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Study the project team
It’s essential to evaluate the project team. Are they hiding their real names? Can you find their profiles on social media? Do they have technical experience? Are they strong in marketing and do they have experience in large projects? Consider if they can not only attract investments but build a change resistant business.
Check website addresses, email addresses, and social media accounts
Before investing in an ICO, double check that you are on the official site. Scammers can copy a legitimate ICO website and steal funds. They not only copy and crack websites but social media accounts and email addresses as well. Don’t trust private messages on Slack, because it’s one of the most favorited platforms by scammers.
Check the project’s website design
Scammers don’t really put a lot of effort and generally try to save money on designers and developers. If a project’s website doesn’t look presentable, consider that an extra reason to contemplate as to whether or not you should invest. Projects with high success rates always spend a lot on their design.
Carefully read the Whitepaper
Read the entire whitepaper. There absolutely must be a project roadmap, information about what gathered funds would be used for, how tokens will be used, and information about the team and project advisors. Make sure that you are satisfied with everything. If something isn’t clear, clarify it with the developers. As a rule, scammers either don’t answer questions at all or answer rarely and in a vague manner.
The startup should not be limited by a narrow niche or one region
If a project is tied to some specific region, then it starts to depend on the actions of government regulators. Additionally, if the project is targeting a very narrow niche, then the disappearance of that niche will lead to the project’s failure.
A project must target a global audience and strive towards decentralization. A great practice is to invest in ICO startups which add something to the development of the Blockchain ecosystem. Because your Investments will grow in synch with the crypto industry.
Be cautious towards projects from a real sector of the economy
Currently, it’s ill-advised to invest through ICOs to the construction of factories, automobiles, raw materials, farming, and etc. As a rule of thumb, these projects have serious competition with huge budgets – and the chance of success for these ICOs is insignificantly small. Additionally, there is no sufficient legal basis for the interaction between crypto economies and real sector in existence.
You shouldn’t invest in crypto assets that are tied to real estate, gold, and other physical assets. Even in the case of fortunate circumstances, expected earnings from these investments are too low to justify the risks.
In the USA, one of the first cases of fraud involving an ICO occurred when two companies, Diamond Reserve Club World and REcoin Group Foundation, acquired funds to work with diamonds and real estate. Developers didn’t even begin fulfilling their obligations, and no work was done at all.
Learn from those who have already invested in an ICO
Search for information pertaining to large crypto funds investing in startups that interest you. If large investors trusted an ICO with their resources, that means that their analysts already carried out some full-blown research and came to the conclusion that the project in question has some promise, and that the team can be trusted.
What do people write about the project online?
Read reviews and discussions on popular forums and media outlets like Bitcointalk and Reddit. On large forums, developers frequently participate in discussions, and a lot of questions that investors may have, are commonly discussed.
Evaluate if the tokens are promising
As an investor, it’s favorable to you if the token price continually increases, it’s essential to understand what kind of value tokens will have after an ICO. Figure out how the tokens will be used in the project, will there really be in demand? Are there reasons for as to why the demand for the projects tokens should grow?
Check if whether or not there will be more tokens released post-ICO. If yes then the developers need to substantiate as to why they plan on issuing more tokens in the future, and how they will protect the tokens from inflation.
Seek out the assistance of professionals
Professional advisors and analysts do offer services. They independently research the ICO for reliability and provide you with protection from the majority of scammers. Additionally, crypto funds and traders, that can carry out investments in the interests of their clients exist.
The only drawback here is that you might have to check their competency, and the services of professional advisers and cryptofunds are only accessible by large investors.
Use platforms for safe investments
We offer our project Safinus, which is getting ready to enter its pre-ICO, with the idea of ensuring secure investments in ICOs and cryptocurrencies.
We are creating a system where experienced investors, traders, and cryptofunds will create investment portfolios, the profitability of these portfolios will be verified through the Blockchain.
Beginner investors will be able to chose a suitably profitable portfolio from the rating system and invest in it with just $100. No research or even an understanding of the cryptoindustry is needed to do so.
ICOs will be added to the exchange only after receiving an approval from the community of professionals via a vote, which will provide insurance and protection from dishonest market participants.
Conclusion
The crypto market is young and not yet regulated, thus, the investors of today need to be extra cautious in order to stay safe from high risks. However, the cryptoindustry is growing, and the market is developing alongside with it, new services and tools for regulating the market and protecting it from scammers are appearing.
The Blockchain ecosystem will gradually create an immune system against dishonest community participants. Not only the market will strengthen, but the flow of ICO investments will go towards actually useful cryptoindustry projects, and investors will be able to earn more with greater security.