How to check a whitepaper
A whitepaper is arguably the most important document for any crypto ICO. However, the style and contents of whitepapers can vary drastically. We reached out to several crypto industry leaders to find out what they look for when reviewing a whitepaper. Read their quotes and gain valuable insight regarding what aspects of a whitepaper are considered to be the most important, and what some red flags might be. This post is updated monthly, so be sure to check back to see who else has been added and what their suggestions are for reviewing a whitepaper.
- Ami Ben David, Co-founder and managing partner of SPiCE VC: “We specialize in tokenization, so my initial focus is first to see if the project is suitable for our specific investment criteria – in our case, I’m checking if it is delivering a key building block of the blockchain / tokenization ecosystem that we know is missing, or has room for more players and massive growth, or is it a new revolutionary protocol with some following, or a tokenized business which has a unique edge in the market because of the use of the blockchain or the smart use of a token economy. If the basics are not there, its a quick No for us. But if the story does meet our focus criteria, we look at the team (which we need to talk to anyway to form an opinion), what is their story and the way they choose to tell it, and I try to compare the big vision and big words with how much they actually achieved in terms of execution in the time they had to spend on the project so far. If it all makes sense, I schedule a call.”
- Ofir Beigel, Owner of 99Bitcoins.com: “I make the same suggestions to crypto investors and blockchain startups alike. Look at the team, the tech, and the market. Additionally in the white paper look for an alignment of interest. What are the long and short team motivations for all stake holders? Are the interests of the founders and advisers in parallel with the large investors and are they in line with the users of the platform, protocol or service? Even before the blockchain the old adage of “follow the money” provided an enormous amount of insight. For example: Are the issuers offering discounts or bonuses? Are they transparent about this and are they putting in vesting or lockout periods? Some founders check the box saying “yes we have a vesting period so investors cannot flip the token.” But when that vesting period is only three months and the first deliverable is four months out, that is pretty much worthless.”
- Lou Kerner, Partner, CryptoOracle: “While we take a holistic view of projects, for CryptoOracle, the team is the most important aspect of the Whitepaper. We actually use machine learning/AI to help us evaluate teams. We are also very focused on the problem being solved and the role the tokens play in that solution, starting with, does the solution really require a token (and blockchain)? Then we look at token economics to ensure the token economics align the different players in the ecosystem. Governance is critical for decentralized projects. We also look for realistic roadmaps. For the most part, poorly written Whitepapers are more hurtful to projects than well written Whitepapers are helpful.
- Motti Peer, Co-CEO of Blonde 2.0: “We receive hundreds of whitepapers, and as most investors with little time, I review many of them. With this being said, if the whitepaper does not immediately state the company’s purpose and process, chances of continuing to read them are slim to none. With so many white papers, it’s crucial to remain relevant by stating and emphasizing the clear message of the company and its product. This is the difference that can make or break successful projects.”
- Yaniv Feldman, Co-founder & Chairman, Cointelligence: “Today’s whitepapers are different from what they used to be in the past. Satoshi’s whitepaper was nine pages and was almost entirely technical. Today’s whitepapers are 30-80 pages long and are full of marketing info, roadmap, team and investor offering. While Bitcoin is very different from today’s ICOs, I still try to focus on what matters. I try to understand if the company is solving a real problem, for a real, big-enough, relevant market, instead of just building a “decentralized” solution to the same problem other have solved centrally without any relevant additions (besides so-called decentralization) or a made-up problem that doesn’t really have a real-life, big enough use case to sustain the existence of such a project. Most project fail at this level. If a project passes the first stage, I take a brief look at the team and try to understand if their token economics structuring makes sense (how many tokens, inflation rate, built-in incentives to stakeholders, consensus mechanism, etc).”
- Eric Turner, Research Lead, Messari: “Whitepapers are still the best way to gauge how well a project will execute. I have learned it is best to skip to the end and see who is leading, advising, or investing in the project. With that in mind, start from the beginning and don’t skip the “fluff”. This is often dismissed as marketing speak but can give you a good idea of how realistic the project is. High hopes are to be expected, but if a project thinks they can overtake multiple existing markets or only want to offer a slight change to existing solutions, you should put on your skeptic hat. Be more skeptical if the team and advisors have limited experience in the space. Give the technical details a good read but realize that anything too technical is a distraction. A great whitepaper will address the “why” and the “how” of a project. Most projects today want to be the AWS, Uber, Airbnb, eBay, Facebook, etc., of the decentralized world. The “why” is how you will be better than these solutions. The “how” is even more important. The best whitepapers will give details on how their solutions will outpace competitors, gain a community, and incentivize developers. A detailed roadmap is something to look for. Even though whitepapers are early-stage ideas, having a defined timeline for development is important. If you really want to understand a project look at who is running it and map that against how feasible it is they can execute on their goals.”
