ICO Value Analysis - Part 1: Quantitative Analysis

simontheravager (51)in #cryptocurrency • 7 years ago (edited)

To follow my mission and provide you with in-depth analysis and help you in the ever changing cryptospace, i am sure it is totally needed to do this for the whole cryptocommunity.

The ICO Market is by far THE WILD WEST of the cryptospace and a capitalist dream as a totally unregulated space in a growing new emerging market, until the SEC will try to regulate it. Haha!! Read the link regarding the SEC below please.

The sentiments may be divided, whether ICOs are good or bad for the cryptospace, but one is not to deny: WE ALL LOVE IT!!! :-)

Nevertheless some of us have lost money with ICO scams and others will lose money in the future. If you act wisely and with good analysis you can also make a FORTUNE OF MONEY without a huge risk and the right ICO. Think about the Ethereum ICO. Damn!!!!

So what´s the real issue? Human irrational behaviour. It´s again a psychological thing of greed and fear.

As Gordon Gecko in Wall Street told us: GREED IS GOOD, GREED WORKS!!!

It´s your first lesson: LEAVE YOUR FEELINGS AT HOME!! Investments need to be seen in pure sanity. You should be GREEDY and we want to be greedy, that´s great. The greed in fact lies in your rational decision to do the investment and profit from it long-term. Please be sure, this is not a guide for speculators, it´s for investors, who want to be part of a company via a token/coin sale, which provides something more as just shiny cryptospace-talers for a few weeks. You will be afraid sometimes and even angry, but stick do your decisions and review it with clarity and sanity.

As value investor you always seperate your analysis of a company/project in two parts. First you do the quantitative analysis, which gives you the very fast chance to look at the first important characteristics. This few rules decide very swiftly and steely about the fate of an investment opportunity. This exactly is the job of the quantitative analysis. It seperates the good from the bad in the earliest stage of your thinking. So you do not have to waste your time with crappy scammy ICOs, because we are all short of time. The second is the qualitative analysis, which will be explained in the coming Part 2.

Quantitative Rules:

What is the crowdsale really about? Is it a token sale or a coin sale? Think about that, it makes a difference. What is the real use of the token or coin. What does it? Thats the key!! I call this the "envelope issue". Some token sales are like an envelope, the tokens never come out of it.
That exactly fits in rule number 2. A token which is just used in a closed network system, maybe only be useful in this system. So if you are not interested in using the system, this token or coin won´t have any value to you. As investor you normally don´t buy shares of somehting just to use it. You want to profit from it by selling it to the people who wanna really use it. A endless token aka money supply represents a case of a clear RED FLAG. These projects often have uncapped token sales and lead to uncontrolled inflation losses for investors. You always should know or try to forecast the final amount of money supply. Some ICOs also refer to that by saying that there is no right of value or stake in the company by buying the tokens at the token sale. Please always read the infos carefully!!
The token or coin must be traded at public crypto exchanges later on. That should be clear in the ICO infos, just to have the safety and opportunity of selling it, if something unexpected happens. It also provides you the safety of Rule 2, no closed token system. Otherwise you could be left with the tokens in your wallet for ever.
We are all people which are in a business of anonymity and cryptography, it should be the obligation of an ICO, that anyone can take part anonymous. KYCs at ICOs are not acceptable in any ways.
A token/coin sale must have very very low entry barriers. A pre-sale with a minimum fixed amount is great, but the open ICO for anyone should not have any high buying barriers, like minimum 5 ETH. That is absurd and a clear RED FLAG of a big SCAM. They just want to make as much money as possible.

If you follow this simple 5 Rules by just doing your homeworks, you will be able to kick out a lot of scams in the first place and safe your hard earned cryptos :-).

Finally Mr. Vitalin Buterin, the founder and chief of Ethereum, posted a very good analysis of the nature of different types of token sales models. Please read it and make your mind about it either, because the model of the token sale alone can make a HUGE Difference to the whole project.

The second part, the qualitative analysis, will complete the whole task, so you can make final decision about an ICO by your own. You will be able to decide, if an ICO is worth the ETH to spend. ^^

So PLEASE FOLLOW ME AND STAY TUNED for PART 2 VERY SOON!!!

BE AWARE AND TRADE ACCORDINGLY.

Yours
Simon the Ravager