ICO Scams: How to Avoid Fake Initial Coin Offering Token Ratings

When January 1, 2017 finally found the calendar, less than 1% of the earth's population knew what an I.C.O. meant, stood for, or represented. One might say outside of head hardened hodlers and the crazily-christened crypto community, virtually no one knew it stood for initial coin offering (obviously similar to the initial public offering) and would go on to disrupt venture capital funding and see the crypto market cap swell to $830 billion at the height of the ICO bubble.

Now, we have complied a two-part series below that cover all aspects of ICO scams:

Of course, the ultimate bitcoin scams and crypto hacks timeline list can be found here.

Contents

Before we dive into our fortune favors the bold formulated ICO rating system, we have also assembled an initial coin offering calendar list below who share new, active and upcoming token sales for all major and deserving alternative cryptocurrency coins and projects.

Now, a little judicial justice needs to be brought to the forefront by bringing up the recent past history just to put everything into perspective. Jan 1, coinmarketcap.com was a mere $17.7M and now mid-Sept 2017 it has blossomed to over $127.7M.

In 9 quick months, that's a 7x growth to date (also BTC @ $1,000 USD compared to $4,000+ and ETH @ $8 USD compared to $300+ according to coinbase.com) and has many more advancements and agendas to be fulfilled in the future.

Now, it might be one of the fastest growing search terms of the entire year as Initial Coin Offering (spin off from Initial Public Offering) cryptocurrency projects have exploded, but the real keys to make sure you pinpoint before getting big eyed and gullible profitability hopefulness.

There are 7 major mind opening questions to get answers for to start down a path of invest into ICO speculation or superior promise.

No matter how jaw dropping a trendy slogan or catchy proposition, these are the seven investment parameters and research initiates to make sure you follow through with:

While this may seem like a daunting uphill task to follow through with, it can put much more emphasis on informed and educated decisions about investing fiat into what some might consider pre-done pre-setup products and services in these ICO token sales.

Hype can sell, but ultimately value-added game-changing life-altering products, programs and platforms will reap the biggest rewards when it comes to flipping these ‘penny stock’ equivalent cryptocurrency tokens.

In light of this new phenomena in the bitcoin blockchain currency space, there have been a bunch of new websites and services to get all of your favorite crypto news, updates and advancements.

Above we gave you the top 7 aspects and elements that need deeper examination for proper investing research. There is a lot of buzz going around these days as it pertains to Initial Coin Offerings and is easy to get caught up in "the next best thing" and the "latest greatest enhancement" but having these benchmarks and bulletpoints will help eliminate poor choices and decisions regarding investing in initial coin offering tokens.

These events are where new startup companies try to raise as much money as possible (through cryptocurrencies such as bitcoin and Ethereum) to get their company's concept off the ground. Many of these startups are tech companies that develop new platforms for cryptocurrencies to be used to make transactions easier and more secure, without burdensome regulation from governmental agencies.

It is easy to see where problems can arise from these Initial Coin Offerings, though. What if the people involved in the company have bad reputations? What if their business model is not sustainable? What if its all just hype and no substance? These are all very real risks that prospective investors have to keep in mind before jumping into a new company's Initial Coin Offering.

Luckily for those prospective investors out there, I am here. I utilize a very thorough analysis method to look through every nook and cranny of a company and its Initial Coin Offering to see if it is worth investing in. No stone is left unturned and if there is any indication that a company may end up failing, you can bet your bottom dollar that I will point it out.

Now, I am sure you are interested in what my "thorough analysis method" consists of. Follow me, as I give you a peak under the hood of my review process.

You would think that determining the risk of the investment would be one of the last parts of my analysis. Nope! It is the first. This is because it is the most important metric and I know how busy investors are.

They may not have time to dig through an entire analysis so I make sure to give the information they need the most in the beginning.

Anyways, I determine the risk of the investment by looking at various aspects of the company and its Initial Coin Offering:

If all six of these facets of a company and their ICO check out without any issues, I would conclude that there will not be a whole lot of risk involved in contributing to that company's ICO.

Of course, there is risk involved with any and all investments, but if the company passes my test, then any risks involved would be market-based risks that can't really be avoided or predicted. If the business does not pass my test, said business is most likely fraudulent and you should not invest a single penny in it.

After I determine the investment risk involved with a business, I look at how much buzz their ICO is generating. If they are generating a lot of buzz and have a lot of people on social media talking about them, it indicates an effective marketing campaign.

In addition to that, it indicates that they have an idea that a lot of people would be interested in. And of course, those interested people would most likely include some very wealthy investors looking to get a piece of that pie.

When you have more investors interested in a business idea, it makes the idea look better and more profitable, which drives more investors to invest in it. If an idea is getting no attention from investors or the public, it is in the indication that the business did not have an effective marketing campaign and that people are not sold on whatever idea they are trying to pitch.

