8 signs you are investing in a good ICO — AutoBlock

The Auto Block
Sep 8, 2018 · 3 min read

Similar to an IPO (initial public offering) where companies sell shares to investors to help them grow, initial coin offering works digitally in exchange for different alt-currencies like bitcoin, Ethereum, etc. The working of an ICO follows the basic principle of finance and provides a Return on Investment also known as crowd sales.

An ICO caters to digital companies who need a larger influx of funds for development of new cryptocurrencies as opposed to traditional entities. These are extremely beneficial as they provide investors the opportunity of achieving maximum profits.

An article stated that alt-currencies exchanged in an ICO generated a return of 12.8 times of its original value. This growing trend of digital exchange has led to the birth of many scams due to which investors especially the new market entrants hesitate with their investment decisions.

Below are a few basics on how to identify ICOs those are worth the risk.

  • Team structure
    To be sure of the authenticity of a potential project, one should analyze its team members. The first thing any scammer does is to invent a fake profile. To identify one, the client should determine if the account activity is in alignment with the fan following of the individual. Authentic team members generally have personal information displayed publicly on the company website and are easily accessible.
  • Transparency & Visibility

Companies offering an ICO always have a whitepaper. According to Medium Corporation, it’s the base of the project that states the entire process of the investment beginning with the price of the cryptocurrency and ending at the target return. Autoblock, a platform that has transformed the automobile industry uses this concept creatively and effectively helps car dealers to carry out quicker transactions ensuring transparent sales and purchases.

  • Problem & Solution
    According to Matthew Warner, there should be a proper representation of the problem and its solution to convince a buyer to invest in the token. If the company rightly states a problem that exists worldwide, it will compare its aims and results with performances of other companies. This shows that it’s actually striving to work effectively which is a good sign.
  • Token Valuation
    Since the crowd sales process is dependent on the exchange of tokens; reliable companies generally make the progress of the token sale easily accessible to potential investors. If a company displays such visibility, the chances of a good investment are pretty high!
  • The online forum
    According to cryptopotato, the online thread of Bitcointalk.org is the best way to search for reliable investments. If clients notice developers dodging queries, chances of a red flag are high and its best to avoid the particular exchange.
  • Proof of concept

Genuine developers are able to provide proof of their past cases. This reveals that they know their line of work. If they only offer an idea as compared to other ventures, that ICO might be significantly risky.

  • Limited funding
    Bancor was a project that raised $150 million in a few hours, yet investors failed to receive any gains. This event highlights the importance of a cap on the concerned ICO for the amount of funding, otherwise lowering demand and hindering future exchanges.
  • Code quality
    A good indicator of a reliable developer is to analyze their code by looking at its consistency. If a code is more than 50 lines, it definitely raises a question on the viability of the developer. Hence, the more concise, the better it is!

The post investing in a good ICO originally published at www.theautoblock.com on September 8, 2018.

The Auto Block

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Motor Vehicle Company

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