ICO is the abbreviation for the term “initial coin offering”, which, as a trend, basically represents a way of investing into new cryptocurrencies as soon as they appear on the market. Seeing as how developers of these currencies seldom have the resources necessary to develop these coins to their full potential, they are willing to offer hefty sums of their own coins in exchange for some other cryptocurrencies. The cryptocurrencies that they accept are usually industry flagships like Bitcoin and Ethereum.
Due to the nature of this investment, you will receive a far greater amount of coin than you could ever buy by conventional means, which means that should the cryptocurrency grow, you will be able to amass a small fortune in exchange for a minor investment. The thing is, a lot of people forget that major cryptocurrencies grow in small percent, even percent fractions, whereas a newly emerged cryptocurrency has a potential to increase its value hundreds and thousands of times in a relatively short time span.
On the other hand, like any other investment, buying ICO is risky and there’s no guarantee that a deal you decide to make will be a successful one. So, when all of this is put into perspective, should you invest in ICO or avoid this trend like the plague? Needless to say, this is not a question that can be answered without taking several factors into consideration. Here are some of them.
The first thing you need to understand is the fact that when deciding whether to go through with an investment, you have to do your research. In other words, you need to become as educated as possible on a certain topic. In order to get there, you need to find reliable sources of information. Here, we’re mostly talking about studies, whitepapers and official ICO announcements. However, you should also look for reliable web portals like The Blockchain Review. The reason why this portal in particular can be quite useful is due to the fact that it heavily focuses on the Blockchain technology and ICOs, which are both relevant for your future investment choices.
It goes without saying that cybersecurity is never a 100 percent reliable issue, however, when investing in ICO, poor security practices can significantly endanger your funds. First of all, you need to understand that even in the most ironclad system, the human factor always poses a risk. Two things you need to look into are the blockchain code and the protocol layer. As long as these two are tended to, the hazard of losing your ICO to malicious hacker activity can be reduced to a minimum. Moreover, once you enter their website, you might want to be on the lookout for an SSL certificate. In this way, you get a clear indicator that the company you’re dealing with holds cybersecurity in high regard.
Even if you don’t have much insight on the ICO in question, there are several ways in which you can inspect the developer’s portfolio in order to check if you’re placing your money in reliable hands. A great website is the first indicator you need to look out for, yet, designing a killer landing page is much simpler than creating a great ICO. It is somewhat more reliable to look if they’ve published any whitepaper. If this is the case, you need to read and evaluate it, seeing as how it can give you some insight into their technical expertise on the matter.
Next, you need to inquire about the token itself. Here, you need to ask some hard question like what its hard cap and what its base price are. Then, you might want to role-play a bit and try to look at the token from the developer’s perspective. What percentage of tokens will they keep? What impact will token distribution have on the project roadmap they are on. Needless to say, all of these have to be answered before you decide whether to invest.
Finally, this is not a decision you want to make overnight, instead, you might want to take some time and see how the ICO in question acts in a real-life environment. To do so, all you have to do is find an ICO ranking list (there are so many out there) and see how it acts over the course of weeks. It isn’t advised to wait for longer, due to the fact that you might miss out on a window of opportunity, should you do this. Aside from this, you can always go to the ICO subreddit and see what people are talking about. You would be surprised just how insightful some of the topics you encounter there can be.
At the end of the day, there is one thing that’s more than clear – without a proper survey, an investment in ICO is more of a gamble than a business move, which is something that you simply cannot allow. Therefore, take your time in order to decide where to invest, even if it means missing out on a potentially lucrative opportunity. Sure, time may be of the essence, yet, in this particular situation, it’s better to be late than sorry.
Add a Comment