What is ICO? A COMPLETE Guide To ICO Investment From AZ
What is ICO? How much capital is required to invest in ICO? What are the risks, opportunities and investment strategies of ICO coin? Learn all about ICOs right here!
Within the framework of this article, I will try to synthesize as much information as possible about ICO investment that I think anyone who is planning to participate should know.
If you are a beginner with ICO and have not participated in an ICO deal, I encourage you to read this article from beginning to end, slowly to understand.
To remember important information, you should prepare a notebook and a pen to jot down ideas that you feel interested in. After reading the article, take 5 minutes to go through your notes. This way, you will remember the main ideas better and forget them longer.
If you are someone who has been investing for a while, you must have had certain experiences of your own.
Therefore, to save time, I encourage you to skim through the table of contents of the article first, then depending on which content interests you, click on that content to read the correct information. you need, it will be very fast and efficient.
And if you are already a person with a lot of experience in ICO investment, have experienced many projects, have won a lot of good bets and also many times to the top. Honestly, I don't think this article will be of much help to you.
However, I hope you will take the time to read through this article, not to learn, of course, but to teach, to give me suggestions for better points, to supplement my bloody experiences. more, to share for all of you beginners have more perspectives on ico investment.
And it will be even better if after this article, you will be able to answer questions like:
- Is ICO investment as good as I thought?
- Should I invest?
- If you invest, how should you invest?
- Along with many other questions related to ICO investment, bitcoin investment...
Let's get started!
Chapter 1: What is ICO Investment?
What is ICO?
ICO (Initial Coin Offering) is a form of crowdfunding , in which investors will give the project a sum of money, in return, the project will send back to investors. a corresponding amount of coins at the initially pre-determined exchange rate.
Before the ICO, the project will need to clearly provide information such as the total amount of money to be raised, the total amount of coins issued, the coin exchange rate, etc., and other parameters to investors. understand, thereby making a decision whether to invest or not.
Why would investors want to buy an ICO?
No one wants to invest their money and lose money. The reason people participate in the ICO stage is simply because they see the potential of the project.
They predict the coin price will increase after being listed on the exchange. And so, they decide to invest with the expectation that the coin will bring them a profit.
Besides, ICO is also a form of investment that gives individuals great opportunities.
If before, only angel investors or venture capital funds with huge amounts of money in hand could invest in startup projects at the early stage, Until now, the ICO has allowed all individual investors, with a small capital of only about $ 100, can participate.
Investment deals at an infancy like this will of course carry high risks. However, if you are lucky enough to find the next Facebook, Amazon, Google...
Who is ICO investment not for?
Investing in bitcoin in general and ICO in particular is not an investment for everyone . There are people who are suitable and there are people who are not.
Before getting into the story of who ICO investment is for, let's talk about who is not suitable for ICO investment.
1. People who have no faith in Bitcoin and the crypto market
As I said above, investment is the same, first of all, you need to have faith in the market first, then believe that you can make money from this market. Without trust, you will not be comfortable in your investment decisions , so the investment will not work.
Bitcoin, ICO is not the only form of investment, if you feel afraid or uncomfortable when investing in cryptocurrencies, you still have many other options such as stocks, real estate or gold.
2. People who want to eat well and wear durable, don't dare to take risks
I just want to clarify the nature of the ICO investment game before you decide to participate. But it's not to say that safe investing is not good. Who invests without wanting to be safe? It's just that in ICO investment, we trade high risk for high return.
For cryptocurrency investing, even holding bitcoins or mining coins is risky.
- Bitcoin is currently the largest cryptocurrency by market capitalization according to Coinmarketcap , but those who bought bitcoin at $60k are also very scared when the price is only hovering around $49k.
- Or more simply, when it comes to mining, many people think that investing in a mining pool for a few years, later when they can't dig anymore, they will still recover their capital. However, it is not easy to eat. If there is a fire or electricity price increases, the difficulty of mining increases, mining will not be as profitable as before.
Investing in ICO is a risky game , bringing strong feelings to players , so if you are a safe person, you will need to consider carefully before starting or can choose a different investment field. when will be better.
3. The impatient person
Money does not disappear automatically, it just moves from the pocket of the impatient to the pocket of the patient.
Going from a business idea to a successful business is a long way, we cannot expect to build a Facebook or Apple as big as it is today overnight.
Success is a process, not a day or two. Practice patience if you want to win in this market.
4. Lazy people, unwilling to learn and cultivate knowledge
The cryptocurrency market is changing at breakneck speed. A day full of new news and updates. Just think, more than 2000+ projects, if every day a project only updates one new news, it's already 2000+ news. A huge amount of information.
To adapt to the market's record-breaking super-fast changes, we must always be in the mood to learn and update our knowledge continuously so as not to be outdated.
Thus, if you are a person:
- Believing in the future of blockchain and cryptocurrency,
- Dare to accept the risk.
- Have enough patience.
- Eager to learn and have a bit of excess capital.
Then investing in ICO could be a good choice for you. Just remember, once you choose it, fight hard like warriors, fight to win.
How much money does ICO investment need?
This is probably the most asked question by new entrants to the market.
In general, current ICO projects have different pricing policies. However, in general, I see that most of them require you to invest at least 0.1ETH .
Some projects they will not limit the maximum amount can be purchased. But with projects that are too many investors want to buy, to ensure that the most investors will buy the coin, they will limit the maximum amount you can buy.
Example: During the ICO of Pundi X, each investor can only buy up to 5 ETH. If someone intentionally sends more than 5 ETH, the project will consider that person not following the policy, and will not sell to that person.
For cases like Pundi X, if you want to buy more, you can participate in buying in the pre-sale, also known as wholesale.
