How to Invest in ICOs and don’t die in the attempt?.
Technological progress has radically changed the way in which investments are made, which in turn constitutes the business model on which many of today’s leading Internet companies are based. However, and despite its importance, measuring the value generated in these investments is complex. In such a way, that Blockchain based on cryptocurrencies or ICOs, could be the trigger of the Internet of Value, because it is a unique technology that can give birth to many new multi-million dollar companies. However, it can not assure investors against scams and frauds.
Therefore, investing is always considered a risk, therefore, it is necessary to be properly informed before making investments, especially in the current trend such as ICOs. Thus, ICOs are initial coin offerings.
At the same time, they are considered a tool that allows any private company to raise funds to finance the development of business projects related to cryptocurrency (Bitcoin or Ethereum), that is to say virtual tokens, protected by cryptography and that have a value in the market due to its scarcity and demand. It is a new way to raise funds.
In this sense, the ICOs process is based on generating this new currency and putting it on sale before having the whole project done, at a very reduced price.
The economic reward of the ICOs, is that everything goes well. If the project behind the ICOs goes wrong, part or all of the money invested may be lost. One of the main attractions of the ICOs is that the new digital currency can be exchanged for another more popular cryptocurrency, and this in turn can be exchanged for money, which translates into great liquidity.
In this sense, when a company, business or project announces the exit of an ICO, it does so through its own website and social networks together with a “White Paper”, which is the business plan that includes the description of the project, team, roadmap of milestones to achieve and financial plan with those who try to justify raising funds to build the equipment and infrastructure necessary to achieve the objectives of the project.
The funds raised are used to finance the final stage of development, commercialization or are sent to special development funds to support long-term projects.
In this order of ideas, despite the fact that ICOs are becoming an excellent investment opportunity, we must take many precautions, since by not being regulated, it could be very risky to invest, due to its volatility and lack of regulations, There are a lot of scams in the investments made in some ICOs, as they are highly speculative investments.
The European Securities and Markets Authority (ESMA) warns investors about the high risk of ICOs, as they are susceptible to fraud or illicit activities, due to their anonymity and ability to raise large amounts of money in a short period of time .
Therefore, experts consider that 90% of the cases, the ICOs remain in projects, are not reliable, because they do not present any innovation, presenting themselves as a big scam.
Therefore, it is necessary to consider some recommendations before opting for an investment in a certain ICO: it is necessary to investigate what is the novelty that it offers, not to trust those who only request money without making a clear offer of the project, to investigate who are the ones who support this type of investment, search the website of the developer team for names, links, profiles, do not trust anonymity, read Bitcointalk.org page: the new coins that are announced and also the answers of the developers who are responding questions.
Read carefully the whitepaper: document that all the new currencies emit and where they explain to the detail the vision of the project, the operations, how much money they need, the times, among others, as well as it is necessary to inquire about the irreproachable reputation of the people behind the draft.
In the same way, there are several technological platforms that can help decide which is the best option in terms of investing in ICOs
- CoinSchedule: ICO tracking websites whose interface is very simple, an aspect that represents a great advantage when it comes to visualizing what really matters: the new ICOs. On this website you will find information related to historical events for each ICO and thus to know about the changes that each platform has given.
- ICOindex: This website offers information on each ICO in large “cards” that will have data such as: Name, symbol, start and end date of the ICO and concept. In addition to two buttons, one that lead directly to participate as investors and another that will show more important details about the protocol in question.
- ICOWatchList: In this platform there is another important list of ICOs of different characteristics where a bar with the percentage of investment is shown, detail that helps to know which is the most popular ICO among the users.
In this sense, investors who want to acquire ICOs should not be dazzled by advertising, and misleading offers, should be; Investigate in depth about future contracts and other financial products where these virtual currencies are linked so you can make the best decision and not risk your money.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.