Due diligence is the process of consideration expected of individuals or businesses prior to entering into an agreement or contract. The phrase is often used in finance to characterize the study of prospective possibilities and risks, particularly in the context of investments and mergers, prior to acquisitions and asset transfers. The growth of new currencies, the majority of which are formed without a controlling authority to prevent fraud, poses a significant concern in the cryptocurrency space. Furthermore, real cryptocurrencies are frequently unpredictable, with considerable price fluctuations over short time periods. Given this, it is suggested that due diligence be performed prior to making an investment. Investigations may include chart analysis, forecasting, business-model and white paper analysis, assessing the validity of partnerships, doing research on team members, and so on.
