Taking the Risk: ICOs

4 months ago
71 in crypto

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For those of you who are just peering down into the rabbit hole that is crypto currency. You may have noticed the phrase ICO.

It stands for initial coin offering, and it’s similar to the initial price offerings of small companies who want capital in order to expand.

ICOs are put in place by crypto startups that are ready to receive funding so they can continue developing their ideas.
Initial coin offerings can seem very promising to new investors, the thought of getting in on the bottom level of a start up and having a pocket full of new coins teeming with potential would be enough to get anyone excited right?

Eh, speak to a few seasoned investors and you’ll soon realize that many of these ICOs are either out right scams or altogether bad ideas run by an inexperienced team.

I mean let’s face it, this whole crypto thing is still less than 10 years old, no one has that much experience, let’s be honest, they’re probably all still experimenting at this point.

That being said, it’s still possible to find the needle of success in that haystack of risk. And once you’ve found it, boy won’t you be happy

My first and so far only experience with investing in an ICO was when I decided to go for it and invest some of my beloved crypto into this thing called the Dao. I remember the rising excitement as the total amount raised kept increasing by the millions and the potential, oh all of that potential. It was a great idea, the dao, but they had bit off more than they could chew in my opinion. you know, that whole, hindsight being 20/20 thing.

Here are some basic questions you should consider if you’re deciding to invest in an ICO:

  • Why does an investor desire acquiring and holding this token?
  • What incentive is there for transacting with this token?
  • How and where will it be traded?

Additionally, I strongly suggest doing a lot of research on the team behind the project.

If they were previously involved with scams or misleading investors, consider yourself warned.

Secondly, seriously consider if they are presenting a solution to a problem that the blockchain is uniquely able to address.

  • Is this something that many people will want/need?
  • Will it be essential to everyday life for people or businesses?
  • What will make this coin valuable?

Do your research until you feel comfortable investing your money, and if all else fails, you can always use the old, wait and see method. If all else fails, at the very least you will be totally in-the-know about all of the new upcoming coins on the market.

If you go to smithandcrown.com you’ll notice that they will also include warnings if an ICO is a potential scam.

Here is a link to a website that shows you the countdown for all current ICOs.

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52
  ·  4 months ago

Nice...Upvoted and following! Very good!

72
  ·  4 months ago

I stopped investing in ICO's about a year ago. Now I prefer to invest a short while after the coins go public after the initial hype. Seems to be a good decision so far.

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71
  ·  4 months ago

Nothing wrong with that strategy. I wonder... Did you get swept up with that craziness when zcash was released? Talk about a rollercoaster of emotions haha

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72
  ·  4 months ago

I did Heidi, but I bought Genesis Mining contracts which I will never do again. That was my worst crypto investment yet.

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62
  ·  4 months ago

Cryptocurrency is also about removing 3th party risk... investing in any 3th party (crypto involved) company, brings back 3th party risk. That's why you should not buy 3th party mining contracts.

Great post Heidi, you make so much steem, keep it and you will be a very rich lady.

Steem on!

Lasse

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54
  ·  4 months ago

Just hold ETH, BTC. Unless, you really know what you are doing and even then picking the right ICO is a gamble. If Steem has any future 20 million market cap seems dirt cheap.

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53
  ·  4 months ago

Newbie question: why is Genesis a bad investment?

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71
  ·  4 months ago

Genesis has had mixed reviews in my experience. Many feel that the amount you pay to set up the cloud mining is far too much for the return in investment you receive, usually you won't see a profit for at least a year. In fact, the gains we've been seeing in BTC and ETH lately, it would've been far more profitable to just buy the coins outright and hold them long term.
Others on the other hand see value in the long term investment (I believe Genesis offers a lifetime mining contract) and aren't bothered by the trickle profit.
Some call it a scam, others think it's a great thing.
I'm happy with my decision to just buy BTC and ETH and hold onto them for the long term. :)

I suggest looking further into it and see how you feel.

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53
  ·  4 months ago

I appreciate your taking the time to explain it to me that way. Thanks!

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60
  ·  4 months ago

Any mining contract is the worst investment ever imo. Why would anyone want to give someone money to mine a currency, and trust and hope they actually pay you out, if and when the mining company goes bad? It's happened quite a few times in the bitcoin space. I don't even know if there is an upside for the risk? Is it even possible that returns from mining contracts can be better than just purchasing or trading for the currency you are mining and holding? I've asked this many times to people promoting mining contracts. I've made money on Bitcoin, Dash, Zcash, Ethereum, etc., all without trusting a 3rd party to pay me. Unless the payouts are going to be way over the profit margin of buy and hold, I don't understand it. I hope most of these newer people in the space do not get burned, but I believe it's bound to happen to many of them. At least that's your only bad investment :) I had to learn a few other hard lessons from 2012-2013 before really saw any profit in this space (lending, holding the bag on some bad alts, and a bad ICO or two).