When I determine how much buzz a business is getting, I look at the following things:

The most desired outcome for a business would be if they are able to check all four of the above boxes. They would need to have a large social media following, receive plenty of attention from relevant media publications, be easily visible on search engines like Google, and receive plenty of daily hits on their website.

This is where I determine if a business and its idea will continue to be profitable for a long time. This is a very important thing to discern because not a lot of people want to invest in something that will have a quick boom and then fade into obscurity.

Thankfully, you can prevent yourself from falling into a trap like that by taking a look at how I determine the long-term profitability of a business and its idea. This determination is based off of several conditions:

These are four very important facets of a business that any business should consider before kick starting their ICO. Initial Coin Offering raters like myself will definitely scrutinize these before giving our stamp of approval.

Investors will also look at these before deciding to pledge their money to the project, especially now that I am telling them that it is important to do so.

We wanted to take some of the search guesswork out of your way and compile a list of the top ICO websites to follow and keep tabs on for future references and bookmarking.

As of right now, these initial coin offering websites are in no particular order but in due time will be reexamined and ranked accordingly for timeliness, appearance and how frequently updated (as we are in a rapidly evolving space).

Most Popular Initial Coin Offering List Services:

That is a solid list so you don't ever miss the next big ICO or the latest greatest initial coin offering investment opportunity.

We are just one team who happens to deeply analyze businesses who are looking to launch an Initial Coin Offering. Biases aside, we like to think that our process is pretty thorough and does not leave a lot of room for debate or complaints about being unfair from businesses.

That said, if you do disagree with any of standards and researched reviews (we have 1,000s now), please feel free to voice it below in the comments. And for investors who do not think we are thorough enough in the analysis provided, suggestions are always welcome. We read and reply to every email that warrants one as well as commenting back on opinions and statements left below.

What we have assimilated here today is to install confidence and a semi-structured cryptocurrency checklist and curriculum of necessary components and features/factors a solid and sound investment should have. Everything we find is consolidated to help the search process become faster, and advice for prospective investors should be taken as a stepping stone and not a final verdict when attempting or choosing to buy into a new initial coin offering, no matter how proven or exciting it may sound on the surface.

While rules, regulations and near-inevitable 3rd party oversight looms in the background of uncertainy, one thing remains, initial coin offerings are rivaling the traditional methods of crowdfunding and fundraising tactics and is showing no signs of slowing down especially when they should be adaptable to whatever new laws and legal obstacles ultimately get handed down.

This guide is far from done, as we will keep chiseling a final sculpture for how to best invest into ICO opportunities and which initial coin offering tokens actually past the test to stand above the rest.

Consumers and investors had many victories in 2017, due to the impressive value of cryptocurrency evolving. However, as 2018 starts off, it is important to have a clear idea of what the economy is doing, helping them to make a decision about what their next move is going to be.

Some things are not expected to change at all, like whitepaper, prototypes, and even conferences. However, CoinDesk decided to put out some information to help consumers see how the crypto world will be changing.

Even though there are many discussions around the world about the best ways to make cryptocurrency seamless, it appears that global governments will not gain more clarity. There are many legal problems that need resolution, and the benefit for the crypto community will depend on those results. New ICOs need to be aware of the rulings of the court, using that information to create a more cohesive platform.

CoinDesk expects the actual sale of tokens to decline. Luckily, the value of each token is expected to rise as the different investments and trading take place. Sales will become more privatized, and the tokens reserved for the public will steadily decline.

If Ethereum wants to continue to be an impressive resource for the global community, they will need to increase their speed. There are some companies that are trying to launch on other platforms, but there are still plenty of investors that believe that Ethereum will continue to be the main resource. Luckily, the same founders have managed to create a back up plan, ensuring that they protect their ICOs and investments.

The biggest appeal of cryptocurrency is the decentralized nature of it. Brayton Williams of Boost VC is focused on "talent and shipping." As a result, financiers and independent businesses may start feeling the urges from their investors to make the tokens available for their intended purposes. However, it is theorized that the tokens were released at such a rapid pace that they may not be able to deliver on all their promises.

Token economics is still fairly new, and the ability to utilize them in any capacity has not yet been achieved. Owners of these tokens will notice that the ability to spend them will largely decide how worthy that the investment was in the first place. The ability to spend the tokens that investors presently have will help the global community to judge the value of cryptocurrency in the first place.

As the tokens get older, consumers are generally becoming more informed about cryptocurrency, which makes them savvier for their investments. With more sophisticated consumers and investors, users will form a clearer idea of how to use them. With tokens being divided between utility and security. With greater popularity, consumers will understand virtual currency in a way that was completely unnecessary a decade ago.

The final idea of what this year will bring with ICOs is that tech companies are expected to decentralize their tokens, which helps them raise money. This step is crucial to make more profit, though CoinBank indicates that those same companies do not have much of a need for decentralization at all.

With these changes, consumers need to keep their eyes open to make the best investments in 2018.

