What are ICO’s
Initial coin offers are unregulated “investment” opportunities using crypto currencies to fund new technology startups.
What are ICO tokens?
Tokens, created on the Ethereum Network, allow companies to create “shares” in a new company and give the tokens to “investors.” Similar to stock shares offered with an IPO, however Initial public offerings are strictly regulated since the great depression for a good reason.
Will people make money investing in ICO’s and Altcoins?
Even gambler’s like us suggest people avoid ICO’s and Altcoin’s as much as possible, since their are too many BAD bets in crypto currently. Try sports betting or poker if you want better odds than some of these “projects” with little more than a roadmap.
Lengthy “rant” About ICO’s
46% of ICO’s launched in 2017 were considered failed projects by February 2018
This is not to suggest that there aren’t crypto currencies (altcoins) and tokens available that have value (or appear valuable) for purchasers.
Bitcoin‘s technology is valued as a store of value that is decentralized and has many use cases purchasers agree would be a benefit to society.
Ethereum as well, a completely different technology with different use cases, has technological properties that the masses see value in. J.P. Morgan, Chase, Microsoft and Intel believe it is valuable enough to be part of the Enterprise Ethereum Alliance to share ideas for using the technology in the future.
Monero and other “privacy related coins” have also shown to be projects that people within the crypto currency space greatly value and want.
The problem comes when owners of Monero, Dash, Zcash and Zcoin coins are all arguing over which privacy coin has the best technological advantage and which are terrible. There is no right or wrong in these debates, whichever is adopted by the most users is obviously best.
To then see ICO’s launch, where the media have click bait headlines on the “next Ethereum,” starts a lot of noise. Once reddit starts arguing over the Telegram Open Network (TON) and whether the project will actually be valuable compared to 6 other altcoins, we all know it’s a bubble.
What Strategy for making money on ICO’s is best?
Anyone pretending to know how to properly value a technology startup with little more than a white paper (basically a plan to create something), a development team (that may change in a few years) and no product available for the public to actually use, is a liar.
Valuing a crypto startup similar to Silicone Valley startups just because crypto currency is the newest bubble, doesn’t mean people spending bitcoin or altcoins on these projects will be happy in a year or two after they fail.
The best strategy for those not looking to day trade altcoins and avoid pump and dump scams every day, appears to be to remain skeptical of every ICO, altcoin and token until proven wrong. There are too many people trying to make easy money off the crypto hype, once the waters calm a little we’re swimming back into the crypto sea’s again though.
The DAO was a great ICO failure. Crowdfunding via token sale in May 2016 they set a record for largest crowdfunding in history, at $168 million before failing. Their technology was hacked and the hackers took a third of The DAO’s funds which caused Ethereum to fork (creating Ethereum Classic) to restore The DAO’s Ether funds that were stolen.
Then the token was de-listed from exchanges because nobody wanted to buy a token based on a project that had vulnerabilities hackers could attack again.
Maybe TechCrunch shouldn’t have said “The DAO is a paradigm shift in the very idea of economic organization. It offers complete transparency, total shareholder control, unprecedented flexibility and autonomous governance.” before he technology was proven to do something.
Then there are projects like BECKSANG’s ARI Token that was going to release before the people involved realized selling this idea would be a bad idea.