Here is a staggering statistic – 46% of 2017's 902 ICO's have failed.

Not only that, but another 113 are all but dead too. Either because there has been no updates from the team or because the coin has no users. That brings the total up to 59%!

All this is documented in a recent article by Bitcoin.com, you can click the link to check it out.

Oh, and there are plenty of straight up SCAM ICO's to worry about too. Take Prodeum for example.

Lithuanian-based Prodeum was a token that planned to put fruit and vegetable tracking on the blockchain. This would enable consumers to track where and when their produce came from.

It is not exactly known how much Prodeum raised in its ICO, but estimates peg it at around $11 million.

Any backer that went to the projects website on January 28th ended up seeing a webpage with just one word - “Penis.”

No, they weren't hacked. The people behind it disappeared with the cash.

As part of their marketing campaign, they paid Fiverr models to write the tokens name on their body.

Guys, the mad coin rush is over. Only tokens with actual use and utility will have any chance to rise out of the pile of alt-coins. The token has to fill a need that can be better served on a blockchain – and there has to be a viable demand for it to happen.

Otherwise the token is destined to fail.

So that is why I have come up with a few questions to ask during your ICO research.

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Questions To Ask Before Investing In An ICO

Does the coin have a defined purpose?

The purpose of the coin must be clear and laser-focused.

Does it solve a NEED or have a large amount of people it can serve and will want it instead of what is already in use?

How many people would benefit from using the coin? The more people it can serve, the greater the customer base and the potential demand. If the coin is the first to solve or vastly improve a common problem it will have a strong advantage.

Does it have clear information about what it will do exactly?

In other words, does it explain the technical details or is the info just a bunch of marketing hype without facts. If there is just a bunch of “feel-good” marketing phrases and precious little information, that can be a red flag.

How strong is the whitepaper?

Is it well-written and explain the technical details in depth? How do other well-respected people view the whitepaper? Is it worthwhile and practical?

Who are the founders?

Do you know their names and history? Are there actual media events that they attend?

Is there a development timeline or plan?

Have they laid out a timetable that moves the project along at a reasonable pace?

How much has the ICO raised already?

How much do they need to bring this project to life?

What is the competition?

Is there another coin already solving the need that this project aims to fulfill?

How widespread is the potential use?

The more people that have the need for the coin the bigger the market for growth. You don't want coins that aim to work within a tiny niche.

What are the legal obstacles, if any?

What are the chances that governments will go after this coin?

How open is the team and how often to they provide updates?

The more the team updates the community, the more they will appear to be committed to it. When questions are asked, are they answered or given the run-around?

How many of these coins will there be?

Will all the coins exist at the start or will more be created as time goes on? Is there a hard cap to the amount of this coin?

How many coins will be given to the founding developers?

How many coins are going to be given to the founding team? If most of the coins are to be held by the team then those people will be able to more easily manipulate the price.

What exchanges will the coins be tradeable on?

While I don't expect them to be listed on Coinbase at the start, is there at least one reputable exchange that will trade it?

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The Crypto Market Is Maturing

If you ask and answer these questions before investing your money, you might just save yourself from a doomed project.

The crypto market is maturing and no longer can one just “shotgun” into many different cryptos and have them all go up. You need to start doing your due diligence and really do some deep research before you buy your coins.

In the long run, the coins with the highest demand will be the ones that do well. The demand will be created by the use and utility of the coin. The use and utility of the coin will be driven by the NEED that the coin satisfies.

Don't wake up one day to discover your money turned into a penis and vanished.