- Melanie Mohr CEO and founder of YEAY, Creator of WOM: “When reviewing a whitepaper, I look for the following: simple, concise language that cuts to the point quickly – there’s absolutely no point filling up the word and page count for the sake of the thud factor. A well articulated and watertight vision – I need to see a clear and inspiring concept that I can get behind. Credibility and expertise – I need to feel faith in the team behind the idea. User experience – does it have a good UI/UX? Technical detail – what’s actually being built and what’s the go-to-market strategy. It’s easy to say “this is x, built on the blockchain, to disrupt y” but how will it actually do this?”
- Martin Wos, Co-Founder, Co-CEO and CVO of Block Stocks: “Firstly, the validity of the business model. The model should make economical sense. If an idea already exists, not important if off- or on-chain, a new idea have to be 10x better. Just because an idea is decentralized, does not attract clients. Think from a client’s perspective. Then, start looking at how the technical components (technical whitepaper) and the token sale structure. Under which conditions does the currency appreciate in value and why? What are the underlying drivers and do I fully profit from it or are there any constraining conditions? Also do research about existing business models. What are the differences, advantages and disadvantages of similar business models.”
- Evgeny Ponomarev – Co-founder and CEO of Fluence: “First of all, you have to understand the difference between the Whitepaper and Primer. The first is a technical document while the latter is for pitching. Since the decentralized technology landscape is yet full of “terra incognita”, don’t expect the team to answer all the questions, but at least they must understand the challenges that exist and the obstacles they face. The best way to understand how a proper whitepaper looks is by reading ones made by great, successful projects: IPFS and Filecoin, Plasma, TrueBit, Polkadot — these served as an inspiration for our team.”
- Dr. Omri Ross, CEO of Firmo Network: “When reading a whitepaper, I always look for academic rigor. Is the paper describing an existing product or does the team have the skillset to execute on the vision depicted in the paper? Does the product cater to a relevant niche and is the business model and go-to-market-strategy carefully designed to suit the customers needs? If the product is distributed or decentralized, has appropriate measures been put in place to provide a feasible governance model?”
- Sharon Shineberg, In-House Blockchain Maximalist at Blonde 2.0: “When I first read Satoshi’s white paper, I could not sleep many nights. I was up restless and obsessive over bitcoin. In my experience, I can only compare this occurrence to the ‘rabbit hole effect’ from Alice in Wonderland. From afar, there’s a dark hole in which another world exists; once you’ve stepped foot in the hole, there is no turning back. Curiosity is contagious, and this is the exact effect I am looking for when reviewing white papers.”
- Dror Futter is a Partner at the Rimon, PC law firm: “Whitepapers should provide a description of the regulatory compliance of the token. At this point in time, any ICO claiming to be a “utility token” should be viewed very skeptically. Potential token buyers should be very leery of overinflated legal claims. For example, many ICO’s claim to be issuing “SEC compliant” tokens with little explanation of the basis of this claim. This is critical because at this time, there is not a single ICO that has received the express approval of the SEC. In other instances, whitepapers identify the prestigious law firms ICO’s have hired and leave it unclear what advice they received. Our firm was approached by an issuer three days before their ICO after their global law firm withdrew from the representation. Their whitepaper still said they had consulted with the firm – which, while technically true, was also misleading. Potential token buyers should also look for details about how the tokens will trade after issuance and what the issuer will do to ensure ongoing regulatory compliance. While ICO issuances have gotten all the press, the after-market trading poses as many regulatory issues.”
- Jonathan ben Shimon, CEO of Matchpool: “It is more important to look at the formation and the architecture to determine whether it is original or not. I care more about new architecture and existing technology than about those who are trying to force the economy on our business.”
- Liron Langer, Chief Investment Officer at Nielsen Innovate: “Based on experience and involvement in subsequent projects, the most important factor is the team, and in particular, do they have true understanding in Blockchain technology and DLTs (Distributed Ledger Technologies), and fully comprehend the token usage, utility and value model and whether the cost of the challenge they address significantly lower than the benefits the adoption will provide. In addition, it’s important to look at what the team has achieved so far, the use of funds and how the economy will interact with the token once it hits the market. I am glad to see that the market evolves slowly but surely, towards addressing real challenges in a much more professional manner.”