Wholesale, you will have to buy in bulk, usually at least 5 ETH or more. And buying wholesale, of course, the price will be cheaper than when you buy retail, but in return the coin you buy will be locked from being traded for a certain period of time, usually 6 months to 1 year.
The reason is because it is common for wholesale buyers to hold a very large amount, so after the ICO is done on the floor, these people discharge simultaneously, the value of that coin will be catastrophically reduced.
Therefore, buying a lot in pre-sale also has its own advantages and disadvantages, depending on capital and personality, each person makes a decision on how much to buy, in which round, pre-sale or public sale.
In addition, in the process of developing the Coin98 community, I also met a lot of friends who love to invest but don't have much money . If you also fall into this category, check out the bounty & airdrop programs.
These are campaigns to promote the name of the ICO project in the beginning to make it known to many people.
You will perform a certain behavior to help them promote, for example, share project information on facebook, twitter or telegram for example, in return they will pay you a certain amount of coins.
After the ICO ends, the coins are returned to your wallet and you can sell these coins to get some initial capital. Once you have capital, you use it to invest in potential projects to multiply that money, simple as that.
In this area, your main assets lie in your knowledge, skills and investment methods .
- If you are good, you can turn 0.1 ETH into 100ETH.
- If you are not good, 100ETH can also return to 0.1ETH.
It doesn't matter how much you score with the number, what matters is how many times you multiply that number over a period of time.
Be good, and the money will chase you. Even if you don't have any money in hand, you can still start (in the way I have shared), so why not try.
Right thinking about ICO investment
By now, you must have grasped the essence of ICO, which is just a form of crowdfunding to develop an idea.
We give our money to that project because we believe in the idea, and believe in the ability of the dev team to be able to develop it to success. When successful, we can use the product/service of that project. Also benefit from the coin's price increase.
The key here is that we have to find a good project that has every reason to be successful.
Good idea, big market in demand, capable dev team, ... in general, natural time, location, and human harmony must be enough. It might surprise you that over 2000+ projects out there are only a very small number that fall into this category.
Why are all the remaining projects still being traded so much every day?
Most people are looking at this as a game that brings big profits. They are often interested in the x2 x3, even x10 orders in 1 day, but few have time to find out what the project they are investing in.
There's nothing wrong with a passion for profit. The main thing here is just that we do not let profits blind us to our sanity in making investment decisions.
There are still people who work hard to learn about coins to know what they are investing in, whether the project has potential, what basis to expect an increase in price,... But honestly, This number is not much.
This reminds me of the dotcom bubble era . At that time, hundreds of thousands of projects, dot com companies were born because making money was too easy, but then when the bubble passed, what were we left with?
Are those companies still alive? Or are there only companies that really bring value to society and the community like Amazon, Ebay, Alibaba, Apple...?
Looking back at history, those days, if any investor recognized a gold mine from Amazon, Ebay, Alibaba, Google or Apple and invested in the shares of these companies, now think about it, they made a profit. know how much money?
It is because of the value they bring to the community, the real value created that keeps these companies standing even when the bubble bursts.
Is Bitcoin a Bubble?
This is still a controversial topic. But I believe that by selecting projects that bring real value, with or without bubbles, these projects will still exist and develop sustainably.
By finding and investing in these projects, we will not only protect our capital more safely , but also be able to profit a lot from its development .
Of course, in the conversations at the coffee shop, or the gossip on the table, you are still hearing about the opportunities to make money from junk coin trading or the growing market that puts money in any coin that makes you want to jump in. right.
Yes, in the short term, those forms can still make money.
BUT .... ( this "but" is very large )
These methods carry great risks when the market corrects, purging weak projects to make room for really good ones.
Most recently, you can see the event that Bitrex removed 82 coins on their exchange due to the weak trading volume and the technical factors of those projects often having errors, especially transferring coins to receive coins. .
In the short term, any form can make money, we just don't know how long this period will last.
In the long term, I think that sooner or later the market will have a big purge and gradually eliminate junk coins. The competition between projects will be increasingly fierce, leading to the projects that are not capable enough to be gradually eliminated. Just sooner or later.
That's why I encourage all of you to find a good project to invest in it. Don't be greedy for a short-term gain that misses the opportunity to make more money in the long-term.
Before putting money down for a project, always remember the number one investment principle of Warren Buffett:
"Never lose your money" (never lose money).
This mantra can help you a lot before making an investment decision!
Chapter 2: Risks and Opportunities of ICO Investment
Potential and opportunities are probably many of you have heard, but there is one topic that I see few people mention, which is the potential risks from ICO investment.
So when starting this article, I want to mention the issue of risk first.
When you understand both the risks and the opportunities, at least your investment expectations will be more realistic, not being overly driven by greed, or simply knowing what dangers are lurking ahead. to have a plan to deal with it in a timely manner.
That's it, when investing if you lose, it's not too sad because it's determined that you can accept it. Strongly get up and move on. The risk is also foreseen, so it does not affect the total investment assets.
Here are some risks you need to know when investing in Bitcoin in general or investing in ICOs in particular:
This is probably the biggest headache for both the project and the investor. Legal risks can lead to breaking the law like playing, so we should learn about this carefully before investing.
In Vietnam, currently, as far as I know, it is not allowed to use electronic money (Bitcoin & other coins) with monetary function. That means if you use BTC, ETH or any other coin for the payment feature, it is against the law and may be subject to criminal prosecution.
However, if you consider cryptocurrency as a commodity (commodity) and buy it for the purpose of speculative hoarding waiting for the price to increase, it is still possible, it's okay.
From January 1, 2018, Vietnam does not accept the use of bitcoin as well as other cryptocurrencies for payment purposes. Any misbehavior is subject to criminal prosecution.
