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ICO and Cryptocurrency Buyer Checklist - Part 2

23 April 2018

The investment world is going through several significant changes every now and then, one of the notable ones is the growth of digital assets coinciding with the rising ICOs (Initial Coin Offering). An initial coin offering enables an individual or an entity to raise the amount of capital for a contract or project by selling the underlying cryptocurrency tokens.

Taking our last blog further, we will be discussing the next set of checklist points which you need to keep in mind while investing in any Cryptocurrency.
 

Does the Project Have a Clear and Realistic Roadmap?

Going forward, the project which is launching a token sale should have a defined roadmap which can be executed realistically with all the funds which will be raised during the sale of the tokens.

If the road ahead seems to be too ambitious and makes some unrealistic promises, chances are high that they will not be able to fulfil what they promise and the value of the token will start suffering once the trade on exchanges starts.
 

Is the Project’s Technology Viable?

Furthermore, as an investor, you need to pay heed to the viability of the project’s technology. Which blockchain will it be using and why? Is the code of the project open-source? Has the code been peer reviewed?
 

If the whitepaper of the project is unable to give a clarity about the technology the project is all set to use, it's a clear sign that the project lacks professionalism and it may turn out to be a scam later.
 

Technology is the heart of all the blockchain projects. If the hands behind the ICO are inefficient and are not able to communicate about the technology clearly which it intends to use through the whitepaper, website or any other social media channels, the project is on the path of failure.
 

Is the Code Open-Source and Has It Been Audited?

Traditionally, mostly all the disintegrated blockchain projects like Bitcoin have an open source code, which can be easily found on GitHub and can be audited by the third parties. If the startup whose token you are all set to invest in, has open-sourced its code, which is being audited by trusted community members, the credibility of the token increases.

Having said that, several blockchain projects which conduct ICO’s want to keep their code for themselves as they don’t want their competitors to get hold of their code. Hence, non-public codes can simply not be the reason to dismiss the ICO altogether. The more transparency the projects keep, however, the better it is.

Does the Project Need a Blockchain And a Token?

Apart from the team of the project, the technology used and the product, another important you should keep in mind while investing is whether the startup needs a native token and blockchain for its product, service or platform.

Due to low or negligible barriers to the entry, there is a huge number of startups which are looking for easy way to fund themselves by claiming to be implementing the blockchain technology to enhance their present product or just to start a totally new product which requires it.
 

However, if it is visible that the platform, service or the product could easily run without using blockchain or a native digital token, then it's a very clear sign that you should keep your hands of this ICO.

Next time when you consider investing in any ICO, check out the above pointers before making any investment decision. The risk in putting your money here is high, so consider your decision thoroughly and then only invest in the right cryptocurrency.

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Daljit Singh Director - Operations

At Debut, Daljit and his team of consultants are focused on working with regulators, startups and large financial services organizations to design and build Blockchain based business networks. 

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