Many people that intend to start a business resort to ICO in order to raise enough capital because it represents a simple and efficient method. The whole process is practically an exchange between crypto-coins and crypto-currencies. However, investors cannot overlook the controversy related to this subject and they should take into consideration several essential aspects before they make a final decision. Apart from gathering enough details regarding the project, investors must be aware of possible frauds and take the adequate precautions that could guarantee their safety. Obviously, we cannot doubt the popularity of ICO investments, especially in the last year but as an investor, you have to advance with care into the field.
What you should know about ICO
Before you decide to invest in ICO, you should pay attention to certain aspects, namely the team composition, the token, the code, the press, the audit and other legal aspects. Regarding the team, you have to check the background of each member in order to assess its knowledge and level of experience. Do a little research about their past and find out the previous projects they worked on and the results. The token is probably one of the most important aspects you have to take into account because it has to ensure the return on your investment. The issuance and distribution of tokens is also important so make sure that you are able to answer the questions when, why and how. First, the code must be public in order to enable a good communication and trustworthy relationship between the community members. Secondly, the quality of the code says a lot about the developer. The press could prove to be a reliable ally because if you can find extensive information available about the project and the atmosphere in the community, it means that it represents their top concern and this is a good sign. The audit represents the last aspect that could help you determine if a great opportunity lies ahead of you. If you are familiar with the third party that performs the audit of the code and the balances, it means that you can proceed with the investment.
Be aware of frauds and ensure your safety
Apart from gathering the necessary details about ICO Investments, you have to be precautious and pay great attention to frauds because every time a successful method of making money appears, fraudsters are just around the corner. The first step is to make sure that the project and the members of the community provide full transparency regarding their names, locations and plans. The usage of an escrow wallet is crucial because it allows more than one person to access the funds, one of those persons being a neutral third party. As we mentioned above, the legal aspect matters so get informed about the existence of terms and conditions between contributors and developers. Speaking about developers, they should be able to address the purpose of the project briefly and clearly. By keeping in mind these steps, you will ensure your safety as a potential investor.