Before the introduction of smart contracts on the blockchain network and the appearance of Initial Coin Offerings (ICOs), start-ups which wanted to raise money for their project had to rely on investors, initial public offerings and of course, their own pockets.

For those who do not know, an ICO is a form of crowdfunding, where companies create tokens which other people buy, in order to raise money for their projects. Many have referred to ICOs as a combination between Kickstarter-projects and Initial Public Offerings, as investors can get both advantages, but also monetary rewards in the long run. However, ICOs are considered high-risk and high-reward investment ventures, therefore there are a couple of aspects that you must keep in mind to ensure that your capital doesn't go to waste.

White papers are basically the company's pitch to potential investors. Because of this, they have to be well-written and include all relevant information about the company's vision, how the services will work, features, developers and more. Most of the times, the quality of the white paper can either make or break a company, and it clearly shows whether the team is serious enough about their project.

With this in mind, as a potential investor, you’ll have to double-read the white paper, and only consider an investment if you understand everything the white paper is trying to say. Also, make sure to pay attention to details, as some companies have been known to exaggerate stats about the current state of the market. Fact-checking is therefore an essential skill for ICO investors.

When evaluating an ICO, it is mandatory to do as much research as possible. This research effort also consists in reading about the team behind the project. While most companies launching their ICO are new on the market, chances are that members of the team have been involved in similar projects in the past.

It is recommended that you go ahead and separately search for each of the team members, as a form of background check. To qualify, team members need to showcase expertise in their niche of business. A project with team members that lack experience is definitely a red flag. After all, if you’re launching a project and wish to raise money from the public, a level of trust needs to be established between the developers and the investors.

Additionally, some ICOs may be held by companies which are already established, and wish to further accelerate their capital income, in order to release new products and services. If this is the case, time should be invested into learning more about the company, and the other services and products being offered. Doing so will likely lead to a smarter investment decision with a higher payoff later down the road.

There may be cases when start-ups don't even bother to list their team members, the positions they occupy within the company and their experience. This is yet another red flag. If the company isn't honest about who works for them and who is in charge of the project, why should you purchase tokens from them? Not only this, but start-ups who choose to hide important information like this may be scams, as no one is publicly assuming responsibility for the outcome of the project and the ICO.

Tokens which are being sold for the sole purpose of raising money and don't offer investors any additional benefits apart from resale value may not be worth it. Well-conducted ICOs often allow investors to use these tokens as a way to purchase services from the company, whereas those who are only holding an ICO for raising money will not. Because of this, it's recommended that you consider long-term value and potential use for the tokens that you’ll be buying. After all, if the price doesn't increase and you’re unable to trade the tokens for a profit, at least you want to be able to get access to the services being provided by the company.

ICOs often market themselves to various digital currency forums, but also on social media platforms such as Facebook, Instagram, Reddit and more. Use their marketing techniques to your advantage! Read all ICO presentations wherever they are posted, and make sure to keep a close eye on what other people think. They may have more experience than you, and may be better at catching red flags and giving advice. Don't base your entire investment decision on what other people think though.

Companies with realistic and well-developed road maps that share their future plans are always a better choice. As an investor, you want to know when the project started and how far the development team has come. Additionally, you also want to know the future plans of the company following the ICO. If a company only wants to offer a certain service until the end of time, with no further investments and ideas planned out, then chances are their success will be short-lived. This is a bad sign for potential investors, as the token value increase potential remains limited.

By investing into an ICO, you’re basically putting your money to work. Wise ICO investments consist of companies which are transparent about how the funds will be used. This means that they need to share the total number of tokens to be released, how many will be sold during the pre-sale and the coin offering, what percentage will go to the team and brand ambassadors, and how the raised funds will be used to bring the project to life. Serious start-ups will often share all these details, and even state what percentage of the funds will go to marketing, employees, project development, future investments and more.

Websites represent the company's face before potential clients and investors. With this in mind, we would recommend taking a close look at how the website is set up, what kind of images have been used, and whether the user interface is easy to navigate through. While you shouldn't expect a level A+ website, companies need to invest time and money into creating quality websites. In the long run, the quality of their website will have an important role in the success of the company. Therefore, a poorly-designed website shows the company isn't able to invest enough time and money into smart marketing, and page development. If this is the case, then chances are that they’ll follow the same trend once the ICO funds have been raised.

Based on everything that has been outlined so far, keeping these tips in mind will likely lead investors to making smarter investments, hence choosing the right ICOs to believe in. Lastly, if your gut tells you that something isn't right, perhaps the best choice would be to look for other companies to invest in. There are more than enough choices available on the market. From your point of view, which other factors should be considered before purchasing tokens?

Initial coin offerings, or ICOs, are an extremely successful and popular method of generating startup capital through the process of tokenization. This method allows innovative startups to avoid traditional venture capital funding methods and bring unique, disruptive products and platforms directly to the industries they target.

The massive amount of growth that the blockchain sector is experiencing is creating a massive amount of innovation, allowing innovators to devise new ways to bring blockchain technology to the world. Launching a successful ICO, however, is not easy. There are a number of factors to consider when beginning a tokenization project.