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64
  ·  4 months ago

How do you short these coins? Do exchanges offer the facility?

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71
  ·  4 months ago

Take a look into https://www.bitmex.com/ I haven't personally shorted any coins yet but this is a start.

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72
  ·  4 months ago

You can't short coins that are not listed yet but I just wait until the initial excitement is over. Like Heidi said Bitmex has some nice pairs that you can short. Dash, Ether, Factom, ETC and a few others. Be careful using to much leverage.

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64
  ·  4 months ago

Sure, but those coins aren't recent ICO's. It would be nice to have that facility and could reduce the pump and dump nature of ICO's.

Edit: It seems I misread your original post. I thought you said you prefer to short ICO's. It would be awesome if possible. In theory it could be done with ICO futures contracts if an exchange was especially on the ball and listed them very quickly.

60
  ·  4 months ago

There is a difference between investing and speculating. What you are describing is pure speculation. That's nothing bad in itself, it's just not ... investing. ;-D

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71
  ·  4 months ago

True, but don't we all speculate before we invest? You're right, I suppose this is more of a How-To speculate ha ;)

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60
  ·  4 months ago

Well, you don't have to speculate if you really know what you're doing. But really knowing what you are doing with respect to cryptocurrencies is definitely a lot of work.

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71
  ·  4 months ago

Exactly, this is aimed for those who are relatively new to crypto, so I wanted to give them a heads up that ICOs aren't all sunshine and roses, and to give some general advice.

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25
  ·  4 months ago

Thanks, I am not that new to crypto but I know a lot of people who are. And your article was a very useful refresher for me and I know will help my newbies who I am trying to get involved in the Steem network.

54
  ·  4 months ago

So far I've been overly cautious about crypto currencies. I am warming up to them, and going forward I may start trading them.

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61
  ·  4 months ago

Trade in Thirds... "thirds rule strategy"

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62
  ·  4 months ago

This concept is very wise.

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61
  ·  4 months ago

(humbly accepts your compliment)

Thank you for noticing kind Sir. Feel free to review my comments section as well as my blogs.
or you can just google "thirds rule strategy"

57
  ·  4 months ago

Gret video/article! There is so much to learn in this area! Great view from Naz too! Lol!

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71
  ·  4 months ago

It's great to see you on here @jacuzzisurfer :) if you've got any questions at all feel free to ask away!

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57
  ·  4 months ago

Right on Heidi! Thanks again for making my trip out to Nazare AMAZING! You and Toby are AWESOME! Chat soon!

67
  ·  4 months ago

Thanks, in deed, I have came across a few ICO "opportunities" since cryptos started and, luckily, I was very well informed by my #1 source @onceuponatime and my own reading as well.

You're advices are very appreciated, thank you so very much for the heads-up, thank you. Keep your smile and taking good care, thrice on and namaste :)

59
  ·  4 months ago

Why can't some of the steemians can publish the info about Scam-free ICO to help the innocents.

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72
  ·  4 months ago

I welcome it, sounds like a project for you.

62
  ·  4 months ago

Good notes here Heidi, I value you as a member of this society. :)

65
  ·  4 months ago

wow... great post @heiditravels

59
  ·  4 months ago

Just bookmarked icocountdown.com, and subscribed to your YouTube channel. Thanks for all the info. I think from now on, I'll try learning a little bit more about cryptos (along with trading) on a daily basis... and in part with your help.

66
  ·  4 months ago

your videos are very good. why don't you try to make a video to explain the hardfork17 changes? :) https://github.com/steemit/steem/releases/tag/v0.17.0rc2

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71
  ·  3 months ago
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66
  ·  3 months ago

great. thx. :)

57
  ·  3 months ago

Great post, thanks. I just saw this list of ICO resources (by Steemit regular William Mougayar) and I thought I'd link to it: http://startupmanagement.org/2017/03/13/the-ultimate-list-of-ico-resources-18-websites-that-track-initial-cryptocurrency-offerings/

Also, I have to say buying and holding the "mature" currencies BTC and ETH is by far the most likely way for anyone here to avoid some serious heartbreak. As they say, the first rule of investing is not to lose money.

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71
  ·  3 months ago

I thought the first rule of investing is to never invest what you can't afford to lose?
Thanks for the supplemental info!

69
  ·  3 months ago

Great intro to ICOs :) I took the chance with Decent and Incent a while back, and hope they will fare well once launched.