Initial Coin Offering (ICO) is a new form of investment touted as the next big thing, promising incredible returns quicker than the time it takes to build, develop and market a new idea. Having knowledge, sophistication, skills and investment vehicle are not just enough to conclude success in engaging to a cryptocurrency investment. In this kind of investment one of main premises is the initial coin offering(ICO) where an investor buys into cryptocurrency at a reduced rate and see the value of tokens rise via exchanges. Keep in mind that when purchasing tokens or coins through an ICO, you are investing in the potential future value of the project at a discount.
For someone with no technical background it could be too difficult to understand the concept beyond the basics. Here at Camuso CPA PLLC, we provide consultations and services for better understanding and ease in doing business. Initial Coin Offering (ICO) is a new business paradigm supported by blockchain technology.
1.Read the terms of the ICO (initial coin offering)
Often you can find the announcement on Bitcoin talk, and conveniently coinmarketcap.com links you there for most coins. How many coins were generated, will be generated, and are currently in existence? What is the current price? What’s the market cap and any competition?
2. Read the White Paper
The white paper is essentially an informative document issued by the company to promote the ICO and contains useful information about the startup, their value proposition, business model, financial data, and specifics about their coin offering as well as information about the management team and board of directors.
Provides clarity and transparency into company’s future achievement of goals. Assessing roadmap will give you an idea of the company performance. Is the road map aggressive or is it reasonable to achieve its goals? Has the company already started the project and have a working prototype? Is the company planning to use the funds from the ICO to build the product?
Does the team have a medium account? What are the posts like? Research them, do they have any press? What’s the press like? It is important to understand how the team is promoting the ICO. Is it marketed through the various ICO websites and ads or through word of mouth and blockchain forums? Look out for news and articles on the media covering ICOs – positive news and views add to the credibility of the coin. Other social media postings like Facebook, Twitter and Instagram accounts etc. – how many followers does the coin have, what is the activity on their social media and have they been active recently?
5.Founders and Board of Directors
One of the most important factors to consider is the people behind the project and their abilities to execute the idea. Look up the developers and executive roles on LinkedIn, GitHub, Reddit, etc. If you have trouble finding information about the founders and management team this may be a red flag.
As a reminder, you alone are solely responsible for determining whether any investment, asset or strategy, or any other product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation.
It may be challenging to find reliable and trustworthy information about blockchain and to verify source of information but by due diligence it may help you decide which one to invest into. With so many to choose from and many inevitably losing their initial value and causing huge losses to investors, people are advised to do their own research before buying in to an ICO.
Here at Camuso CPA PLLC, we do have the ability to offer services to our clients. If you are interested to know more about this investment and how this might benefit your business, please don’t hesitate to give us a call today. One of our friendly and knowledgeable representatives will be happy to answer any questions you have.