For Vietnamese expatriates currently living in other countries, I encourage you to study the policies of that country carefully before starting to invest to avoid trouble later.
2. No binding papers
Unlike securities, when you buy shares, that property is yours and is protected by law, when you buy ICO, that coin will still be returned to your wallet normally but it will not be protected by law. the law. Your transaction of capital contribution, coin purchase will not be documented by any documents.
In other words, after successfully raising capital, if the development team holds that money and runs away, you can't do anything.
Even if they don't take your money, other dangers still exist such as the dev team misusing the money, saying one thing and doing another, or worse, saying and not doing.
To avoid this, when evaluating projects, we will need to carefully check the information about the company, the founding team to know that this is a real person, reputable & fully qualified. ability to do what they say.
Humans are capable of creating many miracles. A line of code, a presentation, a product... all handshakes from people.
Our grandparents have a saying "choose the face to send gold" which is very true, not wrong!
3. Sharks manipulate prices
Shark here refers to individuals or organizations holding a large enough amount of coins that can manipulate the price of a certain coin .
Usually, coins with smaller trading volume are easier to manipulate. A coin with a daily trading volume of about 100 million VND, as long as you own at least 100 million, you can make the price of that coin.
Of course, it also depends on the technique of making prices, but holding money in hand without knowing how to make prices does not work, sometimes even if you don't win, you still lose.
To avoid cases like this, you should choose to invest in coins with a slightly large trading volume, about 10 million dollars or more, the possibility of price manipulation will be more difficult.
It is more difficult to say but not impossible, just to make the price at that volume, the shark will need a lot of money, so the probability of being inflated will be lower.
The larger the volume, the less likely it is to be manipulated by sharks.
4. Security Risk
If you regularly read newspapers that update news every day, it's probably no stranger to news like this person being hacked and losing a lot of money....
According to my observations, most of the reasons for being hacked are mainly from the user side.
So is the user wrong? No, the user is not wrong. They just don't know how to protect their property.
IMPORTANT: To keep your account secure, just remember the following tips:
NEVER share your Private Key with others.
With just a private key, anyone can log into your wallet and transfer coins.
If you also use internet banking to transfer money, giving people your private key is the same as sharing your username, password and OTP code to transfer money.
Just get the private key, anyone can access and manipulate all the features located in the wallet without a hitch.
Always enable 2-step security (2FA)
This will help you limit the risk to your assets, even in the worst case, your username and password are revealed to a certain platform that is storing your assets. Now you can use popular 2FA apps like Google Authenticator or Authy.
Always double check the website address you want to log in
For the websites you use often, bookmark the link in your browser. Just log in faster, and do not encounter cases of entering the wrong fake website.
Example of fake website:
Original Domain: Binance.com => Fake: Binnance.com (add 1 middle n)
Original domain: MyEtherWallet.com => MyEtheWallet.com (remove 1 r in the middle)
These fake websites were born with the sole purpose of getting your important information such as private key, username, password, ... so that only with the information provided, the person standing After these fake websites can log into your wallet and transfer your coins.
Usually these fake websites will be built almost 99% like the real website, only different for each domain.
Therefore, to protect yourself, bookmark the necessary addresses.
Always log out of your account after using it
Do you know why? Because when you browse the web, all your behavior, browsing history will be saved in a so-called cookie. Compared to stealing information from fake websites, it is much easier to get user cookies.
If you don't log out after browsing, your login session will still be stored in a cookie, which crooks can use your cookie to log into your account.
And finally, give up the habit of saving passwords on web browsers for automatic login. If you are a person who has a habit of saving your username and password on the browser, I recommend using the lastpass or 1password extension .
These are plugins that allow you to store usernames and passwords in a way that is much more secure than if you save them directly in the browser.
Knowing that ICO investment is risky but why do so many people still want to dive in?
Those of you who have ever participated in the market from mid-October to early December 2017 will know. At that time, the cryptocurrency market grew very strongly, anyone at this time also multiplied 5 times 10 or at least multiplied by 2. Just imagine after 1 night of waking up, your account multiplied by 2, multiplied by 3. try asking someone who is not greedy.
- The person who invests 1000$ overnight becomes 2000$.
- Whoever has stronger capital puts in $5000, the next day it becomes $10,000.
- There are many people who even invest in billions of silver the next day, take out 2-3 billion.
Therefore, everyone wants to participate to make a little profit for themselves. In this market, after all, we trade high risks for extremely high returns.
Talking about risk, any profession or industry has risks, not only Bitcoin, cryptocurrency, and ICO investments. So it's very difficult to find something to do or invest in without risk. Risks always exist, it is important that we learn to grow ourselves bigger to be able to manage those risks better.
That is also the reason why in trading coins, people often have the concept of Stop Loss , commonly said to be cutting losses. That is, if you have to manage and discipline to do so, the probability of you losing will be lower. It is also a form of risk control.
As for ICO investment, we can manage risks by choosing a good project to play with, choosing a trusted dev team to invest in .
- When investing, there is a reasonable capital allocation strategy, that will limit the risk much.
- Never test the depth of a river with both feet. Never put all eggs in one basket.
There are still many risks and pitfalls, but the opportunities and potential to make money from this market are still huge. If we are determined, passionate, constantly learning, developing ourselves to become a winner in this market, we can make a lot of money.
To get that day, the most important thing you need is FAITH. You do not hear wrong, that is the belief. Why?
Because when everything is against you like in a long-term downtrend market, when the bitcoin rate plummets, if there is not enough confidence, your stance will be shaky and you will most likely cut your own losses at the price. bottom.
Only faith that the market will eventually bounce back, faith in the dev team, faith in the project will get you through when the market enters stormy days.
So before you make a decision to invest in this area, ask yourself if you are really believing and succeeding in this market? Do I believe in the success of Bitcoin?
