Are you fascinated by the possibilities of blockchain, and tempted by the potential turnover of ICOs, but afraid of scams and bad projects? We have six suggestions for you to consider.

Invest in valid projects

You want to exclude scams, obviously.

The problem is, that in most cases you don’t know what company — if any — organizes the ICO, because it’s not published. You also can’t easily investigate if the founders are real persons if they have no digital footprint. As displaying a Linkedin profile is generally required, scammers usually set up fake profiles.

What you should watch here is the friends, endorsements, and past history they have, and also if they display the ICO-ed project or not (scams often display innocent professionals as team members, sometimes even Vitalik Buterin).

Invest in valid projects,

which are implemented in the real world

Are the 50th “decentralised financial infrastructure”, “decentralised social ecosystem”, or “decentralized marketing platform” ICOs sound to you like a bunch of buzzwords without substance? Do you have concerns if the world will need 30 different cryptocurrency exchangs? Then find solutions which use the blockchain to something with a real world based purpose.

Invest in valid projects,

which are implemented in the real world,

and found product/market fit

This suggestion looks evident, but hard to follow, since most ICOs don’t have any validation. They are not more than ideas. But if we speak about real world applications, and not blockchain infrastructure projects, it’s unlikely that a new team will dominate the video sharing, messaging, or ecommerce market just because their solution is blockchain based. It’s like 10 years ago, when a lot of companies wanted to disrupt these markets but using mobile apps. A few of them succeeded, but then existing companies also adopted the technology, and kept their market share. Building a real world business on a new technology can be an advantage, but competence and experience in their domain is more important.

Invest in valid projects,

which are implemented in the real world,

found product/market fit,

and the leaders have business history

If someone in his twenties states he can develop the smartest decentralized system of any domain, you may believe it. Think about Vitalik Buterin, he was around 20 when he created Ethereum. But when it comes to building a sustainable enterprise on a global scale, you should except business history from the creators.

Invest in valid projects,

which are implemented in the real world,

found product/market fit,

the leaders have business history,

and the project has a mature business plan

Although Gavin Wood can raise $130 million for Polkadot with a visionary technical description, but you should expect more from usual ICOs. After all, they have to sustain and grow to create demand for the tokens. But most ICO White Papers focus on technology, and forget pricing strategy, marketing and sales plans, let alone a deliberate financial forecast.

Invest in valid projects,

which are implemented in the real world,

found product/market fit,

the leaders have business history,

the project has a mature business plan,

and give it a plus if it has positive social impact.

Making social impact was a core element of blockchain. It promised democratization of the internet, but we got decentralized casinos and trade sites for online game items. But blockchain could achieve so much more to change the lives of people. Think about that: by contributing in a token sale, you participate in the creation of a new world. So choose ICOs which bring closer the world you would like to live in.