Crypto Investing - Due Diligence
What influences you to invest in a particular Crowdsale?
Is it because your friend told you it is a good one?
Is it because you have seen people talk about it in some chat group?
Or is it because you saw it listed on one of the Bitcoin/Cryptocurrency news media sites?
For whatever reason you decided to invest: Are you completely confident your investment is solid?
Here are a few things to consider:
- Is there a working prototype?
- Are any of the team members qualified for the task at hand?
- Whats the total coin supply?
- What % of coins are allocated for the Crowdsale/Team etc?
- How long after the crowd sale will you receive your tokens?
- Are all there social media links active and legit?
- Checked there Github for regular updates?
- Visited the Bitcointalk forum thread to read all the comments?
- Joined the Slack and Telegram channels?
Is there a working prototype?
Why is this important?. This shows the project has substance and has a base to work with. It shows that more than likely they are a team that is serious and wanted to show you they can produce before you invest. I also like to test out there prototype to get a feel for the project, that's if one is available for public use. If there is a beta test group and I have time to get in before the ICO and test then I will for peace of mind.
Are any of the team members qualified for the task at hand?
This is part of your research you must really dive deep into. The team members and advisors are probably the most important part you should take into consideration before investing.
I highly recommend checking all their LinkedIn profiles and confirming they are actually attached to the project because there are many scams out there. Also when researching their profile see if what they hope to achieve lines up with their actual qualifications, I call it the "crossover". where a developer's history has the tools from past projects to complete the current one.
Whats the total coin supply?
This is very important because the larger the supply the smaller the demand (in theory) however some coins still do well with a larger supply, but they don't yield massive profits fast like a project with a smaller supply. I like projects with anywhere from 20-200 million. Again though it can depend on the project, so always take that into consideration.
What % of coins are allocated for the Crowdsale/Team etc?
This can be important because it shows the commitment to their community and future amounts that are needed to make the project succeed.
How long after the crowd sale will you receive your tokens?
If you're looking at turning over profits faster than participating in a crowd-sale today and receiving your tokens in 4-8 weeks can lose potential profits. Many projects provide the tokens within a few days of their crowd sale.
Are all there social media links active and legit?
It is amazing how many scammers create totally legit looking websites with some "AllStar" team members displayed that have zero knowledge or any affiliation to the project. Make sure to check the sites Twitter feed and also the Bitcointalk forum and any other forms of social media you can find.
Checked there Github for regular updates?
The Github will give you an indication if there is active development on the project. It is vital to make sure the project is active and has regular updates. If the project is claiming they have a prototype, be sure to check Github and see the timeframe the code has been there for. Also if possible download and test the prototype.
Visited the Bitcointalk forum thread to read all the comments?
There is a ton of FUD and BS that goes on in this forum, however, there is also base information you can find if you read through all the pages. I really get a feel for a project when I see how the team members respond to the questions and the FUD. You will get to see if they are mature enough and knowledgeable in regards to the project. Just look for anything that stands out in the behavior patterns from the team responses.
Joined the Slack and Telegram channels?
This is research religion 101, you must join the communities in order to gather the info you need to evaluate the project. I will sit back and watch and read a slack community for sometimes an hour just to get a feel for whats going on and learn about the project and the team more in depth. Don't ever miss this step out in your research pipeline it is a crucial step.
Website
Slack invite
Github
Twitter Follow for updates and news
FaceBook Comment for connect
Team
If you don't who any of the members are just look for signs in their LinkedIn profiles that they have worked for major companies in the past or have higher education etc. Also look for actual experience in Blockchain development. You can clearly see the team below have all bases covered, but still be sure to check out their links
Advisors
If I am unsure of a particular Advisor I will simply google them and see if they are legit and have any connection to the project. Below is a prime example of top notch advisors. Coinbase is very well known so anyone that has worked there should have a good rep.
Regardless of who is actually displayed as team and advisors always remember to actually check out there LinkedIn profiles to ensure association to the project.
Below you can see in Alex Xu's Linkedin profile he has multiple mentions of 0x
Slack and Telegram channels
I can't stress how important it is to be in the slack and telegram channels as much as possible leading up to the ICO, during the ICO and the time it takes until you have your tokens. This space is very volatile and new so things can change in a split second. Keep informed so if anything needs to be changed it can be.
SCAMMER WARNING!!
Ok so now you have done your Due Diligence and you are confident in the project the next step is to get ready for the ICO.
BE AWARE there has been many scammers taking millions of dollars from investors that aren't keeping their eye on the ball.
I made this post yesterday about how the ICO for Enigma was compromised while I was present in the slack channel. Many users lost thousands of dollars because they didn't pay attention to what was actually going on.
The scammers will send out fake emails to the registered users and pretend the ICO has started and provided ETH or BTC addresses for you to invest in.
Always cross-reference any information you receive with whats going on in the Slack/Telegram channels. Never click on a link that is suspicious or has a sudden change in the dates of when to invest. Always double check it is vital to your investments.
Tomorrow I will post the current and upcoming ICO'S I am invested in :)