- Jon Buck, President, B&B Content Management: “Think of a young person going on their first date. They spend hours making sure that they look their very best – picking outfits, fixing hair, agonizing over every detail. Why? They want to attract the person they are meeting. The same is true with a whitepaper. Investors who look at a whitepaper are ‘dating’ the company. To attract the best investors, the whitepaper has to look its best. Typographical errors, broken English, punctuation and grammar mistakes – these are like massive red flags to investors that the company is not mature enough to even clean up on a first date. If a whitepaper is clean, well written, properly edited, with excellent grammar, it shows a care and consistency that makes a company investment-worthy. Companies that don’t take the time to produce a professional whitepaper only prove that they are not professional, and generally, destined for failure.”
- Adi Karmon Scope, Founder of Fractal Boutique: “When I review a whitepaper, I’m most interested in the token economics section. The reason is that a company must justify the creation of a new token, if it would like to embark on the ICO route. If I’m convinced that a new token is indeed needed, then this means that the idea and eco-system are much larger and more valuable than the company itself which is conducting the ICO. Most of the whitepapers I read are vague about their economy and lack lots of details about how they’re planning on creating intrinsic value to their token. A healthy economy is about creating new value, which is captured via the token and not about only creating artificial scarcity.”
- Chad Pankewitz, CEO of Coinage: “Evaluating crypto and blockchain companies can be done in a similar way to how a venture capitalist would evaluate an investment. Here are a few things that we look for when reading a whitepaper: Will the company’s main product be useful? What problem will the company solve? Do they have a great vision for their company and for their products in the market? Is the product and the technology truly great? Do they have the team to execute the vision? Does the project have traction – in terms of product readiness, users, community, and revenue? Who are their competitors? To be able to do our own research, I want to be able to understand from their whitepaper where they fit in the market; such as, are they a cryptocurrency, blockchain platform, or a protocol? Furthermore, if they are a cryptocurrency, are they a privacy coin, a stable coin, to be used for fast payments or just a storage of value? The more drilled down the categorization is, the better we can understand the competition and evaluate accordingly. Last but not least, longevity is one of the factors that you want to be certain of after reading a white paper: Will the product and company have a good chance of succeeding over the long term in this space?”
- Adi Ben-Ari, Founder and CEO of Applied Blockchain: “There’s an old joke about the physicist, the chemist, and the economist stranded on a desert island with a single can of food. How are they to open it? The economist’s answer is, ‘Assume we have a can opener.’ The joke should be updated for the Cryptoeconomist. Check the technical and token economy assumptions made in the whitepaper, look out for bold assumptions about technology that doesn’t exist, or gaps in the token economy model. A few more important areas to consider are the idea and solution that they are proposing, is the company creating something new, or just building an existing technology? Also, in regards to the token, whilst reading ask yourself, does this solution need a token? Is what they are proposing really a blockchain solution from the ground up, or simply a regular tech startup looking for funding by issuing a token? Most tokens are generally created as a utility token, so the question needs to be, does this serve as a true utility or has the token been added to the solution so they could raise capital through an ICO? And lastly, in terms of competition, is this solution part of a dozen others that are already successful, or is it different enough to add value to the blockchain ecosystem?”
- Tai Kaish, CEO of Wemark: “Traditional investors get a chance to do their due diligence by meeting the founding team and asking in-depth questions. The whitepaper is often the only way for ICO investors to evaluate the company, its product, and future plans. When reviewing a whitepaper, investors should compare the associated risks of the project, to the potential gain. Projects will usually outline the market size and opportunity early on. Realizing the risks, however, is something each investor has to do on his own. Each key factor presented in the whitepaper (team, product, token economies, roadmap, competition, etc.) might hold potential risks and prevent the projects from reaching its goals. Following deep research, investors should support projects that demonstrate the lowest risk along with the biggest potential outcome. It’s great when teams get technical and explain how their protocol works with code samples and architecture flowcharts. It’s easy to get carried away in technical descriptions, but it’s crucial to understand why people will want to use it, not just how it works. For some projects – marketing, sales and UX are more important than expertise in smart contracts or blockchain development.”
- Johnny Kolasinki, Head of Media at XYO Network: “The first thing I look at when reading a whitepaper is the project’s purpose. Are they solving a real problem? Does a blockchain-based solution to this problem make sense? I’ve seen projects that had amazingly innovative implementations of blockchain technology or DLT; however, they were trying to replace existing platforms without actually addressing any flaws in the models that are already in place. If a project is going to compete with existing technology, it needs to clearly lay out how it will either augment or improve upon what’s already out there.”
