Why I'm investing in the Tezos ICO despite my concerns
The Tezos ICO will go live on July 1st and despite some reservations I'm going to invest in it.
Quick Background
Tezos is a self-amending blockchain that has been built from scratch and developed for the past 3 years. It is the brainchild of husband and wife team the Breitman's.
Kathleen Breitman
Arthur Breitman
One of the main things that attracted me to Tezos is that it has the backing of a billionaire investor.
Tim Draper
Source: http://www.reuters.com/article/us-tezos-blockchain-draper-idUSKBN181250
I first became aware of Tim Draper's involvement in the crypto space when he bought 30,000 BTC at auction from the silk road bust. He has given legitimacy to the project by associating with the Breitman. Also unlike most ICO's, the tokens will not be available until several months after the ICO ends. This is a lifetime in the crypto space and the price of BTC fluctuates a lot!!
What are my reservations?
Point blank the Breitman's themselves. Kathleen bashed Ethereum during the DAO fiasco and on their slack Arthur comes off as pretty arrogant and gets into heated discussions with potential investors.
There are a couple of reddit post that detail the concerns that people have raised.
https://www.reddit.com/r/tezos/comments/6k8k4e/arthur_breitman_do_tezos_and_yourself_a_favor_and/
https://www.reddit.com/r/ethtrader/comments/68hga1/tezos_red_flags/
https://www.reddit.com/r/tezos/comments/6bpage/concerned_investor/
Another issue is the uncapped nature of this ICO. There is a lot of hype around this project and getting the backing of a billionaire only increases the hype. If the project fails the Breitman's will still be millionaires because 8% of the ICO funds raised go directly to Dynamic Ledger Solutions, Inc. If it reaches the success of Ethereum they will become billionaires.
Why the hell am I still investing?!??!
When I did most of my due diligence I decided it would probably be better to ride the wave once it gets listed on an exchange. Then I decided to read over the very long and technical position paper and the whitepaper.
Much like my favorite musician you sometimes have to separate the artist from their art. The idea behind Tezos is to never have to do a hard fork. Using network consensus to drive changes in the protocol and mathematically proving smart contracts before they are submitted to the network adds an additional layer of trust. This also increases the barrier of entry for programmers and the network won't get congested with too many "Hello World" programs. Also the vulnerability that caused the DAO fiasco can possibility be prevented.
I had a number in my head on how much I would invest and I basically decreased it by 75%. The crypto space is hot right now and if I'm trying up BTC for several months I need complete assurance in the team and the technology. I could probably make more in trading than going all in on the ICO.
ICO Price Analysis
The ICO will run for about 13 days and have different bonus periods throughout.
Note: They are using bitcoin blocks as time increments and each block is roughly 10 minutes
1 BTC = 5,000 ꜩ + 20% = 6,000 ꜩ
BTC is about $2,500 about now so $2,500/5,000 gives us a base price of .50. With the first 2 day bonus $2,500/6,000 gives us .41.
When this hits exchanges it could easily bump up to a $1 or fall down to about .25. There is really no way to know. However the risk reward ratio is pretty high.
When Ethereum did it's ICO the price was .30 and it's hovering around $300 dollars. If Tezos has even a quarter of the success that Ethereum had it has the chances of increasing an initial investment 10 fold.
Thanks for reading and let me know what you think in the comments.
You had me until you said uncapped for 13 days.
LOL keep in mind a billionaire is already going to be participating in this ICO. I think this is going to dwarf the DAO in how much they raise. I think they may hit $250 million.
Sure...but being uncapped for 13 days means to me that anybody that wants to get in can get in. It's great for a long term buy/hold strategy, not so good for a ICO flip.
Yea this is definitely not an ICO flip and as I said 4 months is a lifetime in crypto.
Haha, that's funny and true. 4 months is an eternity!
Tezos is badass, I would invest if I was more liquid.
Everything I'm reading about it says 💸💸💸. But when I invest I only put in what I can afford to lose.
Great post, thanks for the update hadn't heard of it yet :) will dive in to it !! please keep me updated will follow :)
No problem you still have time. When you participate they will give you a paper wallet that you will alter import into an electronic one. So if you do participate backup the wallet in a safe place and make sure you won't lose it!!!
upvoted: I liked that fact you state "separating the artist from the art". To often we get wrapped up in investing in what we "like" vs. not what may be profitable. Great work on going more in depth on the "key players", as I too feel this is important in determining the success of a project. I've posted my own "quick facts" on the Tezos offering, if you want to check it out: https://steemit.com/bitcoin/@lifted/don-t-miss-out-the-tezos-ico-crowdsale-is-today-here-s-what-you-need-to-know
nice post @alao
i like your post
very awesome
Thank you sir.
you r welcome sir :)
very nice article , cryptocurrencies is such a new world , i believe in the futur of Ethereum and i see the bitcoin plus going insane right now ..it is all about how much will be invested and i bet many people will invest on july 1st , i dont think anyone can lose going on that boat aka the ghost writer ;) resteemed thank you .
Thank you. Nothing is a given in crypto and it is risky but I'm only investing what I can afford to lose.
i think you found real gold here and i LOVE the way you brought that up , very nice sharing and very nice explanation .. thank you so much .
Nice job!
@alao, nice to read a objective article about the good and bad poins of Tezos.