EOS - Best time to buy (ICO)
What is it about?
EOS is going to sell their tokens in an ICO (What is an ICO?). I'm going to explain to you why the time of your investment can have a great effect on how many tokens you will receive and why it's crucial to understand how people think and act.
How does it work?
At the start of the sale, 20% of the total mined tokens (200,000,000 EOS) will become available during a 5 day window.
The remaining 800,000,000 EOS will then be split evenly into 360 one-day windows of 2,222,222.222222 EOS tokens each.
Source: https://github.com/EOSIO/eos-token-sale
Explanation
Before we can discuss when and why to invest in EOS, we have to understand how the ICO is going to take place. Let's look at this example from the official github page:
20 EOS are available during the window
Bob contributes 4 ETH, Alice contributes 1 ETH
Bob contributed 80% of the total contributions and gets 16 EOS, Alice contributed 20% of the total contributions and gets 4 EOS
Source: https://github.com/EOSIO/eos-token-sale
We can see that Bob will get more EOS tokens than Alice, because he contributed more ETH (You can only buy EOS tokens with ETH). Over the past few days people have been trying to figure out if it's a good decision to buy right at the start of the sale, during the 5 day window, or if it's better to wait. Let's take the example from above, but we're going to add one more person:
Bob contributes 4 ETH
Alex contributes 3 ETH
Alice contributes 1 ETH
Instead of receiving 16 EOS, Bob will now only receive 10 EOS, although he contributed the same amount of ETH as before. What can we take from this example? Well, the more people are going to buy EOS during the first 5 day window, the less tokens you are going to receive during that time.
The remaining 800,000,000 tokens will be available during the 360 day window, as mentioned above, split up into 1 day windows.
The reason why the EOS team decided to have a different kind of ICO is because of big investors, companies or groups that prevent the average person or small business from participating in the crowd sale. A lot of ICOs in the past have sold out within minutes, even seconds, leaving you and me no chance to take part, even if we believe in the project and aren't looking for big money. With a 1 year ICO they are hoping to give even small investors a chance to contribute in an early stage, without having to worry about the competition not allowing them to buy tokens.
When should I invest in EOS?
What you need to figure out is how people are going to react and act when the token sale begins. This is mostly going to be dependent on social media, people are looking for confirmation because they are unsure what's going to happen. There are two outcomes:
People think that buying in early may result in a better return due to receiving more coins if others wait with their investment
People think that buying in early may result in receiving less coins due to high demand and therefore they will wait to minimize risk
Obviously no one can predict the outcome with certainty, but you can try to increase your chances of getting in at the right time, if you take news and posts on websites like SteemIt into consideration. If the majority of people are unsure about getting in right at the start you should consider getting in early because of the fact that you have the chance of a great return, especially if people realize they missed out and start buying after a week. This will have an even greater effect on the price when exchanges start to list EOS in the future.
The same logic applies to big investors and companies, not only to the average buyer. They have a lot to lose, if you had a million to invest, would you be willing to take the risk of losing a fair amount because of uncertainty? I wouldn't. That's why, the way I see it, people who are going to invest more than the average person are most likely going to wait for a good entry point that brings less risks with it, but still pays off in the end, simply because everyone is buying right at the start might result in them not maximizing profit.
If you are looking for a high reward and you are willing to take the risk then you should consider getting in early. If you are looking for a good investment that will pay off over time, and you want to be on the safe side, wait until EOS tokens have settled for a price and buy.
Why is EOS worth investing in?
One of the developers of EOS is Dan Larimer, who previously worked on projects like Steem and BitShares, which are incredibly popular. According to Dan, EOS will be a combination and improvement of both. BitShares high frequency transactions combined with Steems ease of use and no fees will be the core for a whole new level of blockchain technology. It will be faster than anything we have seen so far and it will allow everyone to make use of the blockchain without needing to spent months of learning and doing research.
To me, EOS is a good investment. The technology and the idea of improvement will revolutionize the crypto world.
How do I stay up to date on the ICO?
You can sign up for the official EOS newsletter here. Make sure to also follow @eosio on SteemIt.
There will be a 2 week public trial run of the sale on the Ethereum test network, to see how it works out before starting the real ICO. If you are still unsure about investing, give it a try and see how it plays out for you.
In my opinion and base of the experience we've got with Bitshares & Steem, the best time to buy is a the beginning from the start.
This is great! Can you please do a follow up? Have you bought yet?? Thanks!
It will be interesting to see how the market plays this game. The first day will be the most challenging and poses the greatest opportunity and greatest risk. Without prior days to go by it is hard to predict what everyone will do.
You rightly point out that large players have the most to lose by dumping into the first round. But the first round is also the largest, 100x larger than subsequent rounds making it the easiest to put a large amount of money into.
I guess 50% of budget on first day and 50% in the middle of year.
What you think about IOTA? newcomer who just arrived to coinmarketcap to 6th place, but have history in 2 years?
https://steemit.com/iota/@aivanouski/hi-i-m-iota-what-where-when-how-is-usd-1-7-billion-the-6th-place-on-the-market-cap
In a scenario like this you should most likely invest early since the number of people aware of it will be smaller than throughout the year.
I am thinking about buying EOS. Dan Larimer is a genius, and I have confidence in anything that he develops. Thanks for the blog post, it is very informative!