The cryptocurrency space is precarious even though crypto-enthusiasts can form a buoyant viewpoint of the future; every investment has its own risk. There are many exciting technologies and “projects under construction” within the crypto-currency space.
Learning to sieve the dust from the blockchain space can be in fact complicated, as it can be challenging to identify who actually to trust and which projects to go all in on. There are no exact recipes to follow that can assure you a thriving investment.
However, here are some guidelines to guide your way to success:
- Team: It is a sad omen, if founders of the offering, are anonymous to the public. A great place to explore a token offering is at the “About" page of the project website. Typically, every great project has excellent reviews from the community. If the About page of the project lacks social proof, then it’s a red flag.
However, if you find an engaged and active community around a project, then the token has keen people. Also, forums and other cryptocurrency groups allows users to engage and interact with other people. While it seems quite apparent, there are many teams in the technology world and blockchain community who opt for applying solutions to problems.
Blockchain applications are liable to this problem as engineers are keen to track down questions around the protocols before considering the business value of the idea. At their core, these applications are businesses. Therefore, these projects need to have real-world business applications before you receive any return on investment.
- The Target Market: It is essential to put the offering in the context of their target market. The ICOs are subject to the rigid pressures of their target industries. The environment can inform you of the opportunities the offering faces. Is the concept ground-breaking enough to dominate?
- Risk: Many start-ups are still in the early stages and are not active yet. There is a chance for you to lose money if a project does not fly. ICOs are high-risk, high-reward investments. It's best to know how much you are willing to risk.
- Utility (Purpose of the Token): Tokens have other functions with the ecosystem. Some coins offer a decentralized file storage solution. Users can earn tokens with the platform and exchange with popular currencies such as Ether, and Bitcoin. Bear in mind, that not every commodity can be tokenized and traded digitally like Bitcoin.
- Site design: The website represents a company’s digital infrastructure. The images, ease of navigation, the quality of the website plays a role in the company’s success.
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