- Mark Vermeeren, Global Marketing Manager of MobileBridge Momentum – “For us, one of the most important aspects of a whitepaper is that it correctly communicates the value of the service or product. No matter how well written, how awesome the design of the paper is, or how cool the graphics used look, the offer needs to be strong. Additionally, the reasons indicating “why blockchain” or “why an ICO” should provide an understanding of the product or service’s USP, and specify the way it changes the paradigm of its respective market. Naturally, investors and crypto enthusiasts will consider funding a project whose likelihood of success is high; so, in order to properly assess the value proposition, it is important to also detail the competitive advantages, and the specifics that relate the strengths of the solution to the market dynamics.”
- Darvin Kunaiwan, CEO of Crowdvilla: “The first thing that I would look for is the problem area that the project aims to solve. After that I’ll look at the detail surrounding their token economy: what does the token represent, how will the token retain value and how will the token be distributed initially. I’ll come up with my own conclusion on whether this type of token will be considered as securities or otherwise, which then allows me to see whether the project is being done in a legally responsible way. Next I’ll look at the team – not so much on finding hyped up factor (personally I don’t believe ex-big mnc matters much in this case) – but more towards seeing that there are indeed real people fronting the project, and that it is not an elaborate scam. Finally, if applicable, I’ll look at their basic approach from the technical point of view, on whether it makes any sense in achieving what they set out to do.”
- Avishai Shoushan CEO of Carats.io: “When you review a whitepaper there are several crucial issues that must be addressed. For us, the things that are most important for reviewing the project through it’s whitepaper is the order of the content, while looking for the known entity, team and partners who stand behind the project and the token. Another important criteria is the token usability, while asking if there is a real need and use for the token, except for fundraising. The last aspect is the technology and value standing behind. In which stage the company is in, regarding technology if it is deploying, alpha, or beta and what will the token bring considering it’s long term value, beyond of speculation.”
- Ran Avidan, Founder & CTO of Mobilechain: “The first thing I look at when reviewing a whitepaper is ‘The Team’ section. Do they have past experience building and creating a new business in the targeted industry? The Mobilechain team has a lot of experience in the mobile industry, so we try to focus on that in our whitepaper. The next thing I look at is the solution itself and if blockchain is really needed to solve the issue. There needs to also be business potential in the idea. Like every investment, I expect to see a bit of market research and thought into how the solution will make an impact.”
- Barak Ben Ezer, CEO of Neema: “My advice for reading a whitepaper: I’m more interested in projects that solve the three underlying barriers to adoption: (1) interface, volatility and solving the legal status of crypto (what we are doing with SOV.Global), (2) looking for impressive team more so than impressive advisors, (3) explain to me what you’re doing in the first paragraph. The more concise and clear the better. Long convoluted is explanations and lots of fluff are a red flag. I’ve noticed that geniuses are typically people who can explain very complex issues in very clear terms. Satoshi’s bitcoin white papers from the 2009, was nine pages of pure gold. Less is more.”
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Frequently Asked Questions
What is Cointelligence?
Cointelligence was founded in 2017 to bridge the information gap in the crypto economy. It creates relevant tools for investors, namely an impartial and accurate ICO list and rating system. Cointelligence is a market maker focused on bringing the blockchain technology and cryptocurrencies to the masses through the use of fundamental economics, real-time market data, technical analysis, and great industry coverage.
Cointelligence is dedicated to creating a platform that is honest and trustworthy. In order to help users view the market as a whole, our team of writers use their knowledge of the market from all angles to create relevant, informational articles and guides that analyze the cryptocurrency ecosystem and explain it to our audience.
What is the main goal of Cointelligence?
Cointelligence strives to open the blockchain and crypto industry to the masses in an open, transparent, and fair manner.
How do we exercise due diligence at Cointelligence?
At Cointelligence, we exercise due diligence by treating every single token as a research subject in its own right. Our research team collects data on each and every token, coin, ICO, and organization in order to obtain the most profound and authentic data in the cryptocurrency market. This data is then passed to our team of crypto experts, who review our research team’s findings from a wider scope. Using both the research and the review of said research, each ICO is given an impartial and objective rating and risk score. This analysis is then presented to our website’s users.
Who are the people behind Cointelligence?
Our entire team can be found HERE.
General Questions About the Industry
What is cryptocurrency?
A cryptocurrency is a digital asset which is used as a medium of exchange. Cryptocurrencies utilize powerful cryptography algorithms to promote the security of financial transactions on a peer-to-peer basis, control the mining or the minting of additional currency units, and verify successful completion of transfer of digital assets. Cryptocurrencies represent a unique form of digital currency, alternative currency, or virtual currency. Cryptocurrencies enjoy distributed, or decentralized, control. This is in direct contrast to centralized digital currencies and central banking financial models. The decentralized nature of a cryptocurrency relies on the distributed ledger technology, typically a blockchain, that represents a record keeping system. This system secures the identities of users in a pseudo-anonymous form, their owned cryptocurrency balances, and all executed authentic transactions that took place among users of the network.
