An ICO refers to when an investor offers a new cryptocurrency for a sum of established ones, namely Bitcoin (BTC) and Ethereum (ETH). The issue with ICOs is that the risk is incredibly high. When you’re buying cryptocurrencies that have no intrinsic value, the likelihood of it being lost is considerable.
As you may have seen in some cases, an entire group of cryptocurrencies can crash and disappear from the market forever. Therefore, you need to learn the difference between a genuine ICO and a scam so that you can trade safely and profitably. With that said, here’s all you need to know about distinguishing ICOs:
Check for Transparency
When you’re looking to determine whether an ICO is credible or not, the first thing you need to pay attention to is the transparency. A stable ICO will have nothing to hide, so the person selling it should have no issue presenting you with the information, history, and data regarding the said crypto.
This information should be up-to-date, factual, and traceable so that you can do some research to decide whether or not it’s a worthwhile investment. You never want to buy anything from someone who has the intention to omit crucial information from you or straight-up lie about it, which is why you can never be too safe when it comes to an ICO.
Look for Whitepaper Reports
Whitepapers are ICO audits that tell you all you need to know about a cryptocurrency. It provides an authoritative report about the currency and includes a market analysis, projected financial values, demand direction, and more. If the ICO company doesn’t provide these reports, it’s fair to say that you should leave them be and never look back. A genuine business will have nothing to hide, so you need to be sure to look for whitepaper reports before you decide to commit to them.
Pay Attention to the Codes and MVPs
Keeping with the theme of transparency, a trustworthy agency shouldn’t hide the code for their program and website. By checking these online platforms, you will be able to see how they conduct business and where your information will go after you have granted them access permission. ICOs are sometimes used as a way for scammers to gain valuable information such as bank account numbers, credit card information, and personal details. For this reason, you should be vigilant about these risks so that you can protect yourself from these schemes.
A good way to check if an ICO is genuine is by checking their MVP. By having a history with an MVP, you know that they have worked on the same type of projects in the past and whether they are proficient with the technology they’re dealing with. Be sure to check for their certificates and qualifications every time you’re looking to work with an agency.
Search for Business Credentials
Lastly, what you should look into is an agency’s portfolio and years spent in the business. Since ICO is a relatively new trading platform, the specialized firms that were recently opened may not have as much expertise in the domain that they would like to believe. Therefore, the most reputable agencies in the market are typically large corporations that have branched out into the ICO market.
These agencies will have a traceable history as well as the information of each employee. We’re not saying that all young ICO companies can’t be trusted, as that would be a gross misrepresentation of the industry.
However, it is fair to say that businesses with credentials and history are generally more trustworthy than ones that are recently established. Additionally, large corporations are able to afford skilled research teams and state-of-the-art tools that can help them to dominate the market. Therefore, it’s a safe bet to start with an established company when you’re just starting off.
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