No marketing slogans, persuasive language or clever buzzwords
In our first episode we talked about the White Paper and how it should be structured. There are no marketing slogans, persuasive language or clever buzzwords in a good white paper. It should never explain how much money you can potentially make by investing in a project, nor should it detail the risk of loss. You should find no profit charts from other crypto projects for comparison. That is not the purpose of a white paper. A white paper is a technical paper that the average layperson would not understand. Despite that, or perhaps because of it, it is the basis of a successful project. So let’s move on to Rule #2.
Who is behind it?
Who has published this white paper? If there are no details about the author or authors behind a white paper, just a pay-in address for Bitcoin or Ether, this should ring alarm bells! Leave it alone!
For legitimate and credible white papers, the initiators are publicised and well-known in the sector. Due diligence can be carried out with a simple Google search.
A professional ICO investor crystallizes his approach in a very simple question he always asks at the start of his analysis, which is “How probable is it that the guys behind this are going to run off with my money ?” That question is crossing my mind every single time I am about to buy cryptos.
Do research on the team!
To answer that, a simple Google search is not usually enough. However, it is typically quite easy to do some further research to get the answers and reassurance that you need.
One way to gather more information is to check out the relevant forums. Look at how and with whom the initiator(s) communicate.
Keep in mind that it is not enough to just see here that the initiator once tweeted Vitalik Buterin, the co-founder of Ethereum. You have to evaluate how the initiator communicates with others and on what subjects. When he or she has exchanges with other technical experts, what do they write about? Are technical questions discussed? How do others respond to them? Do they seem to be held in good regard by others in the community? Even if you can’t judge the questions and answers yourself, you will know whether it is technical details or whether they are getting a lot of praise or blame from colleagues.
Getting heat or blame is not a red flag in itself—it can sometimes just be a sign this person has awoken interest in the community. Trust your instincts. If you do your due diligence and dig into enough research, you’ll have an instinctive sense of whether the person is credible or not.
Are the initiators good developers or are they only marketers?
If you have identified that the person knows what they’re talking about and is in relatively good standing, then that is a good basis for a small investment. A small gamble better yet said. I would not invest in these teams or people, but sometimes I might gamble a bit.
However, it is still not enough to justify the risk of a larger investment. For that, you’ll have to delve deeper.
To deepen your own analysis, you’ll have to look at how many software codes have been published in the past by the initiator on the professional platform GitHub, and what happened to them. GitHub is an international platform that basically stores all the codes written by the programmers using the platform.
The programmer can choose whether the codes are stored openly, just for the programmer themselves, or for the programmer’s company. If they are stored openly, it is called open source, and this leads to another very important investment criterion
You’ll find more on open source and why it is so important in the next episode.
Only information, not investment advice This course is not just about the opportunists and rip-off artists that lurk at every turn; it is also about the enormous opportunities that proper ICOs offers to investors. However, it must be stated categorically at this point that this course is only intended to explain and inform. The statements in this course are in no way intended as instructions or advice for investment, nor can they be construed as such. Any investment in an ICO and every purchase and sale of cryptocurrency is undertaken at your own very high risk, and should not be based on any of the statements presented in this course under any circumstances. Do your own due diligence in every instance before you participate in any transaction