What is a blockchain?
A blockchain is a special form of an ever growing list of records, known as ‘blocks’, which are linked together using cryptography algorithms. Public (permissionless) blockchains are utilized by cryptocurrencies. Data stored onto the blocks of public blockchains can be accessed by anyone. Private (permissioned) blockchains are utilized by businesses and rely on an access control layer to determine who can access data stored on the blocks of their private blockchain.
On any blockchain, each block includes cryptographic hash of the proceeding block. Data is recorded permanently onto a blockchain and cannot be modified. When used as a distributed, or public ledger, a blockchain is usually managed by a peer-to peer network of nodes (computers or servers) that communicate with each other via a unique inter-node communication protocol. As new blocks are generated and validated, they are broadcast to all nodes across the network. These nodes then keep a record of all information stored on the blockchain.
What makes cryptocurrency blockchains so special ?
Cryptocurrency blockchains have certain characteristics that make them special:
- Borderless – there is no distinction between any country.
- Decentralized – there is no central point of control, such as a central bank authority or government.
- Immutable – you cannot censor, freeze, or cancel transactions.
What is a token?
A token is a type of cryptocurrency that represents a particular asset or utility. Such an asset can reside on top of another blockchain. Tokens can represent any interchangeable and tradeable asset.
What is an altcoin?
“Altcoin” is an abbreviation for “alternative cryptocurrency coins” and refers to any coin other than bitcoin. Altcoins are usually referred to simply as “coins.”
What is an ICO?
An Initial Coin Offering (ICO) is a means of seed funding and crowdfunding used to raise capital for a startup or other project through the issuance of a new cryptocurrency or cryptographic token. These new cryptocurrencies or cryptographic tokens are issued via blockchain technology. Not all cryptocurrencies or ICO tokens are issued on new blockchains, as most of them are created using other well-established blockchains, such as that of Ethereum.
What are smart contracts?
Smart contracts are digital, self-executing contracts that contain the terms of the agreement between the buyer and the seller in the contract’s code. Smart contracts are kept inside a distributed, decentralized blockchain network which makes them transparent, traceable, and irreversible.
What are exchanges?
An exchange is a platform on which one cryptocurrency can be bought or sold for a specific, ever-updating price. The price is determined by free market rules (i.e. supply and demand). An exchange is also used in order to convert fiat money, such as USD or EUR, into cryptocurrency. There are currently thousands of coins traded over numerous exchanges. Altcoins are mostly traded via Bitcoin or Ethereum. In other words, users have to first purchase Bitcoin or Ethereum to be able to buy most altcoins. To exchange altcoins to fiat currencies, traders will usually have to sell them first to Bitcoin or Ethereum, before being able to exchange them for fiat money.
What is a whitepaper?
A whitepaper is an in-depth report that a blockchain-based project, such as an ICO, produces to present necessary information about the project to others. A whitepaper should include the origin of the project and the vision that leads it, the product and how will it be used, market and competitor analyses for the project’s field, and the team that created the project. The whitepaper should include information about the technical details, terms, usage of the tokens or coins of the blockchain-based project or ICO. Investors rely on whitepapers to evaluate various blockchain-based projects and identify which projects may be potentially profitable.
What is ROI?
ROI is an abbreviation for “Return On Investment”. It is a measurement used to express the investment’s profitability.
General Questions About Cointelligence’s ICO List
How can an ICO get published to this list?
Regular listing: In order to include your ICO on our list, please fill out the form found HERE. Every ICO that enters our system is thoroughly vetted. This process is completed by Cointelligence’s research team. During this process, our research team gathers all of the information regarding the ICO and validates it.
Premium listing: Cointelligence offers a premium package for ICOs. This package includes the following:
- Diverting more user traffic toward the ICO’s site by appearing higher on our ICO list and having more features on the ICO profile page.
- Getting researched and evaluated faster.
In order to purchase this package, please contact us at info@Cointelligence.com
IMPORTANT NOTE: Purchasing a premium package will never affect the rating that an ICO receives.
How can the information on an ICO profile be changed or updated?
If there are any changes or updates to be done, please send an email to our research team at info@Cointelligence.com. Please keep in mind that Cointelligence presents only valid data and that changes will be made only after our research team validates the proposed.