One of the main drivers behind the rapid increase in popularity of tokenization is the extreme convenience it delivers in both quantifying assets and managing them, regardless of the product. When assets become tokenized on the blockchain, they become extremely easy to track and trace. Tokenization makes it easy for new startups and business to administrate.

One specific area in which tokenization has been extremely disruptive is crowdfunding. Token sales, or initial coin offerings, have become the most popular application of tokenization, allowing new startups to raise an extremely large amount of capital fast. This ease of use is primarily due to the lack of regulation surrounding initial coin offerings, and the international nature of most ICO platforms.

There are currently thousands of different initial coin offerings active in the blockchain environment today, with new ICOs launching every day. Some ICOs have generated hundreds of millions in capital in a matter of minutes, while others have struggled. The main difference between successful unsuccessful token sales is the quality of the initial coin offering itself.

The most important element of any initial coin offering is a powerful idea, preferably in the form of a working product. For some projects, however, a proof of concept is enough, which is typically presented in the form of a white paper.

The second most important element of any ICO is the team driving it. The team should be publicly visible, and be supported by a good marketing team and a generous starting budget. These two factors are one of the most reasons less successful ICOs fail.

Aside from the above two factors, it's also possible that many ICOs fail simply because there is no market or need for their product. Even with the perfect development and marketing team, a poorly designed product with no market will fail to achieve success.

The blockchain ecosystem has spawned a number of PR and marketing firms that specialize in blockchain technology and initial coin offerings. Some of these platforms, such as Token Market, ICO Box, and Waves take this concept a step further, offering startups a complete startup package.

The development of these platforms is creating a wide range of opportunities for new startups, removing the barriers to entry that prevent many disruptive concepts from entering the marketplace and thus fostering greater levels of innovation in future.

Initial coin offerings, or ICOs, have attracted a significant amount of attention recently for the destabilizing influence this largely unregulated aspect of the cryptocurrency industry has had on the price of Bitcoin, and the crypto market as a whole.

Comparable to traditional IPOs, initial coin offerings have presented entrepreneurs and organizations with a new way to raise venture capital and catalyze rapid growth. The loose and largely nonexistent regulation surrounding the ICO sector, however, has led to a great deal of confusion regarding ICOs.

As a result, many regulatory bodies around the world have taken steps toward creating a framework with which to manage ICOs, with an ongoing debate raging regarding their legislative status. Some countries- such as China, have even gone so far as to completely halt ICO action in their jurisdiction completely, a move that was responsible for a 7.5% total Bitcoin price drop for a number of days until the action was clarified as a temporary measure.

Despite the hysteria surrounding ICOs, they remain a powerful financial tool, and have spawned thousands of success stories featuring developers and investors alike. Despite the extreme popularity of ICOs, however, there are a number of projects that fail to garner any interest whatsoever, for reasons that are difficult to determine.

In this article, we’ll present the ten least successful industries for initial coin offerings and present some key metrics regarding their total penetration into the ICO sector. Take a look at this graph courtesy of ICOWatchlist.com for Total USD Raised Per Category & Projects Per Category in %.

Surprisingly, content management is one of the least popular industries for initial coin offerings in 2017. Despite being a highly relevant sector to the blockchain, the content management related ICOs currently present in the market have seen a low adoption rate.

The content management industry has raised just $9.5 million USD throughout 2017 to date, or just 0.4% of all ICO funds raised, which is far lower than expectations. As regulations are developed for the ICO sector, however, analysts expect this figure to surge dramatically.

Real estate is traditionally a high value industry, which does not lend itself to the fundamental nature of initial coin offerings. There have been a handful of projects that have attempted to raise capital through ICO platforms, which have as a whole raised just $9.085 USD. The disparity between the expensive real estate industry and the nature of ICOs makes it doubtful that real estate as whole will capture more attention in the ICO sector.

Incumbent industries that are heavily invested in infrastructure have been observed to yield lower than average response rates in the ICO sector. Decentralized communication has struggled to achieve a significant amount of penetration through ICOs to date, gathering just $8.815 million USD throughout 2017. The highly publicized Kik ICO, however, may have a positive impact on the presence of communications in the ICO industry depending on the response it receives.

There's no doubt that the cumbersome healthcare can benefit greatly from decentralized blockchain technology. Very few ICOs, however, have focused on the healthcare industry at this point in time. To date, healthcare and pharmaceutical related ICOs have collected just $8.31 million USD. There's certainly a significant amount of room for growth in the ICO space for healthcare solutions.

The events and entertainment sector doesn't present many opportunities for developers to present innovative initial coin offerings. Despite this disadvantage, the entertainment industry has still somehow managed to gather roughly $8.07 million USD in funding through ICOs in 2017, which is an unexpected turn of events that may be worth tracking.