If yes then invest, if not, find another investment that you truly believe in. You will feel a lot more comfortable and secure with your investment, especially when the market is tough.
If you have invested, you must believe, if you do not believe, do not invest.
Believe it or not, when the market goes down is when we should be greedy, not afraid . Once you believe it, you will no longer be wondering whether you should invest in cryptocurrencies, but the question then will be how can I win in this market.
Believing and disbelieving look so simple, but creating 2 different types of mood when entering the market, leading to different results.
People who don't believe in what they do will often give up, while those who are clear in their mind about what they do always know what they are doing and what it takes to succeed.
And then one day, it is the perseverance and hard work of not giving up for a long time that will bring them the success they desire.
The cryptocurrency market still has a lot of potential , it's important that you believe and fight with it or not.
Chapter 3: Evaluation of ICO projects
How to know which project is preparing for ICO?
There are many channels of information that can help you keep up to date with which projects are preparing for an ICO, here are some resources that I use regularly:
This is the website I often use to view information about ICO projects: http://icodrops.com
Friendly interface, simple, easy to use are the things that I like about ICO Drops.
When accessing the website, on the homepage you will see 3 columns displayed including:
The list of ICOs displayed in this column are projects that have been and are in the ICO process.
If you feel good, you can register to buy ICO right away without having to wait.
List of ICOs that will raise capital in the near future. Each project is shown the expected ICO sale date.
So after the evaluation is complete, if you think it's okay, you can wait until the day they open for sale to start buying.
List of ICOs that have completed fundraising campaigns. For these projects, if you do not participate in the purchase at the time they open the ICO, you only have one way to wait for the exchange to buy.
It must be said that the interface of ICO Holder is very intuitive and beautiful. What I like most about this website is that they have a very nice social stats update.
Through their graph we can see how the community development of these projects is, is it good or not.
In addition to the 2 websites above, there are many other websites with the same features such as ICO Watchlist , ICO Alert , CoinSchedule...but maybe I will just stop at introducing you to the 2 websites above.
Knowing too many websites doesn't do anything because in fact we usually only use 1-2 websites as the main thing.
Simple but effective is better.
ICO project evaluation guide
A successful project is a combination of many factors. Soon I will try to give the characteristics of a good project based on my experience of reviewing many ICO projects.
Of course, in order to succeed, sometimes you need luck, heaven, and location.
But at least, if a project satisfies all of the following criteria, we can at least predict two things:
- Firstly, the possibility of this project's scam will be extremely low.
- Secondly, this project can go for a long time without being interrupted halfway.
Reviewing all of these parameters will take your time, but it is well worth your time to learn.
Our capital fund, no matter how much, is limited, so the key to crypto investing is not trying to invest in a lot of projects, but how to choose the right project to invest and that project to bring back. Highest return, lowest risk.
Here are 9 criteria that I often use when analyzing an ICO project:
- Business Ideas: Business Ideas.
- Team: The development team.
- Advisor: Expert advisor.
- Strategic partner: Strategic partner.
- Product: Product.
- Roadmap: Development roadmap.
- Budget Allocation: Allocate the budget.
- Community: Community.
Business Idea: Business Ideas
From a technical perspective, when reading through the idea of an ICO project, the first thing I would do is categorize it into groups.
Usually I will divide it into 3 main groups:
This is a group that develops their own blockchain and will allow projects to develop applications on that blockchain.
This group has typical representatives such as Ethereum, NEO, QTUM, ADA, NEM...
With projects in this group, we will almost have to evaluate from a technology perspective.
Tech projects that are behind, if they want to win, need to prove their superiority over existing ones.
Take Ethereum as an example, when the number of projects running on the Ethereum blockchain is increasing, resulting in a slower transaction speed, then later projects like Cardano (ADA) or NEO (NEO) will compete. compete with superior transaction speeds.
That's how the late projects can beat the predecessors.
This is a group dedicated to developing the optimal protocol for a specific purpose. To be faster, applications can use these protocols to develop their applications instead of rebuilding from scratch.
The names that can be mentioned in this group are Bee Token (BEE), Dock.io (DOCK), Loopring (LRC), 0x (ZRC)...
While the platform team almost only analyzes a lot based on technology factors, with the protocol group, a good idea would be the convergence of 3 factors including technology, industry/field knowledge and ecosystem. .
The ecosystem is classified as one of three factors here because when the projects are not too different from each other, the ecosystem strength of the larger project will be able to capture market share faster.
This is a group of applications developed on the blockchain platform and available protocols to solve a specific problem of society.
Most of the projects you can name are usually in this group such as Pundi X (NPXS), Substratum (SUB), WABI (WABI), Quanstamp (QSP)...
As I said, Dapps are almost focused on solving business problems, so we will need to pay attention to the following questions:
- Does this problem exist?
- Is the solution of the dev team reasonable? optimized yet?
- Has anyone solved this problem yet?
If the answer to all 3 questions above is YES-YES-NO , this is a good sign so we can trust that this is a good idea.
With each different group, we will have different evaluation criteria, so the above classification is necessary and it also helps us make a more accurate judgment about the project.
Team: Development Team
Through the process of reviewing many ICO projects, I realized that the common point of good projects is that they all have very solid development teams, spread across many specialties.
Before going into the profile review of a certain profile in the dev team, I always take the time to check the team structure of that project first.
You may find it a bit strange when you hear about this concept of team structure, but that's okay, I'll explain it right here.
Imagine a football team would normally have 11 positions on the field. These 11 positions will be divided into many positions such as goalkeeper, defender, central defender, midfielder, striker.
A perfect team is a team where all these positions are strong and united, working together in accordance with the coach's strategy.
