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Investing in ICOs/Cryptocurrencies – beyond whitepaper & marketing

Sanket Agrawal
27th Feb 2018
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After having approached by so many people wanting to invest in upcoming ICOs, to understand what makes an ICO worthy enough to invest in, I thought of putting down my own ways of evaluating an ICO, which is beyond whitepaper and marketing of the ICO.

1. What is that real life problem the product is going to solve?

Go through the entire website and the whitepaper in detail, to understand what is that real life problem the company/team is trying to solve using the Blockchain technology. Is the current problem facing any challenges being on centralized system? How using Blockchain the project/product is going to help the consumer of the product. If the project is going to make a difference in the way people live their life or the way they transact, it’s definitely worth considering. This includes the mission and vision.

2. The people behind the project.

It’s really important to know who are the people behind the project and to understand what made them start working on the project. As ICO’s are nothing but a model of crowdfunding, it becomes really important to understand the “purpose” of the project and the founders have started for the right reasons. Go through each founder, team members profile, and see if they have enough industry and technology background to execute the project.

3. How transparent is the team?

While having a strong team to execute any ambitious project is must, providing transparency about all the owners, founders, directors, technical and management team members is utmost important too before asking people to invest in the project. So, make sure you do your own due diligence by verifying this before investing your hard-earned money in any ICO. Make sure all the owners and founders are leading from front and present on all social channels.

4. How feasible is the roadmap?

Giving a detail-oriented look at the project’s roadmap you can come to know many things about the ICO. One should analyze the entire roadmap carefully and see how the major milestones are placed. It’s not hard to determine if the team will be able to deliver on each milestone by taking a close look at the team and their expertise and past experiences. If the project requires a lot of external partnerships to be done, make sure the roadmap talks about it.

5. Quality of Github code is good?

In the software world, how the source code has been written says a lot about its quality and can easily reveal how much importance is given to the code by the team. I suggest to take a look at the all the information including the code and review it thoroughly. If you are not a technical person, you can check with someone who understands technology and helps to take a look at it. If there is smart contract code available, make sure its reviewed and audited by a cybersecurity agency.

6. Is community sentiment positive?

ICOs are nothing but another way of crowdfunding and when we talk about crowdfunding it's really important to know what do people feel about the project and its use. To know more about this, make your how much importance is given to the community building activity by the team behind the ICOs. Be a part of their telegram or slack channel and try to analyze the sentiment of the discussion happening on these channels. You will come to know on your own if the project is moving is moving in right direction and people are excited about it positively.

7. Use of Blockchain Technology

As we all know, Blockchain technology enables decentralization and helps in solving problems related to the centralized system, brings more transparency, and helps in building trust by eliminating third parties intervention. Make sure the problem really needs a Blockchain based solution or not or the team behind ICO is just trying to ride the wave. The product should use Blockchain technology at its core to solve a problem associated with centralization.

Disclaimer: The above content/publication is intended only to provide a general overview and is not to be used as a basis for the exercise of any business or professional judgment.

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