What is an ICO?
This works in a very similar way to other more traditional forms of investment, such as the IPO (Initial Public Offering) or even crowdfunding (when many people make small donations for a specific purpose). It can be said that it is a combination of the two, but for a single purpose: the development of a how to store cryptocurrency.
Does this term sound like? They are those virtual currencies that serve to acquire goods and services in the real world. You are more likely to know the Bitcoins and the Ethers, Ethereum. When someone wants to create a cryptocurrency, they can launch an ICO to raise money.
Of the term in English Initial Coin Offering, and also you can see it in Castilian like Initial Offer of Currency, is when a person invests certain amount of money in a new cryptocurrency in exchange for this currency.
How do you make money with an ICO?
Cryptocurrencies have struggled to gain a place in the current world, and they have succeeded. Coins like the ones mentioned above (Bitcoin and Ether) surpass $ 1000 USD and even Bitcoin has reached almost $ 20,000. Imagine that you invest $ 100 for about 20 new cryptocurrencies and that within 2 or 3 years they cost $ 1000 each. That is to recover an investment!
So, if you are an expert in cryptocurrencies, you have handled them before and you can wait a few years to recover your investment, follow these tips so that the risk of losing your money is much lower.
Tips for investing in an ICO
Do not put all your money in an ICO
Like any investment, an ICO also represents risks, so do not get too excited. Remember this general investment rule: do not invest more than you can afford to lose. You can receive a good income, yes, but you could also lose your investment. So do not be fooled because, at the end of the day, no one can be completely sure.
Make sure you read the technical document
The technical document is where the developer of the cryptocurrency establishes all the goals and objectives of the ICO. How much do you need, how will you use the collected funds, how long the ICO will last, and much more? If it is not your specialty field, ask for the help of someone with more knowledge in the subject and ask him if the project seems viable and with possibilities of success.
Investigate the project
Any serious project must have a website and social networks, at least. If not, get away at once because it is possible that it is a scam or that they are not sufficiently committed to the matter.
So check every corner of the website, read all the information about the developer, save the contact information, and read their news on social networks. Evaluate if they constantly update, if the information is sufficient and if everything looks serious and professional.
Become an expert in cryptocurrencies
You should know how this system works to avoid losses or have a problem later. Create a digital wallet, make some transactions, and read a lot about it to know how it works and everything you need. You will thank me later!
Do not get carried away by complicated exchanges
Lately, many currency exchange platforms have emerged. While they can be useful and get benefits with them, do not risk unless you really know the system, because if someone wants to exchange their currency for another is because he thinks that with the other will have more benefits.
So your best bet may be simply waiting for your newly acquired currency to rise in value. However, stay informed and take action if you see any indication of the failure of the project. “Shrimp that falls asleep …”