The social network industry is home to some very well established major players that are extremely resistant to change. Although there have been a number of aspirant ICOs that have attempted to shake up the social network industry, the total volume of capital collected by these ventures have not exceeded $5.625 million USD.

At a glance, it's easy to understand why data analytics ventures have failed to raise a significant amount of capital via ICOs in 2017, as the industry lacks any serious relevance to ICOs as a whole. Data analytics offerings have raised just $2.037 million USD in 2017, almost making it into the top three worst performing verticals in the ICO sector.

The obvious link between ICOs and energy presents many opportunities that could leverage the need for a decentralized platform that could be used to trade excess renewable energy, but the ICO sector has seen no strong projects focusing on this line of reasoning. As a result, the energy and utilities industry has gathered just a little under $2 million USD in 2017.

The majority of blockchain-related projects in the supply and logistics are unlikely to utilize ICOs as a method of raising capital, which has seen only a desultory effort exerted in the ICO space by the industry. 2017 has seen only $851,295 raised for logistics-related projects, which is not entirely unexpected.

While it may not be the best industry out of the eleven we have covered, there is no denying the radical shift blockchain distributed ledger technology is having on the cryptocurrency casinos. With the internet enabling gambling, betting, poker and esports to name a few, blockchain's shared accounting system for all records will prove to be much more transparent and efficient in the years to come.

Let me introduce you to the newly found concept of I.C.O. aka modern-day crowdfunding campaigns aimed at direct access towards investing into new tokens, services, projects, platforms and programs.

One of the key axioms of blockchain technology is the intent to optimize and transform traditional rules of governance. Despite this, there have been very few ICOs that have attempted to focus on this particular sector in 2017- the total amount of funds raised for governance ICO projects in the year is just $258,645, a disappointing result that will hopefully change in the near future.

Initial coin offerings, or ICOs, have made it possible for the general public to invest in a wide variety of innovative blockchain platforms, and provide enterprising blockchain organizations to access alternative methods of generating startup capital outside of traditional avenues.

In the third quarter of 2017 alone ICOs have succeeded in raising more than $1.3 billion USD for a broad spectrum of different blockchain ventures. This astronomical figure is more than five times the amount of capital generated through venture capital investments in the blockchain space.

2017 has seen the launch of more than 200 different initial coin offerings. Assessing each individual offering and performing due diligence on every ICO would be extremely time consuming for even the most attentive and focused analyst, as there are many different factors to consider when determining the value of an ICO.

What would be difficult for a professional analyst is virtually impossible for an amatuer investor. The highly complex nature of blockchain technology means that there is a sharp learning curve when attempting to gain a working understanding of distributed ledger platforms, with many different consensus methods and use cases to learn about in what is a rapidly developing field.

The rapid rise in public interest in blockchain platforms, combined with the technical terminology and regulatory absence have created an environment in which fraudulent initial coin offerings have become extremely common. Throughout 2017 there have been many ICOs that have attempted to defraud investors and separate them from their crypto.

While performing due diligence on each and every investment is essential, there are a number of obvious red flags that can be used to identify fraudulent initial coin offerings quickly and effectively. In this article, we’ll outline the six most obvious signs that an ICO may be fraudulent.

Many initial coin offerings propose an open-source platform that makes its code available to the public. If an ICO proposes an open source platform but doesn't offer a repository link, such as GitHub- or the repository is empty- this is a key sign that it may be fraudulent in nature.

Open source platforms upload their code to repositories such as GitHub to allow the public to audit their development process. Individuals that possess blockchain programming and development knowledge are able to assess the code published by these platforms and determine whether they are valid or not.

One of the most clear-cut signs that an initial coin offering is a scam is a complete lack of detail on how the underlying technology that drives it operates. It's not necessary to be a programming guru to assess the veracity of open-source blockchain projects- simply checking whether a project has uploaded files to a public repository is an effective method of determining whether it has a functioning product or not.

If you’re not sure whether the code provided by a platform is legitimate or not, there are many forums- such as Reddit- that provide in-depth discussions on the specifics of open-source blockchain platforms that serve as an accessible entry point to the finer technical aspects of ICO assessment.

Blockchain technology, while highly innovative and disruptive, is not ideal for every use case. There are many ventures that have no use for tokenization or distributed ledger technology. While this may seem like an obvious point, the massive hype surrounding blockchain tech can make it easy for unsuspecting investors to be led astray by slick marketing.

Many initial coin offerings present compelling arguments in their white papers, outlining massive markets that could potentially be massively disrupted by blockchain tech. It's important to assess whether there is a real use case for blockchain technology in any project- even successful platforms like Steemit, which pays users for contributing quality content- could likely function by using an existing cryptocurrency such as Bitcoin.

When assessing an initial coin offering it's important to ask yourself whether you believe the project truly needs a blockchain or a native token. If the answer is no, then it's highly likely that the ICO in question is a prime example of "solutionism", or using crypto for the sake of using crypto, or potentially a scam.

