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The ICO market has warmed up for just under a year, but has turned into a new wave of technology. The amount of wealth created is insane and it can be difficult to keep up with the rate of change that is occurring in the industry. It's like the tech boom of the early 2000s again, and this is your chance to coin a lot of money.
Search for ICO
If you are looking to put some money into an ICO, the first step is to find the right one for you. There are many websites dedicated to the different ICOs that are currently underway or scheduled to be soon, but CoinSchedule it's my favorite right now. You can discover new ICOs here and then start the hard part.
You need to do your due diligence to see if ICO is right for you. You can consult the forums and Reddit, but gaining knowledge of the fundamentals of the company (team, product, market size) is the only way to avoid losing all your money in the long run.
Telegram is a great chat platform to connect with others, and there are many expert people who are willing to share tons of information on cryptocurrencies and ICO, so I suggest you take a look at this tool.
The Due Dilligence process
There is some key information that needs to be applied in the investment process. Firstly, the cryptocurrency community is segmented in several cases of use and there may be only one successful project for each use case. So, before investing in a particular project, it is time to do an analysis of the competitive landscape. You do not want to bet against yourself by putting money into multiple projects in the same industry, so you're likely to choose only the project you think is most likely to succeed.
To learn more about the project, most companies have Telegram channels in which you can observe the community and get an idea of how developers are and where the project is heading. In general, Telegram is an invaluable research tool.
Finally, we recommend that you review the amount of supply that the company is keeping for itself. You want the founders to still have "skin in the game", but you do not want them to have such a high percentage of coins in their hands that they can make a profit and then start reducing the risk by selling their holdings.
Going through with the purchase
Assuming that you have finally selected a currency that you would like to buy, it is time to perform it. Most coins are supported by Ethereum, so you'll have to buy a little bit of Ether and move it to a wallet that will support a variety of coins. Currently, I use MyEtherWallet.
The purchase of the currency is actually much simpler than you think. All you have to do is get the public address of the ICO and send them the amount of Ether you want to invest. They will send you tokens when ICO closes and you have successfully participated in your first ICO.
Know Your Client (KYC) rules are used to keep track of your identity and to follow the security regulations of your jurisdiction. At the beginning it was rare for a company to follow them, but now that regulators are falling apart, it is likely that you have to provide all your identification information in order to participate.
If you want to sell your tokens at any time, you can use an exchange like Binance that allows trading a wide variety of tokens.
Watch for Pump n & # 39; Dumps
As long as there were equity investments, there were no landfill schemes for pumps. Definitely "shitcoin", there are numerous projects that ICO without a product or even a hope to develop them. The lack of regulations makes all this possible, and that is exactly why you need to do your due diligence.
A criticism often pointed out by Ico is that nobody in the team has yet built something. It's the feeling of a group of people who sees an opportunity and jumps over it because there is a possibility of high profits rather than being able to contribute a lot to space. So, while looking for "shitcoin", you should be particularly aware of the projects that talk about the amount of money they have collected, rather than what they have built.
Understanding the risk
The first thing everyone should know about ICOs is that they are still unregulated. Where IPOs receive intense regulatory oversight, ICOs are mostly self-regulated at the moment. Considering the fact that most of these companies come from people with little or no experience, it is imperative that you pay attention to where you invest your money.
Yes, it's a good thing that you can now make big asymmetric bets that were previously regulated out of your reach, but research is always the answer. For example, if you have a token for a company that does not have a use case in addition to financing the company, it will not serve as a store of value. With the implementation of the lightning network, the cross-chain atomic swaps will eliminate the need to keep these tokens and their value will tend to zero. Understanding future changes like this is the key to a long-term investment career.
Featured image courtesy of Shutterstock.