With team structure, you can think the same way, except that the positions in an important team include the group of people who understand the industry, the marketing team, the finance team, the legal team, and the technology team, especially the IT team. blockchain technology.
In particular, the CEO will usually be the person who should understand the industry. It will be difficult to lead a team operating in an area where the CEO has no expertise in that field.
In addition, depending on whether the project belongs to the platform, protocol or dapps group, the number of parts is allocated more or less, but in my opinion it is best to have all of the above parts.
Advisor: Expert advisor
When it comes to mentors, we will immediately think of people with long-term experience in an area that the project needs, often the areas that the dev team is lacking.
From the perspective of an ICO issuer, there are two ways of thinking about choosing an Advisor:
- Method 1: Choose a person according to the crowd's expectations to easily raise capital, it doesn't matter if that person has any professional support for the team, just appear on the website for people to trust and invest. is to be.
- Method 2: Choose people according to the expertise that the team needs. With the mentorship of those people in the team, the project will certainly go faster and further.
For long-term projects, surely the second way will be to help them more.
Strategic Partner: Strategic Partner
Similar to an advisor, a strategic partner is a reputable organization operating in a certain field.
As a strategic partner, of course, there must be a two-way cooperation that benefits each other.
Many projects today are doing it in the way of trying to bring in as many strategic partners as possible to increase credibility, but sometimes the two parties are not even related to each other.
If related projects and cooperation really benefit each other, then say nothing, of course the more the better.
I'm just talking about projects that put in a good shape and beautify the profile but do not cooperate with each other to benefit each other.
So when you look at the strategic partners of a project, besides looking at the names, you should at least imagine how these companies will work together and how that relationship can be. "make sense" (reasonable) or not? Is this cooperation beneficial for both parties?
If so, that's definitely a sign of a good project.
When evaluating the product section of ico projects, there are 3 types of products that you will need to pay attention to:
Just stopping at the idea of whitepaper, there is no sign of product development.
At a time when there are so many ICO projects to invest in, you should not invest in projects that only have a whitepaper without a sample product.
Many of you will say that of course they have not developed a product, they need money to start doing so they just ICO, not what they ICO do?
Yes, from the perspective of a start-up, of course we need money so we have an ICO to raise capital.
But from an investor's perspective, if you have a lump of money, you have 2 offers and can only choose 1 of the 2, then between a project that has not done anything and a project they have spent their own money or managed to source money for. Having developed a demo product, which project will you invest in?
Not to mention the story of how much money needs to be raised, but just managing to develop the project on its own, it shows that the dev team is very passionate about the project.
Even if there is no money in hand, they will also think of a way to have money to develop the project, even without money they will do it to the end.
Besides, managing in the beginning also shows that the dev team has enough initiative to respond to any situation that occurs.
And with or without our money invested, they will manage. It is the ability of the dev team to adapt and respond quickly that will help them survive and develop.
As for the team that always needs money before doing it, it is likely that when the project runs out of money, the project will stand still and wait for more money to be poured before continuing.
Our capital is limited while many projects call us to invest.
Always be smart about putting your money in the right place.
- Proof of concept/demo/testnet
As mentioned above, projects with high-quality products in this group will give us a higher confidence in the dev team.
There is one more idea that I have not mentioned above, that is, projects that have developed demo products usually have more realistic development plans than projects that only have a whitepaper.
The reason is that when you think things are usually very easy, but when you start coding, a lot of problems will arise.
These problems often will not be foreseen if only at the level of ideas.
Only when starting to work, the difficulty will appear and now we need to deal with it.
A demo version, although not 100% complete in terms of ideas, but at least shows you the enthusiasm of the dev team and the potential difficulties in the product development process, thereby projecting a plan for the future. in a more realistic way.
- Final version
This is the type that we will look forward to the most, also the type with the fewest projects.
Projects of this type usually have finished product development, and most ICOs are to scale business faster.
Typical examples of this type can be named as Pundi X, Wabi...
Roadmap: Development Roadmap
When looking at the roadmap of a project, there are 2 questions we need to answer:
- First, is the vision of this project far-fetched?
- Second, is this roadmap reasonable & feasible?
- Visibility too short won't go far.
- If the plan is not feasible, it will be difficult to execute.
Once the project fails, investors' confidence will disappear, the need to use tokens to use in the system will no longer exist, of course there will be a not very bright future for our investment. .
On the contrary, a long-term vision, a reasonable and feasible plan will promise a much higher probability of success.
A successful project will make investors more confident, the token itself is also used inside the project's platform, promising a bright future when the token price increases.
For brevity, I will leave out the minor parts and focus on the most important part that you might be interested in, what determines the price of a coin/token?
We are investors. The price increase or decrease is definitely what we will be most interested in to enter, take profit, stop loss.
I'll talk about supply and demand first.
First when learning about tokens, you will need to find out where the supply of this project comes from and how it changes.
With a constant demand, if the number of tokens in the market decreases, the price of each token will naturally increase. If the number of tokens increases, the price of each token will decrease.
The number of tokens circulating in the market will usually increase when you see the following signs:
- The tokens sold in the private sale are unlocked and these investors flood.
- The project self-issuing more coins/token
- The project allows mining Proof of Work, Proof of Stake
Conversely, the number of tokens will decrease when the issuer burns tokens.
As for demand, with a constant supply, when demand increases, the price goes up, when demand decreases, the price goes down.
There are 2 main reasons why people decide to rush to buy tokens: buy to speculate on the price and buy to use.
Depending on which group of people holds the larger number of tokens, the price of the coin will be largely determined by that group.
A sustainable project is one in which the number of people holding tokens for the purpose of use will be more to invest.
At the time I made this article, there were very few projects doing that. Most of the group of buyers to speculate and wait for the price to increase is more.