One of the most important steps in performing your due diligence when assessing an initial coin offering is determining who is behind the project. Regardless of how attractive an investment opportunity is or how large the market it targets may be, the success of an initial coin offering hinges on the quality and composition of the team creating it.

Anonymous developers and platform founders is a massive red flag. If an ICO has not named any full-time developers, or if the leaders behind the project have little to no experience in disruptive technology, then it's likely that the platform will fail. If there is no information available regarding the team at all, avoid the ICO at all costs.

When assessing the experience of an ICO development team, it's important to take a look at the social links provided by the project, such as LinkedIn profiles. While it is possible to fake these profiles, most LinkedIn users provide details on their prior association with companies and universities that can be independently fact-checked with third party sources.

Many initial coin offerings leverage the knowledge of an advisory board in addition to a development team. It's essential to check the experience and veracity of these individuals as well to ensure they are legitimate.

The mining structure of an initial coin offering is not a foolproof way to assess the legitimacy of a project by itself, but cross-referencing the data points provided by a project on the supply schedule of tokens can be a powerful method that illuminates the intent of the project leaders.

Premining is a term that refers to tokens that are created and made available to a small group of individuals before a token sale goes live to the public. In some cases, this process is used to reward early investors and developers. If the total amount of tokens reserved for a pre-mine is disproportionately high, however, this is a cause for concern.

Paycoin, for example, was an initial coin offering in which the founder was found guilty of operating a $9 million fraudulent scheme. The majority of tokens in the Paycoin ICO were reserved for the development team.

If an initial coin offering heavily favors the development team, then it's likely that the true intent of the project is to maximize the personal financial gain of team members from the appreciation of token value, as opposed to maintaining the proposed blockchain network over the long term.

Most initial coin offerings provide potential investors with a detailed chronological list of their development and funding goals. If a project doesn't provide a clear road map, then it's likely that the developers and project leaders have no solid plan for the future- which is a key red flag that the project is a scam.

If a project delivers no comprehensive road map and reserves a significant amount of pre-mined tokens for the development team, then it's almost certain that the project is driven by short-term financial gain. Many initial coin offerings also provide investors with a Telegram or Slack channel that can be used to communicate directly with the development team and ask questions or access periodic updates.

It is possible, however, for scammers to create fictitious timelines or deliver fake updates via chat channels. Always assess multiple factors when attempting to determine whether an ICO is fraudulent to not.

When assessing ICOs, Occam's razor is a highly effective tool. In most cases, the simplest explanation is usually the correct one. Applied to ICOs, if something appears to be a scam, it probably is. If you feel as through a platform may be a scam, then it's probably best to refrain from investing.

In some cases, the website for an initial coin offering may appear under-developed or fail to deliver comprehensive information because it's still in an early stage. In the earliest stages of an ICO it can be difficult to determine whether it is a scam or not.

Often, these platforms can be both. If you’re unable to find detailed information regarding an ICO, then it's best to wait until more information becomes available before investing. Often Russia or Asian-based initial coin offerings provide scant information until bounty projects can deliver an English translation, which is an understandable delay.

The most critical source of information on any ICO is the white paper. A white paper should outline the mission of a project, its technical aspects, the details of the team behind the project, token generation and distribution, and any other details that are relevant to the project.

While amateur investors may find white papers somewhat daunting, it's not necessary to possess a technical background in order to understand every single line of a white paper to determine whether it is legitimate or not. If you’re investing in crypto, however, it's important to possess at least a basic understanding of how distributed ledger systems work.

Many high-level projects provide white papers that outline the details of a project in addition to a yellow paper that provides highly technical information. Good initial coin offerings often also deliver a "one pager" that delivers a succinct high-level summary of the project in relatively simple terminology.

ICOs are the new craze in tech and the business world in general. From startups looking to raise funds to venture capitalist firms and even huge Fortune 100 companies, everyone is jumping on the ICO train.

This is not surprising seeing as it has proven to be one of the easiest and least scrutinized way to raise funds for projects, products and to a lesser extent, personally enrich some shady individuals.

It's very easy to launch an ICO, thanks to ethereum's platform which makes it very easy to create ERC-20 tokens. And when you think that in 2017 alone, over $5 billion was raised from ICOs, you’ll understand how difficult it is to pass up the opportunity to get in on it.

Some of the most funded ICOs in the world have attracted a ton of cash from investors. Whether they live/lived up to their hype is an entirely different discussion. Let's examine them all.

The biggest ICO of them all, the token sales started in June 2017 and lasted a whole year ending in June this year. With a revenue of $4.1 billion, this is by far, the biggest blockchain based ICO in the world.

Launched by Block.one and going head to head with ethereum, this project is poised to be one of the world's biggest smart contracts platform. The project hopes to become a better version of ethereum by eliminating ethereum's scalability issues.

In fact, EOS is often referred to as the Ethereum of China. The bulk of the investment was from Chinese residents who figured that a project of that magnitude was sorely needed in the country.

The EOS token, initially created and running on the ethereum platform, now runs on its own blockchain network.