How can an ICO be removed from the list?
In order to remove an ICO, please contact us at info@Cointelligence.com and specify the reason for your request, as well as a proof that the removal is being requested by all members of the ICO’s team.
Where is it possible to buy an ICO’s token?
Cointelligence is not an exchange platform. Tokens can be bought via the ICO’s official website.
How do I choose an ICO to invest in?
There are many factors to consider when making a decision to invest in an ICO. Luckily, we have written an entire guide regarding this matter. You can find this guide HERE.
Disclaimer: The information provided in this website is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney, financial advisor, or other professional to determine what may be best for your individual needs.
General Questions About Cointelligence’s Rating System
How does your rating system work?
You can find a detailed explanation of our rating system HERE.
What is the meaning of an ICO profile score?
An ICO’s profile score represents the informed opinion of our rating board, based on their research. It is not a guarantee of the success or failure of the project, merely an analysis of all the available facts.
What is the meaning of the risk score?
The Cointelligence risk score is not an indicator for the project’s quality, but rather it is an indicator of the probability that the project will or will not be realized. You can read more about the risk score HERE.
Who rates the ICOs?
Our team of crypto experts rate each ICO. Each expert is a long-standing and well-regarded member of the crypto community. In order to help ensure that our ratings stay impartial and objective, we do not disclose the the identities of our experts.
If you would like to apply to be a crypto expert on our team, please contact us at info@Cointelligence.com.
Can an ICO pay for a better rating?
How can an ICO ask for a re-evaluation or an update of their ICO score?
Please contact our research team at info@Cointelligence.com in order to be re-evaluated. Keep in mind that a score will change only if the ICO has improved its quality in the different fields listed in the rating system. The score is a reflection of the state of the ICO and in order to improve it, the ICO must improve as well.
Frauds and Scams
What are the actions Cointelligence takes in order to protect users from fraudulent ICOs?
At Cointelligence, we follow our own proprietary method focused on deeply researching the ICOs documents, team, and vision. Our method consists of:
- Website and Whitepaper – We go through an ICO’s website and whitepaper, making sure the ICO has both items and that they include the information regarding the ICO’s vision as well as method of realization. During our research we look for warning signs that may indicate a fraudulent ICO, such as plagiarism, an illogical concept, no long-term plan, or use cases that do not align with the main idea.
- Data validation – We make sure the data on the site, in the whitepaper, in social media posts, and in online publications is accurate, original and valid. We also look for a wide range of warning signs, including:
- Fake pictures of team members
- Unrealistic or unchanging values (e.g. amount raised, timers, bonuses, and sale stage)
- Fake wallet address or email address
- Censored, closed, or minimal responses from the ICO’s team to the public’s questions on social media and online forums
- Falsely claiming to be traded on main exchanges
- Having a non-existing smart contract (e.g. on Etherscan for Ethereum-based tokens) or an open-source project that has empty repositories, or no repositories, on GitHub
- Team authenticity – A real ICO must have a team of employees with active social media accounts that details the team members’ experience in past projects. The team must also be willing to perform a KYC process with us. The biggest warning sign here is an ICO with an anonymous team that have no other sign of existence. It is very important that teams are researched in order to learn about their past experience, recommendations they hold in the crypto community, and examples of their work on their social media accounts. Red flags are raised when advisors have irrelevant professional backgrounds or when investors who invest very small amounts of money appear on the main page of the ICO’s website.
- Economically Reasonable – We make sure that the financial model of the ICO is reasonable and logical. Here, we look for the following warning signs:
- Disproportionate distribution of tokens, mining, or earnings that lean toward the development and management teams
- No hard cap, a very large difference between the soft cap and the hard cap, or no refund guarantee
- A promise of success or other guarantee as a part of the ICO
How can I learn more to protect myself from investing in a scam ICO?
There is a lot you can do to protect yourself from scam ICOs. Read more about what you should look out for in the article we published HERE.
How can I report a scam?
If you believe a certain ICO to be a scam, please contact our research team at info@Cointelligence.com.
How Cryptocurrency Regulation Can Affect The Price
Often referred to as the ‘Wild West’ for traders and investors, cryptocurrency markets are continuing to make their name in the world of trading. While some believe that cryptocurrencies are a fad which is not set to last, others have a strong belief that cryptocurrencies are in fact the future of currency. As a result of their increasing popularity, many people are turning to global cryptocurrency trade platforms to trade and invest in cryptocurrencies. However, a number of countries around the world are looking at implementing some form of regulation against these platforms and cryptocurrencies as a whole, with China already banning all access to trading platforms and Japan integrating regulations after recognising Bitcoin as a viable form of currency in 2017. Here, we’re taking a closer look at how cryptocurrency regulation is likely to impact price fluctuations in the market and what the key factors are.
