Due diligence is essential for any investor.

Without it, you’re blindly throwing money at the wall, hoping something sticks. This is most notably true with initial coin offerings (ICO).

If you don’t know what it is, or who’s involved, your risk increases

Understanding who is on the development and management team is one of the most important steps when investing.

It doesn’t matter how attractive the coin or offering may seem, don’t proceed without research.

Failure to do so can lead to disaster and potential scam

For example, it’s often a red flag if the team behind it does not have any named full-time developers.  And, if at any time, a team is unwilling to identify itself, be very cautious about investing at all.

ICOs will also list advisory people on their sites, too.  Be sure to verify they are legitimate

“An ICO’s website should feature details about the team that created the entire concept. A hard-working team will proudly present the members and showcase their abilities or contributions to the project. If you have to actually research and Google about the team behind it as there is no information on the website, that’s a big red flag,” says Fast Invest.

Another crucial source of information for all ICOs is the whitepaper — the document that outlines the mission, technical details, team and other crucial details behind the venture. While your average investor may not have the technical background necessary to understand every inch of the whitepaper, most legitimate projects to offer key points in an outline.

Investors must also be sure the ICO has a list of their funding and development goals in a clear timeline.  If this information is not readily available, it could be an indication the team does not have a clear long-term plan for the project, and may only be motivated by short-term riches.

By doing such due diligence, you begin to uncover with crypto coins may be the most valuable.

 

 

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