One of the world's most popular encrypted messaging apps, this ICO raised $1.7 billion for the company. Unfortunately, the ICO was done privately, thus preventing the general public from participating like they did with EOS.

Proceeds from the venture is to be deployed to the Telegram Open Network (TON) and powered by its GRAM token. This blockchain network is hoped to redefine transaction speeds by eliminating scalability problems that will help it process millions of transactions per second.

This ICO was successful in part because Telegram is a well-known company, thus making it very easy for venture capitalists and hedge fund managers to get in on their blockchain project.

However, because the project is a very ambitious one, many seasoned blockchain investment analysts and experts passed on the private sale of the token. Ultimately, this ICO did well because there a lot of big name VCs and hedge funds investing in it. We’ll see what the future holds for the project though.

A gambling based token sale, this ICO raised a whopping $320 million to fund a floating casino in Macau. While the $320 million was short of the $500 million initial target, it was still a huge success considering the circumstances and the selling point.

The token which is called the Dragon Coin token is used by high end gamblers in Macau and appreciates or depreciates based on the success of the gambling enterprise. It's actually interesting that this project succeeded considering its rumored ties to gambling mafia and shady consulting firms.

Clearly, the appeal of ease of fund transfer and very low transaction fees is irresistible to gamblers who often feel they are being shortchanged and fleeced by money transfer middlemen.

Anyone looking to launch an ICO in gambling space might want to look into some of the key problems and inconvenience that gamblers face, and solve it through their own services.

One of the most popular crypto exchanges in the world, Huobi's ICO raked in a decent $300 million. This sale was for its own native HT token, and followed in the footsteps of other exchanges that had done the same.

In keeping with similar tokens, its sole purpose is to help reduce transaction fees on the platform. Traders are more than willing to get discounts and save money on trading fees on all exchange platforms.

This is why the HT token enjoyed massive adoption among existing and new users on the crypto exchange.

Launched by Hdac, a South Korean based tech firm in 2017, this ICO generated $258 million. The company hopes to put the funds raised to developing what they call the world's first blockchain based Internet of Things contract and payment platform.

If this project succeeds, this would see Hdac as the first company in the world to help IoT devices truly connect, by integrating processes like ID authentication, communication, payment processing and data storage.

The company hopes to do this by simply creating its blockchain platform that's dedicated to smart contracts and improving scalability.

Combined with its initial $52 million cash injection from multiple VCs, Filecoin went on to raise another $257 million when it launched its ICO.

The project's goal is to build a decentralized, highly secure, p2p cloud storage platform. It was successful because of its initial backers followed by its compliance with SEC regulations on ICOs.

In fact, it is the first ICO to comply with the SEC's new ICO regulations in the US. This, combined by its real world application and solution to a huge problem that many people face, made it an automatic winner.

It was able to raise the huge sum in just 30 days, which means if it had been allowed to go on for longer, it would have probably raised a lot more.

While there are so many more projects including honorable mentioned like Tezos, The DAO, Bancor and Sirin Labs, the aforementioned are really the most impressive.

All of them had great backing, solved real world problems, had massive reach and attained decent adoption. The rest of the somewhat successful ICOs are lacking in one or more of those parameters.

So, if you’re looking to launch your own ICO, make sure that it checks all the boxes. It's the only way to succeed and raise decent funds.

Initial coin offerings (ICOs) are fast becoming the order of the day. Startups, VC firms and even regular companies are using it to generate extra revenue for their projects.

For investors, ICOs can be a pretty great investment vehicle, often netting them significant returns on investment. However, because of the largely unregulated nature of initial coin offerings and the cryptocurrency market itself, investing in ICOs can be very risky.

As of now, it's still the wild west, where just about anything goes. Of course, the Securities and Exchange Commission (SEC) is doing its best to crack down on some of the scam ICOs available.

But even that isn't as effective as directly shutting them down. What they are doing is simply notifying the unsuspecting public of the scams and hoping that they pay attention.

Unfortunately, people realize they’ve been duped a little too late, owing to the sheer number of coins the SEC has to vet.

The best solution to not getting scammed is to understand what you should and shouldn't do. As with all new technologies, cryptocurrency investing is still largely uncharted waters. You don't know what you’re getting into, you just hope for the best.

Sadly, this approach to investing is defeatist and risky at best. Even shrewd and intelligent people are getting scammed through this strategy. Why would you just give away your money without doing any due diligence?

Yet, this happens every day, with people being scammed and shady ICO founders walking away with millions of dollars.

This article hopes to show you what you should do and not do when it comes to investing in ICOs. You need to be smart about your investments, learn how to identify real projects, and more importantly, the profitable ones.

The first thing you need to check for is the project backing the token sale. Does it have real world application? Is it practical? Can it truly solve a problem? Or is it just hot air? Is the project really viable?

These are the first few questions to ask when you’re thinking of investing in an ICO. You should always verify its real world applicability. Most scam ICOs aren't very detailed about the projects, so you won't really find a lot of substance.