Mere talks regarding cryptocurrency regulations at this year’s G20 summit led many traders to become concerned over whether or not the talks would lead to massive price drops. Cryptocurrencies are already exceptionally volatile and we’ve already seen the impact of what leading political and financial figures can have on the price. For example, when a key figure from the Bank of England and FSB stated that crypto assets do not “pose risks” to the world’s economy, Bitcoin was driven up by $1000. However, the future of cryptocurrencies and their role in wider society is still under much debate, and with G20 not finalising any rules or regulations thus far, traders and investors will be looking closely at what governments are discussing over the course of the next 12 months. Any positive signs could see Bitcoin and other cryptocurrencies spike, whereas negative conversations regarding strict regulations or even an entire ban on cryptocurrencies could result in a major drop in price.
Could Regulation Stabilise Cryptocurrencies?
While the whole concept of cryptocurrencies is to remain entirely decentralised and out of the control of a single entity, some investors and experts believe that some form of regulation could actually help to stabilise the market. Regulation requires an oversight, and if countries follow in Japan’s footsteps, who have put in place a number of self-regulatory bodies not related to the government whatsoever, more people could begin to trust cryptocurrencies further. If more people are trusting cryptocurrencies, then it is highly likely that more people are going to invest in the digital assets. If this occurs, we could see the price begin to be driven upwards sparking yet another bubble – which hopefully will not burst this time.
The Future For Cryptocurrencies
Despite the increased attention given to cryptocurrencies from regulatory bodies around the world, the future still remains hazy as to how and when cryptocurrencies will become regulated. The market grew significantly in a wholly unregulated market as a result of their design, but with an increasing number of hacks and security breaches, regulations may need to be put into place in order to stabilise the volatile market. The industry remains in its infancy, and even despite some of the main currencies’ almost dangerous prices wings, the cryptocurrencies have managed to correct themselves.
As ICOs remain a key concern for many regulators, we could see the focus remain on those instead of cryptocurrencies as a whole for the time being. 2018 will be an important measurement into how regulations are likely to impact the price and the market as a whole, with Japan having already implemented a number of regulations, and with Europe, South Africa and South Korea not being far behind.
Buying your first bitcoins – A simple guide
The popularity of bitcoin, and cryptocurrency in general, has skyrocketed during the past couple of years. The soaring demand for cryptocurrencies has driven their total market capitalization to the moon, exceeding $300 billion at the time of writing this blog post. Even though many people might be tempted to buy bitcoin, the apparent complexity of the process of coin buying and storing renders some reluctant to test new waters.
In this blog post we will present you with a simple guide that will walk you through the process of buying some bitcoin and storing it in your very own wallet.
Creating an online bitcoin wallet:
Before you buy bitcoin, you have to set up the wallet which you will use to store your purchased coins. A wallet in the bitcoin ecosystem is similar to a bank account. Your bitcoin wallet is what you will use to receive, send, and store your coins. There are two forms of bitcoin wallets: software wallets (bitcoin core or desktop qt wallets) and online wallets. Software wallets are inarguably more secure than online wallets. However, using software wallets can be rather hard especially for newbies, who might completely lose their stored bitcoins if they fail to properly store their private keys. As such, for the purpose of this guide, we will show you how to setup an online wallet from blockchain.info.
Blockchain.info is by far the best and most secure online bitcoin wallet provider. With Blockchain.info, you have full control over your coins’ private keys which are never stored on the service’s online server. You can use your wallet to store, send, and receive not only bitcoin, but also ethereum and bitcoin cash.
To create your wallet, follow these simple steps:
- Go to Blockchain.info website and click on the “GET A FREE WALLET” button on the top right corner of the homepage.
2. On the signup page, enter your email and password. Don’t use words or phrases, because these would make it easy for hackers to crack your password. It is highly recommended to use long, randomly generated passwords that include letters, numbers, and special characters. There are many online services that can generate random passwords for you. I recommend using Random.org for generating your password. Generate a password with a minimum of 20 characters, and save it in a safe place. Remember that if you lose your password, you may lose access to all coins stored in your wallet. After entering your password, and re-entering it in the “Confirm Password” box, press the “Continue” button.
3. Right after you press the “Continue” button, you will be logged in automatically to your wallet’s homepage, as shown on the below screenshot.
