Paper – it should look like a decent presentation for the investor. It’s a benefit if the White Paper includes parts of the code, links to a repository (storage location of funds) and technical details of the project.
The simplest way to figure out that the project doesn’t fit you: you didn’t understand anything in these documents and there is a white noise in your head. Don’t think that you are not advanced enough for those specialists if the project is described with the use of complicated technical terms and calculations. Quite often there is a scam hiding behind smart words.
“Bam! and they have launched”
Check out launch dates of the project while reading the documents. There is the 2nd important document for that – Roadmap. It should have a detailed information about further actions and dates. First of all, they should simply match in all documents and be adequately evaluated. Do not expect the release of the project a month after the fundraising stage if you don’t even see a prototype. And yes, the prototype is a good sign of a fair project. If the project presents you a super-quick time-frame, it can be a scam.
“What’s the address…”
Keep on reading the documents. Check the registration of a legal address, its existence (it’s easy to do in Google Maps). Check the domain where the website is registered. For how long does it exist? Was it created only couple days before just for the ICO purpose? Ideally, the project should have some achievements and communities around it. Check the ICO ratings at icorating.com, tokentops.com/ico/scam.
“Who are those people”
If the documents are alright then it’s time to check the team and its past. The website should have information at least about a part of the team and it’s not the right time to be modest – if you don’t see the list of people achievements, their portfolio (preferably in the same field) there is a reason to think about what they can actually do. Google names, contact information, addresses, check out social network profiles. Just meet people – what if they aren’t going to contact you? You can also reach advisers of the project and other investors (for example on bitcointalk.org) – it’s more fun to take a risk together.
“Where have I seen this”
The laziest scam-producers just copy other websites, project description, and any other information. Check the website for plagiarism.
“Money, a lot of money”
There are no miracles – if you have a feeling that “Now my life will significantly change!” after you’ve read the info about the project, well, sorry to say but it’s a scam. Adequate ICO doesn’t offer enormous profit, cosmic referrals and don’t assure you in minimum risks. Don’t fall for classic Ponzi Scheme – a promise of high profits and guarantees.
“Half of the kingdom in addition”
Take a good look at the investment subject – what will you get in return? Learn about tokens – what the coin emission is, what blockchain, why tokens will increase in value if it is possible to buy coins back if there are any bonuses for coin holders. The most important – what value will they present after the end of the ICO. The team usually offers a percentage of profits, discounts for services and products of the project, tokens also can be used as an internal means of payments. There shouldn’t be any problems with withdrawing funds. Tokens are mostly issued with an open code. It doesn’t mean that the project will be a scam if the code isn’t opened, but sometimes it turns out that closed code means its complete absence.