ICOs are available to public to invest in Blockchain Businesses. These raised more than $1 Billion last year and are expected to raise twice by the end of this year. While ICOs are doing their part to promote blockchain technology, unfortunately there are some bad apples that give them a bad name.
Yes, you guessed it. We are talking about ICO scams. If you want to investment in an ICO, following we are going to tell you how to tell a legitimate ICO from an illegitimate one.
Use Cases Doesn’t Need Blockchain
Every Business doesn’t use Blockchain because everything is not decentralized. Its very obvious with the hype around blockchain technology and its potential. Even different projects need payment in cryptocurrency.
Therefore, when you evaluate an ICO, check if you need a blockchain or a native token. If you can’t find any of these, its obvious the ICO is a scam.
Open Source Projects with Empty Repositories
If the ICO Project promises open source code, which is empty or nonexistent, then it’s a clearly a fake. Public blockchain projects are open sourced, the code based is uploaded to a repository for examination.
If you have a blockchain programming to look for published code which checks the project’s validity.
A quick giveaway of scams is they don’t share how the technology works. Nontechnical investors can check if the project has existing files uploaded to public repositories with functioning products.
Mining Structure and Development Team
Use supple schedule and mincing structure of a Potential ICO to cross-reference data points and validate the platform. It works as a portion of tokens for crypto is dedicated to small group before being made publicly available.
It is crucial for the platform to reward developers and investors. The percentage of tokens supplied through the lifetime of project saved for pre-mine is high. This calls for concern.
There are many examples of established ICO which turned out to be a fake. These platforms had majority of tokens reversed for developers. If a platform favor developer, it shows the team working on this project wants to rip you off instead of providing a reliable blockchain network.
An Anonymous team or a team with no experience or qualification don’t offer you anything. Be smart and learn who is behind the blockchain project. Even if they offer attractive packages, you need to do your research because the only thing that makes a business successful is the team behind it.
When you visit the official website, make sure you check the About Us Page and see the team running the ICO. If the team doesn’t name full-time workers. When you see a team, check their credentials on LinkedIn or Twitter.
Most ICOs even list their advisors, check them as well.
ICO companies list their funding and development information clearly for investors to see. If you don’t find a roadmap, this shows the company has no long-term plans. This is a serious concern. The company is only looking for an instant financial gain.
Scammers create a timeline for fake updates. If the timeline doesn’t seem authentic, leave the ICO immediately, they will do no good.