Partly because the market is still new, partly because the majority of projects are in the development stage and have not yet brought products to the market, so the group of buyers for use is not significant.
This will change sooner or later when, in a short time, these projects will launch products and the demand for use will increase.
With the group of buyers using
If the project is successful, that is, more and more people use the product, leading to increased demand for use and use, limited supply, leading to an increase in price. On the contrary, any project that cannot do business will drop dramatically in price, gradually being eliminated by the market.
By now, perhaps you have understood a part of the story when in all the reviews, FoxCryptoNews always focuses on analyzing the possibility of that project being successful or not, because of why, right?
When a project launches their product to the market and is well received, the business develops well, at this time investor confidence will be high.
This belief will immediately be expressed through an increase in the token price. In the long term, just 1 deal is enough to bring you a lot of money, not to mention many projects.
With a group of buyers for speculation
Depending on the school of each person, their impact on the token price will also be different.
There are 3 main schools: technical analysis, news and market price manipulation (price manipulation sharks).
Technical analysis also has many types, but the most familiar to everyone is probably the candlestick-centered school of technical analysis, which uses price patterns that have worked in the past to predict direction. of future prices.
Usually news dispatchers tend to stock up on news and expect a breakout after it's out.
The market price school often chooses coins/tokens with small trading volume to easily make prices. They create traps for the FOMO crowd to buy when the price is rising and then make a profit. Coin/token with a larger trading volume, the harder it is to make a price.
With each different school, you will have a different way of analyzing to enter orders.
One thing you will need to keep in mind is that when a coin has many groups of holders, the person holding the highest number will have the most impact on the price.
Even if you are very experienced in technical analysis, but the largest holder of coins is being driven by price sharks, your analysis is very difficult to be accurate.
Which school holds the most token reserves will determine the direction of the price.
If you are a person who does not have too much time and does not have much expertise in financial investment, the simplest way is to find a good project, buy and hold.
You will have both comfort and profit, just a little patience.
Budget Allocation: Allocate budget
Budget allocation is the part of information where projects will present their plans to use the raised capital after the ICO.
There are 2 budget sections that I often pay attention to when looking at this section. One is the product development budget. The second is the marketing budget.
Depending on the nature of each project, the budget allocation method will be somewhat different.
The more technology projects, the higher the cost of product development will be. Projects with unique and different ideas will need to spend a lot to promote and expand the market.
The evaluation of the budget allocation structure of a project depends quite a lot on the feelings of each individual.
As you analyze multiple projects, gradually you will come to know how the allocation structure will be reasonable.
Raise how much and multiply?
Any project calling for an ICO has a number called a fundraising goal.
The more capital is called, the speed of asset multiplication will slow down.
Let's say project A calls for an ICO of 1 million dollars, then just add another 1 million dollars and your asset value will be multiplied by 2.
On the contrary, if instead of calling 1 million dollars, A calls 50 million dollars, then to x2 it will need to have another source of 50 million dollars poured into the market to buy coin A, your assets will double. .
That's why I like good projects but call for small capital, the smaller the faster and easier to fly.
Most of the current ICO projects are projects that do not have a finished product. It is for that reason that the price of the token is largely dependent on the speculator group.
This explains why a lot of projects are very good when analyzed like after the ICO is over, the price of the token will decrease because not many people know it, there are not many buyers, there is little demand, there is a lot of supply, so the price decreases. necessary.
As investors, we care about profits.
No one invests and wants to lose money.
But to be profitable, that is, the price increase after the ICO needs a larger amount of demand than the available supply.
How to stimulate this quantity of demand?
The answer lies in two words: PROMOTION .
My project is good, my project is good, but no one knows it, no one will use it.
The more people know about the project, not only creating an increase in demand for storage after the ICO is completed, but also helping the project develop a customer base ready to try the product after the version is released.
This benefits both sides: the project and the investor.
Signs of an ICO Scam
Scam is a very sensitive word and is probably the one we will most want to avoid when investing in this market.
No one wants to invest in a scam project.
But how to know what is a scam project?
Are there any clues or signs that can help us guess what is a potentially fraudulent project?
The answer is yes, here are 10 signs of a project you'll want to stay away from:
1. Team DEV anonymous - Fake profile
One thing must be admitted is this, ideas are very easy to copy and steal. Anyone can come up with an idea.
Do you admit to yourself that every day so many million dollar ideas run through our minds?
So why are we still not millionaires from those ideas?
It's easy to understand, anyone can think of an idea, but it's important who has the ability to turn that idea into an actual service or product.
Execution is what determines more of a project's success or just the idea level.
How to evaluate the performance of a person, a dev team?
It's easy, look at the results they've achieved.
The details of how to evaluate a dev team I will talk about in the section below, but usually when analyzing an ICO project, I try to find out very carefully who is behind that project.
This is one of the very important factors when evaluating an ICO.
So, if any project does not provide clear information about the dev team, including not providing information or deliberately fake profiles, it is a Red Flag (bad sign) signaling a project is likely to be. cheat.
2. Do not specify the purpose of the coin.
Why do we need to understand the purpose of a coin we want to invest in?
The price of a coin in the crypto market is greatly influenced by the law of supply and demand.
When demand is greater than supply, that is, buying pressure is higher than selling pressure, prices will increase.
Conversely, when demand is less than supply, selling pressure is higher than buying pressure, price will fall.
If we do not clearly understand the purpose of the coin, it will be difficult for us to determine where the demand to buy the coin comes from, but if we cannot identify the source of this demand, then a news, a project announcement launching we also do not know how it will affect the price of the coin we are holding.
That is to say, we are almost holding a coin that it does not know why it increases, and it does not know why it decreases.