The one thing you will find though, is claims that the project will "change the world", "disrupt sectors", "is a revolutionary technology" and so much more. Don't fall for those claims if you cannot identify a tangible real world problem that it solves.

Someone once said that the universe often gives the same ideas to multiple individuals at once in the hopes that at least one of those people gets it done eventually.

The reality is that for every ICO backed project, there's at least one competitor doing the same thing –or at least one that has attempted it before.

So, do your due diligence and make sure there's healthy competition geared towards solving the same problem. Competition inspires commitment, drive and completion.

The reality is that some projects are just at the idea or beginning stages, and the ICO founders depend on the funds raised from the ICO to initiate and fund the project.

The problem with this is, most newbie investors don't know how to differentiate a concrete idea from a fluke. Here's a tip on how to do that: look around and see if someone else is trying to do the same thing, and see how theirs is different from your intended ICO.

As a rule, be extremely cautious about pioneering solutions or tech. While they can be quite profitable if you get in on the ground floor, they are also possible investment black holes.

If you’ll be investing in any tech like that, make sure that you have all the information necessary to make a very informed decision.

So many ICOs are lacking in this one characteristic. Little wonder almost all of them are scams and fraudulent schemes.

Many of these have websites that tell you what they want to do, but little or nothing about the person(s) spearheading the initiative, their teams, how they intend to utilize your funds and so much more.

There's little or no transparency about them and they are also difficult to verify. So, do make sure to check for transparency indicators like the name(s) of the founders, team members, experience and so on.

Also, go check their profile on ICO ratings sites, look for expert opinions, possible whitelisting status and KYC approval.

Who is running the ICO? Who are on the team? What's their experience or pedigree? How many successful projects have they run? How much industry experience do they have? These are just some of the questions that should be answered on the ICO site.

Please note that some scammers are now using the names and pictures of people with pedigree on their sites and claiming they’re on their team.

So, endeavor to reach out to those "team members" successfully to verify the authenticity of the website's claims. ICOs are likely to yield higher returns on investment if the teams running them are experienced and qualified.

Do check for the ICO's legitimacy in your country of residence and familiarize yourself with your country's regulations regarding ICOs.

The SEC for instance, hasn't really taken a stance on ICOs and cryptos as securities, and has warned Americans about the possible risks associated with crypto investing. China on the other hand, has placed a ban on ICOs, so their citizens who invest in them, do so at their own risk.

While it hasn't placed a ban on all ICOs, it has red flagged a few. Go check for SEC releases, reports or notices about your intended ICO. If there's any negative report, it might be best to skip it.

Roadmaps and whitepapers give you an idea of the project's timeline and information. Whitepapers provide in-depth information about the project, often containing exhaustive details about the project.

You should familiarize yourself with reading interpreting the information in the ICO's whitepaper. This way, you’ll have a more solid grasp on the project and its potentials.

Check to see if there's already a working product or service. Many of these will probably be in the beta testing stage.

An ICO with a working product is always a safe investment and will guarantee returns on your investment. This is usually the best ICO to invest in as you know the company is serious and the team is committed to seeing the project to completion.

These are essentially, the opposite of everything we listed above. But, if you want specifics, the following tips should help:

This is the first red flag. Many scam ICOs tend to overhype their projects –that's if they even exist in the first place- without telling you exactly what it is and what it hopes to achieve.

So, take your time to read the website and see what solution they intend to provide. As a rule, avoid ICOs that sound like they want to do everything. This indicates a lack of direction or project priority.

You want a project that clearly outlines its goals, solutions, projected growth, clear milestones and an indication of what they intend to achieve in the future. Their projects must be tangible and relatable.

Any project that's outlandish or containing so much fluff should be ignored completely. Those tend to be scams.

ICOs are meant to fund projects, many of which are at best, in their infancy or beta testing phases. This means investing in them should be done with the intention that returns will be a medium to long term thing.

So, if you find ICOs promising quick returns, chances are it is a fraudulent scheme designed to enrich the founders alone. Walk away and forget about it.

Of course, this is not to say that it can't make you money in a short while, but that should be more of a ripple effect –probably due to market factors or something- and should be a surprise when it happens, rather than it being a key part of the ICO founder(s) selling points.

At the end of the day, there are just a handful of worthy ICOs in the market. And even then, they are risky investments at best.

The best thing to do is up the odds in your favor so that you are placed in a position where even if the token depreciates in value, you’re not worried because you know its long term value.

Just make sure that whatever ICO you invest in, meets the minimum established benchmarks. Good luck in your investing.

As one might imagine, we have compiled over 1,000 initial coin offering token scams and put them all in a list. Below you will find the title of each ICO we had a review up on, and due to the extreme length each of these crypto token overviews were, we decided to put them in a nice deliverable PDF format for you to download to reference and see a list of all the deadcoins, aka shitcoins as many in the cryptocurrency community and industry call them.