Cointelligence serves as the data layer for the crypto economy. But data on its own does no good when people don’t know how to use it. This is where the concept of “due diligence” comes in. By training crypto enthusiasts and potential investors on how to do their own research, it’s possible to give people the tools they need to protect themselves from fraud and bad decisions.
Let’s look at ICO ratings as an example. On its surface, an ICO rating is a useful tool. It provides the basic facts about an ICO, such as the project’s goals, timeline, soft cap, and hard cap. But it also looks at the quality of the team and the marketing, how many competitors it have, and whether it’s proposing a unique concept that would benefit from being used on the blockchain, or an improvement over existing blockchain solutions.
As such, a single ICO rating serves as a snapshot of the potential worth of a single ICO. But if we look deeper, it can be more than that. Each rating tells us not only what is happening with that project, but also teaches us what we should look for when viewing other ICOs.
It’s hard to decide what is the most important facet of an ICO, but let’s focus on the team for now. Because a team should ideally be made of living, breathing human beings, it’s perhaps one of the most interesting elements of a project. Who are the people behind this thing, and do they have the skills to get the job done?
There are a few ways that looking into a project’s team can help people spot a potential ICO scam. For instance, when there is no team, or the team is anonymous, that can be concerning. Even more concerning is when a team turns out to be made out of imaginary people, cobbled together out of random names and images stolen from around the internet.
A team with little or even no experience in the blockchain or the industry they propose to work in can also be concerning. It’s not that people can’t learn new skills and new industries, it’s just a question of whether you would trust those inexperienced people with your investment. Likewise for team members who don’t have the project listed on their LinkedIn. Are they not really working on the project, or are they so busy with work that they forgot to update their profile?
Doing your due diligence means looking at each piece of the picture and deciding what sort of image it creates. Is a project mostly sound with one or two small elements that could cause concern, or do you find problems with every element of the ICO, the more you research?
This is what Cointelligence aims to teach people. The goal is not to just provide an ICO rating and let people decide based on that whether a project is worthy, but to demonstrate how those ICO ratings can inspire you to do your own research. To that end, CEO On Yavin has spent 2018 traveling to cryptocurrency events around the world, giving presentations on due diligence and how to spot an ICO scam.
The crypto economy is still widely seen as a wild frontier town, and as such, it is up to us to learn how to police and protect ourselves with due diligence and smart thinking.