What You Need to Know if You Want to Be a Blockchain Investor in China
Different from traditional financing means, ICO (Initial Coin Offering) will tokenize the projects of the Blockchain technology companies. You can also call it a process of asset securitization. But to avoid legal risks, people in China prefer to call it an online crowd-sourcing.
In recent months, ICO has been quite controversial. Some start-ups have raised money quite easily but just couldn’t turn their investment promises into reality. Some of them haven’t even published a whitepaper yet.
To put it simply, the community clearly understands now is still a hype period for both bitcoin and blockchain. Blockcain industry is still yet to be transparent, not to mention ICO. ICO is still a speculation game so investors are facing huge risks. Besides the ability to withstand risks, you need to be more careful to judge various information. Here are some important tips you need to know if you want to participate an ICO in China.
1. Know the founding teams
To invest a Blockchain project, the first thing is to focus the team especially the core members. A capable team will have first level technical and marketing members. Their promotion will be open and firm. You need to question a team if they not sharing their thoughts and project progress in QQ, Wechat, forums and media. Remember, blockchain projects gain trust only by being active and open to discussions on social media, and patient responses to questions raised by investors. Here are some commonly-used website in China where you can check the related information about the company you need to know.
a) news.8btc.com The only English news media for Bitcoin/Blockchain of Chinese Community
b) 8btc.com the Biggest Bitcoin/ Blockchain online Forum in China
c) bizhongchou.com The biggest ICO platform in China
d) www.baidu.com the most popular search engine in China
2. Pay Attention to Project Introduction
You need to read through the whitepaper of the Blockchain projects. Is it a detailed one being able to clearly describe the projects and the problems the projects are going to solve. The mode should be innovative without hype. From the technical angle, a good project needs to possess irreplaceable key technology or function. If you are not a technical expert, then you need to consider the feasibility of the business mode. There are too many projects that are just carried out in the name of Blockchain.
3. History of the Company’s Financing.
Not a few good projects have funded through some agencies and investors. These projects will be more reliable. You had better consult some people who truly know the situation to confirm the financing records. If you find any bogus information, you can basically give up the projects.
4. Financing target and ownership structure
You need to be cautious once you find the start-up set an over high funding target. A good start-up should actually consciously limit the maximum of funding. The start-up should account for 10% to 50% of the ownership structure after the ICO. If the original team takes less than 10% will result in a lack of motivation for the team to make progress. If it takes too much proportion of the ownership, the team will have too much control over the strategic direction of the company, putting the interests of investors in jeopardy.
Above are the tips for anyone who wants to be a Blockchain investor in China. The ICO market is still far from mature, you really need to be careful before you make a decision.