How to evaluate ICOs

With new technology come great opportunities. Also great scams and opportunities to scam people. Have you found an ICO that looks very promising? Great advisors on board? Awesome website? It still might not be worth your money. Read on…

It is very hard to establish which ICO is solid and which is a fad – according to Jason Goldberg, who I’d count as a trustworthy source, there’s a lot of under-the-counter stuff going on in the ICO marketing industry. Yep, I wrote industry – meaning people specialising on ICO marketing, promotion, selling themselves as advisors even if they have no idea about your project and more.

This means that you shouldn’t ever only base your assesment of an ICO purely on their website content or random “impartial” websites.

Read the best of the worst suggestions and offers that Simple Token creators have received to get an idea of how things work behind the curtains.  

How *not* to lose money investing in ICOs – do it

  • The ICO should make their code publicly available – *always* look for the code of their solution / technology – it should be open source – available on their website or github. If they are not showing you the code, write to them and ask for it – although already the fact that they didn’t do it shoudl be a big warning sign.
  • The business model – does it make sense, does it have future, will it sell? Would you pay for it? Do you know anyone who would need it? Can they clearly explain the process from development to profits and customer adoption?
  • Anything to show for your money? In other words – do they have a working prototype? A demo? Something you can test drive? Or just words?
  • Whitepaper sounds nice, but it’s just another form of marketing. My guess is that there’s a company out there somewhere that will write a whitepaper for you better than the president’s speech. They can wrap any kind of weak idea in golden wrapper and sell it via a shit-hot whitepaper. But it’s the idea behind it that you should review, not the styling of the whitepaper.
    • Subnote on jargon and empty buzzwords – if they use too many of them, be careful. If their business idea is solid, there’s no need for marketing buzzwords. Whare are empty buzzwords? See here or here or here – or how about a full ready-to-ICO company website in seconds? Just change the number in the URL and you’ll get a new one. Have fun :).
    • Read it and judge for yourself – is the aim of the whitepaper to explain how things work or to sell you the ICO?
  • Know the team – do they have any links to their LinkedIn profiles? What is their background on LinkedIn? Google them – are they known to the world, or Mr. No Name suddenly blockchain experts? Are they featured on many ICOs? If yes – that might be a bad thing (they sell their name to any ICO).
  • Check them out on various ICO review sites – read more than just 1 review (could be paid for):

Further good ICO checklists:

by CryptoPortfolio

by William Mougayar

by Cryptopotato.com

Good stuff? Share it!

Leave a Reply

Your email address will not be published. Required fields are marked *