Here we focus on investment-grade ICOs while staying away from shady and obfuscated ones.
New to blockchain and cryptocurrency?
Might want to start with the pinned cryptocurrency thread: https://forum.lowyat.net/topic/4320604
What is blockchain? I only know about bitcoin.
Blockchain is the technical foundation that bitcoin and all other cryptocurrencies are built on.
In other words, blockchain = the technology, bitcoin/other coins = the application that runs on the technology.
What is an ICO (Initial Coin Offering)?
As of Q4 2017, ICO is a largely unregulated way to raise fund for blockchain ventures/start-ups.
It opens up the once exotic investment opportunity to the mass market, which is the opposite of traditional funding models. (regulated, strict review and pitch process etc)
Generally, every ICOs try to raise fund at varying stage of development, some have live running prototypes while some are still on planning stage.
Most ICOs provide a white paper, which is a piece of document that explains the ICO thoroughly, covering the business model, technical schema, the team, roadmap, funding utilization etc.
If you are positive about the ICO, you can invest in it in which you get tokens representing your investment.
Most tokens are utility token, which means that the token grants you the right to consume the services offered by the ICO.
Some ICO issues tokens that represents a stake in the company itself, in other words you own part of the company (similar to stock equity), however more and more ICOs are moving away from this as it involves complication with their respective country's investment regulators.
By product of an unregulated industry is that there will be significant amount of ventures that will fail, underdeliver or straight-up scams.
Hence our goal here is to filter out the bad guys and maintain a living list of healthy ICOs.
What makes a good ICO then?
While not exhaustive, generally these are good points:
Presentation:
- Is the ICO site well made or it looks like one made by editing free web templates?
- How is the presentation text written, funny layout, grammatical errors?
Business model:
- How feasible is the business model?
- Read the white paper.
The team:
- Check the background that they are indeed who they claim they are, including their credentials.
- Pop their names in Google, you might be surprised sometimes. (not in a good way)
Generally avoid ICOs with these signatures:
- One that claims to do everything without details on how they plan to do it. (breadth without depth)
- Strongly emphasize on post-ICO price surge ("Your coins worth 10x in 6 months! Join now!") rather than the ICO's vision and impact.
- Integral part of the ICO is getting people onboard as your downlines via referral aka MLM, usually with lucrative referral bonuses.
Article from TheNextWeb:
https://thenextweb.com/investing-2-0/2017/1...yptocurrencies/
The don't(s):
- Don't openly share your referral links, keep that private.
- Strictly no MLM-esque ICOs.
Happy investing!
This post has been edited by V-Zero: Oct 9 2017, 08:03 PM
Oct 6 2017, 11:44 AM, updated 9y ago
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