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A step-by-step guide to the world of ICOs


Dec 24, 2017 Posted /  11211 Views


A step-by-step guide to the world of ICOs

The recent days for Bitcoin have been quite inconsistent as a sharp slump made it down to $12,505 and after much drama, it started ascending towards some consolidation prices. However, Bitcoin enthusiasts are still preaching the opportunities in Bitcoin as regular market speculations are still divided on its purchase. Nonetheless, Crypto assets are not going out of fashion anyhow. But if you’re searching for the multifold gains that early adopters witnessed, you may have to look beyond core Bitcoin.

All you need to do is research and dig deep into the universe of diverse crypto tokens and find that actually suits your investments. If you feel that Bitcoin and top most cryptocurrencies on the list are far volatile and you cannot engage yourself in them than you can eventually get into new ones through initial coin offerings (ICOs).

The immediate gains may seem exciting and any contributor must advance towards investment in crypto assets with immense vigilance. There are some critical steps to appraise an ICO.

1.     Know the history of ICO

It is significant to realize who are you working with- the history of people and companies, and their inspiration for coming into the blockchain space. Numerous companies are simply the new ventures into the blockchain, however the people at the back of are mostly veterans from a range of business houses. It is important to search for the profiles of the founding team to see if they have built equilibrium between technical and business expertise. Many ICO teams encompass the marketers only, which might be a dilemma when it comes to the genuine enlargement of the product in the market.

It is not necessary that only startups be involved in the ICOs, some reputable companies are also holding onto ICOs. The proven track record may help investors to worry less and find out if the company is even competent of delivering a minimum viable product. Since investor protection regulations are lagging, make sure to watch out for scam ICOs. With a bit of research, you can avoid being forged into the hands of failing ventures.

2. Analyze the project

It is pertinent to review the white paper of ICO in detail. Scrutinize if the project’s target audience could really benefit from blockchain. Also it is important to evaluate if the project offer something impressive and effectual in the market. The projects, which encompass factors akin to financial services, real estate, cybersecurity or healthcare, are great fits for blockchain. Nevertheless, this has also led to diffusion and clash of services on these markets. New participants should be able to offer novel and inimitable plans which build upon the potency of existing services.

3. Establishing the rationale of the tokens

Crypto tokens may provide various solutions. Scores of these tokens are “utility tokens” which means that these tokens will have particular use cases on their individual platforms. For instance, many analysts find Ether a better token in comparison to Bitcoin and Ether is utilized to process transactions on the Ethereum network. Thus this token is needed for the functionality of the platform. For the same reason, utility tokens are frequently evaluated to offer more value. Apart from being tradable, you can employ them to benefit from these services, in contrast, to others tokens, which are just a form of equity or security. Further, these tokens are basically offered as virtual currencies. Often, it is these virtual currencies that hold the greatest risk, as their value is dependent on whether or not people will actually utilize them. It can tough to immerse people in using their services or platforms.

4. Comprehend the mechanics

Appraise the technicalities of the token sale. Particulars on how you could contribute in the token purchase should be transparent. There’s no scarcity of anecdotes of ICO new participants losing money through miscalculations and errors for example sending token to the wrong crypto address. You should also be plain on how you desire to accept your purchased tokens. A few may give you admission to an online wallet where the tokens are stored. While some others, like the ones that use Ethereum’s platform and smart contracts, may instinctively credit tokens to the wallet that you are using regularly to send the investment. Be conscious of possible red flags.


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Tags: ico initial coin offerings crypto tokens

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