4. After signing up, you will receive an email from blockchain.info. You have to verify your email by clicking the “YES, THIS IS MY EMAIL” button as shown on the below screenshot. The email will also include your unique wallet identifier, or your wallet ID, which you will use to log in to your wallet. Store your wallet ID in a safe place and don’t share it with anyone.
5. You have successfully now created your wallet. Now, let’s sign out and re-login to make sure that everything is working fine. Press the “SIGN OUT” button on the top right corner of the page. You will be prompted with a window that will present you with your backup recovery phrase which you will use to recover your account if you ever lose your password. The backup recovery phrase is composed of 12 words. Write it down or print it and keep it in a safe place.
6. After writing down your backup recovery phrase, press the “Final Step” button. You will be prompted with a window asking you to enter four random words from your backup recovery phrase as shown on the below screenshot.
Enter the requested words and press “Finish”. A “You have backed up your recovery phrase” message will show up. Press the “Close” button as shown on the below screenshot.
7. Now, press the “SIGN OUT” button again. The login page will appear. Now, enter your Wallet ID and password and press the “LOG IN” button, as shown on the below screenshot.
8. After logging in, your wallet’s Dashboard will show up. You’re now ready to receive bitcoin. To identify your wallet’s bitcoin address, press on bitcoin’s icon on the column on the left side of the page. On the page that shows up, press the button marked “Request” on the top, as shown on the below screenshot.
9. A window will appear displaying your bitcoin address as shown on the below screenshot. You can press the “COPY” button to copy your bitcoin address and then save it in order to use it to receive bitcoin. You can also use the “View QR Code” button to display your bitcoin address’s QR code and use it for simplicity.
You have successfully setup your bitcoin wallet and you’re ready to buy your first crypto.
Buying bitcoin via Coinbase:
Now, we will use Coinbase to buy bitcoin. Coinbase is one of the world’s most popular and secure cryptocurrency exchanges, where you can buy bitcoin using credit/debit cards and bank wire transfers.
1. Go to Coinbase.com and press the “Sign up” button. You will be prompted with a signup form, with two account types: “Individual” and “Business”. Choose the “Individual” account type, and fill in your first name, last name, e-mail, and password as shown on the below screenshot. Use Random.org to generate a random password like you did with your wallet’s password to make it hard to crack, too. After filling in all the details, press the “CREATE ACCOUNT” button.
2. A window will show up asking you to verify your email, as shown on the below screenshot. Go to your inbox, and open the “Verify your email address” message sent to you from Coinbase and press the “Verify Email Address” button.
3. After successfully verifying your email address, login to your account using your email and created password. When you sign in for the first time, you will be asked to link your mobile phone to your account, as shown on the below screenshot.
4. After entering your mobile number, an SMS will be sent to your phone including a special code. Enter the code and press the “Submit” button as shown below.
5. Now, click the “Add Payment Method” button at the top of the page, and then on the payment method selector choose “Credit/Debit Card”. When doing so, you will be asked to complete a photo ID verification process which usually takes no more than 24-48 hours. Next, you will be prompted with the card verification screen, where you will have to enter your credit/debit card information including name, address (it should match the card’s billing address), and CVV code. Coinbase will ask to make two pending charges to your card. Accept the two charges, and then log in to your card’s online account and write down the exact amounts of the two charges made, and then enter those amounts into the appropriate boxes on the card verification window. Now, you have successfully added your card and you will see a window marked “Credit/Debit Card Added” with a button that says “Buy Digital Currency”.
6. Now, you can buy bitcoin with your debit/credit card. Press “Buy Digital Currency” and you will be prompted with a window as shown on the below screenshot. Enter the amount of bitcoin you wish to buy, or enter the equivalent amount in USD. On the below example, we bought $100 worth of bitcoin, which equals 0.01479509 BTC at the current bitcoin price ($6,759). Then, press the “Buy Bitcoin Instantly” button.
7. The amount of bitcoin you purchased will instantly appear in your bitcoin wallet. You can now move it to your Blockchain.info wallet by pressing the “Accounts” button on the top menu, then clicking the “Send” button under your “BTC Wallet”. You will be prompted with a window to enter the amount you want to send and the address you want to send the funds to. Double check that you have correctly entered your blockchain.info address and the amount you want to send before clicking the “Send Funds” button, confirming the transaction’s details and completing the sending process.
Within a few minutes, your bitcoin funds will show up on your Blockchain.info’s wallet along with the number of confirmations it received.
This was a simple guide to help you buy bitcoin, to start exploring the world of cryptocurrencies.
(Cointelligence’s disclaimer: Cryptocurrencies represent a very risky investment, so always trade cautiously and never invest more than what you can afford to lose)