Recently, as a result of ICO, a lot of new coins appear. Below are some important tips that will help you decide which ones are bad. It should be noted that in each rule there is an exception, and in the preparation of this material, there were no specific coins in mind.
In addition, most of these rules apply to long-term investments. In the short term, you can earn on any tokens (quality and substandard), if you buy and sell at the right time. These recommendations can be used both in the analysis of ICO, and in the study of coins that are already traded on the market.
So, the basic rules are:
- A dirty trick can be suspected if the team promises some things that it can not fulfill. Promises of guaranteed earnings can be immediately considered false, since it is impossible to accurately predict anything in the market for crypto currency.
- If the project team is anonymous, then this is suspicious. When implementing a conventional project, there is no point in hiding such information. If you hide these data, the project may be a scam (fraud).
- Lack of technical documents or working product. The idea can be great, it can be revolutionary, but without any relevant documentation or patent, it becomes useless. The larger the idea, the more difficult it is to realize.
- If the issue of coins is declared as a large-scale project with a small team, etc., then this is not always a good sign. It’s silly to think that ICO with a team of several people without any product can conquer Google or Yahoo.
- If the project has a road map developed several years in advance, it is very likely that by the time being the product will already be released by someone else.
- Do not be deceived by a large team of consultants. Many of them participate in the project only for their PR, or because they are paid a lot for it.
- Ignore corrupt ICOs: in many projects the team gets 30-40% and declares its decentralization, which is not always true.
- Do not be fooled by tokens with low cost, as this may be due to market capitalization. So, a coin with a market capitalization of $ 10 billion can cost $ 0.1, and a coin with a capitalization of $ 1 million – $ 10.
- If there is little information about the project team or a minimum of contact data, you can suspect that the organizers have something to hide. Especially when there are no links to profiles in social networks.
- Do not rely on teams with poor marketing. Even with a good product, the project can fail, because marketing is one of the most important aspects in the formation of any ICO.
- You need to stay away from projects that are not available in social networks. Any advertiser first of all promotes their product through social networks.
- Be careful with companies around which there is too much hype (hip). This can lead to audits and investigations, which will lead to the conclusion that all the facts were clearly embellished.
- If after studying the pages of the site much remains unclear, then do not invest in such a project.If an ordinary person can not understand the product, then this is a big problem for the team, since they are poorly presented with information.
- No need to worry that the project begins with a small one. In fact, it’s great to start with a minimum and grow. An example of this can serve as facebook, at one time the team began with a social network for Harvard University, which was localized and developed into the largest social network in the world.
- It is not always necessary to ignore small projects. There are projects with a capital of $ 10 million, which have the same potential as projects with a capital of $ 100 million.
- If there is a lot of competition on the market, it is important to make sure that the company mentions this in its documentation. If the project is similar to the other one, and this is not mentioned in the technical documents, then it is better to avoid such products.
- It is necessary to pay attention to the name. When investors check the project and find it at the bottom of the page when searching Google, then this is clearly a bad sign.
- If the documentation of the project simply explains what blockage and bitcoin are, it’s suspicious.It is important to find specific details of the product.