That's like the style of investing holding a tree and waiting for a rabbit or opening your mouth to wait for a fig.
3. Sketchy whitepaper
I remember not too long ago, during a visit to Vietnam Blockchain Week event held in Saigon.
One speaker asked more than 1,000 people in the auditorium:
Those of you who have read the whitepaper of the projects you invest in raise your hand and say me!
The result was surprising, I remember correctly, there were only 5-6 arms raised.
This is also one of the most interesting paradoxes when it comes to crypto investing. Although the whitepaper is the most informative document about the project, most people don't read it.
When it comes to the whitepaper, there are two things to clarify:
First, the project must provide specific information and be as detailed as possible.
This helps investors to better understand the project and make investment decisions easier.
Moreover, I think that we are the ones who spend money to invest, so the desire to understand the project well is a completely legitimate and reasonable desire.
On the contrary, reading and understanding the project is also an act that shows we are more responsible for our investment.
If you don't read the whitepaper and invest with a loss, the first mistake is because we have not studied it carefully, not by anyone.
A poorly written, unorganized, low-information whitepaper partly demonstrates the attitude of that team to the project they are trying to raise capital for.
How can they accomplish great things even when their whitepaper is superficial?
Do you think it's true?
4. Do not provide contact address
This one is clear, the ICO investment process does not always go smoothly.
Sometimes we often get this error, that error and we will need help from the project.
If there is no communication, what can we do now?
When investing in ICO, sometimes you will encounter the feeling of having read the whitepaper many times but still have some unclear points.
This is when we will need contact information to ask more about those related issues.
Contact information is essential for investors.
If it's just fake information, or not real, it's best to stay away from those projects.
I can't stop transferring the money to buy it, but now I'm stuck or I don't receive the coin and I don't know who to ask, ask someone to solve it.
5. Commitment to return on investment
This is a feature you will be lucky to encounter with lending, ponzi and hyip models.
Lending is probably a thing of the past.
Many people have prospered very quickly thanks to coin lending.
And also a lot of sml people cry a river with coin lending.
It is too difficult for a project to find a large and stable source of money to commit profits to all investors every month.
The business is not always favorable, sometimes it is difficult to develop and sometimes it is difficult, but it can never be stable forever.
That's not reasonable at all.
The promise of profits is just a form of greed to attract investors.
But now I invest in it, they make a loss and don't have money to pay me interest, I can't do anything.
So for any project that commits a monthly profit, you can very quickly make a decision to skip that project.
6. Use sentences with the nature of pulling sentences
The communication message of a project will often show their long-term vision and who the customer is.
If a project emphasizes their message is to bring you attractive profits, then their customers may not be what they say, but maybe the audience they are targeting is you, the developers. invest.
So far, I have reviewed many projects, but have not seen any good projects that really emphasize bringing profits to investors.
Our grandparents used to have a saying: "show off good, cover bad".
In this case, I think it's quite true.
If their product/service is good enough, people will definitely show it off, there's no reason to hide it.
The high probability here is that the dev team itself is not confident enough with their products/services, so they use the message of profit to attract investors.
That's right, but if you don't talk about it now, there's nothing to promote.
7. Use a lot of buzzwords
Buzzword is one of those terms that talks about the use of a sublime, dangerous style but is actually very cliché, does not carry much information, with the aim of confusing readers.
For those who are not industry experts, hearing these buzzwords will feel like this is very professional, monumental and in-depth information.
But in fact, it's not just that people deliberately make the reader not understand or misunderstand.
Not only crypto but investing anything, we should only invest what we understand well.
When you want to invest in a project, study it carefully before making a decision to invest or not?
As for any project that I do not understand well, although I have tried very hard but still do not understand, in my opinion it is best not to invest.
There are many ICO projects, missing 1-2 projects is not a big deal.
There are always better and tastier new projects so there's no rush.
8. No roadmap or impractical
Every road will eventually return to Rome, only that there is a short way, a long way, a quick way to the finish line, and a long way to the destination.
Our world is changing very fast, sometimes a project is just ICO and someone steals the idea to build a new ICO.
Whoever is faster, captures the market share first, that person wins.
So when looking at an ICO project, the roadmap will be the part that will help us visualize where the development team will take the project and for how long.
Raising capital to start a project is difficult, but using it properly to bring the project to its destination as quickly as possible is a more difficult problem.
For projects that do not provide a roadmap, we will never know where and how this project will go.
When we don't know how they will use our money to develop the project?
Are you sure to invest?
Or when they provide a roadmap but set a very unreasonable roadmap, it will be very difficult for that project to succeed.
9. No demo product
Don't listen to what they say, watch what they do.
No matter how detailed and thorough the whitepaper is, if there is no demo product, all you hear is still on paper.
That is, the project was just talking, but never started doing anything.
You know that!
Easy to say, hard refresh.
Have you ever done something that before doing it you thought it was easy, but when you did it, it turned out very sour?
Obviously, when starting to work, a lot of problems appear.
Those problems, no matter how much we think about it, we will never know, until we roll up our sleeves and get to work.
With a project that only stops at whitepaper, they will not know what the problems may be when deploying, so their implementation plan will be much more difficult to be accurate.
What if they were supposed to raise $10 million, but when they started working they found out they needed $50 million?
Should we issue more coins for the next ICO?
This 10th thing is based on my own real experience in the process of reviewing ICO projects.
Sometimes I feel that the project is good, but for some reason I am not confident to invest, so I add it.
Having invested, of course, everyone expects a profit, but it also has to be comfortable.
There are a lot of ICO projects out there, nothing to worry about.
If you can't enter this bet, you will enter another.
But when I invest but I am not comfortable, when I go down to money, I am anxious day and night, wasting my energy because I worry a lot.
Chapter 4: ICO investment strategy
Strategy 1: Buy ICO and hold to die (definitely do not sell until the project is successful).
These are really crazy fans of Blockchain and cryptocurrency. Moreover, there is also strong and abundant capital, so it is not in a hurry to take profits.
Each project they invest in and the holding period is calculated in years. If the project is successful, the initial amount invested will be multiplied by a very large factor. If you hold the wrong project, not only will there be no profit, but your capital will also be lost.
Strategy 2: Buy ICO, wait for the token to appreciate and sell all the purchased tokens.
In stark contrast to group #1, followers of strategy #2 focus on capital turnover.
Time is the most important indicator for this group of people. How to win the most deals in as short a time as possible.
Strategy 3: Buy ICO, wait for the token to appreciate and sell a part corresponding to the invested capital, hold the rest to die.
You can visualize this strategy with the image of planting seeds.
Say, you have 100k, you invest in one project and it triples, you withdraw 100k of principal and carry that seed to another project. The remaining 200k token value will be held to die.
Strategy 4: Buy ICO, wait for the token to appreciate and sell a larger part of the invested capital to get capital and a little profit, hold the rest to die.
Strategy number 4 is generally quite similar to strategy 3, the only difference is that instead of only withdrawing to the principal, you can withdraw a part of the profit.
This is great because after withdrawing, you will almost be very relieved with the remaining money because you have already withdrawn both principal and interest.
The rest is just extra profit. Fortunately, the profit is more, the unlucky is more profit, but it is profitable anyway.
Strategy 5: Capital management
In investing, capital management is very important if you want to limit losses and maximize profits for the overall value of your assets.
Each person will have a different "blood level", so there is no specific formula that can be correct for all cases.
If you have less money, you can consider taking on more risk but should not be more than 10% of the asset volume per trade.
If there is a lot of money, safety should be the top priority therefore every deal. You won't want to participate more than 5% of your stake on each deal.
Capital management, easy said, difficult to do.
Good capital management requires a very high level of investor discipline.
Most people fail because they don't know how to manage capital.
They fail because they are not disciplined enough to properly manage their plan.
Chapter 5: How to buy ICO with Ethereum
Each project when announcing an ICO sale will always have a buying guide attached. Depending on the organization of each project, the purchasing method is also different.
Since the majority of ICOs today mainly use the Ethereum blockchain, in this tutorial, I will focus on how to buy tokens running on the ERC-20 platform.
Projects running on NEO, QTUM, ICON... will be updated by me in the near future.
Normally, projects running on the platform of Ethereum, will have the following way to buy ICO:
- You sign up for an account on the project's website
- Deposit ETH into your account
- When the ICO is open for sale, you only need to log in to the website to buy.
- After buying, the token will be updated in your account, now you can withdraw to MEW wallet to store your assets or transfer to the sale floor.
- You sign up for an account on the website
- When the ICO is open for sale, you log in to your account and you will see an ETH address appear
- You transfer the amount of ETH you want to participate in the ICO to this address
- After the end of the ICO token will be returned to the ETH wallet address that you used to transfer ETH during the ICO purchase.
- You can leave the token in your wallet or transfer it to the exchange
Sometimes the process of returning tokens to the wallet will take a period of several days after the end of the ICO.
You will need to patiently wait for the token to be returned to your wallet to rest assured that you have successfully purchased the ICO.
Chapter 6: Some experiences when investing in ICO
There are lessons we don't have to go through to learn. The following are the experiences summed up about investing in ICOs that can help you succeed faster.
#1: Never put your eggs in one basket
Any investment is always inherently risky.
No matter how talented and analytical you are, the probability of failing a deal always exists.
Therefore, always divide your eggs into many baskets, don't go all in.
You can win 99 times, but only 1 defeat, all your previous wins will go up in smoke.
2: Stay away from projects with signs of scam
Do you remember Warren Buffett's #1 investment rule?
"Never lose money".
There are a lot of good projects out there waiting for us to invest, it is better to invest in a good project, eat a little bit but with high safety, than invest in a project that has the ability to cheat and take your money. me.
When you haven't invested, the money is still in your pocket.
Once you have cashed in, the money is in the dev team's pocket.
Be very careful with your investments.
3: Free meal only on mousetrap
When someone gives you a deal, you will definitely win 100%.
Then remember your above statement. There is no such thing as a free meal in this world.
Nobody gives nobody anything, everything has its price.
4: Always learn and develop yourself
Blockchain & Cryptocurrency is a very fast growing field. Everything changes every day, every hour.
In an area where everything is moving forward, standing still is going backwards.
Yesterday's knowledge may not be true today.
Keep yourself a mindset of always learning and updating your knowledge every day to improve.
5: Find like-minded, like-minded people to exchange and learn from each other
Grandparents have a saying: Learning from a teacher is not good at studying friends.
Therefore, having a small group to exchange investment experiences not only helps you improve very quickly, but also creates quality relationships that promote each other's growth day by day.
When they lose, someone gives their condolences, when they win, the whole group celebrates together. Isn't that a lot more interesting?
6: Learn to take responsibility for your own decisions
If you win, be happy, don't be too happy and if you lose, at least find out why you lost so that you don't make it again next time.
When you invest because you trust someone to recommend, always respect that person regardless of the outcome.
The money you bring to invest, whether you win or lose, is your sweat and effort, so be responsible for it.
You have down money, next should do?
Please wait patiently for the day of picking. You can't have a baby in 1 month by getting 9 women pregnant.
You have tried your best. Now is the time for us to sit back and rest, waiting for the day of fruit picking. Miracles often take time. Good luck with your investment!
If this article is useful to you, please help me share it with your brothers, know it will help someone!
Good luck with your investment!
Oct 17, 2022