I've had a good run whike investing in crypto and I wanted to share my thoughts on how you should go about deciding what to invest in .
In the last 2 years there have been several ICOs and when you look at the stats ( rate of return ) ,they all do seem like a sure shot way to make the big bucks .
What people need to understand is that a large chunk of these are extremely over valued at the moment and are simply rising in prices due to speculation and large whales that are pumping these coins to make profits .
Hence you really can't tell when the bubble will burst and your fortunes along with it .
Hence you must invest based on decisions that you would make while investing in a regular startup.
These are the most important things I try to understand before I invest in an ICO
- The business idea
2)The team - The actual immediate need for it in the market
The Business Idea
This is a very crucial part of the investment process . I would like to see a genuine competitive advantage over existing firms that exist currently . There must also be a strong enough entry barrier from preventing it being replicated by every other person that chooses to do so . For example I see ICOs such as Ten X ,Monaco ,token etc and while they seem impressive , I can't help but wonder how hard it would really be for existing banks to offer such a solution . These small ICO startups could never compete with an existing major and I don't see anything that cannot be replicated and hence I decided to opt out of the ICOs. This of course is just my thinking and a lot of you may disagree and that's totally fine .
The Team
It's always prudent to delve deep into the founding team to check if they have prior experience in the field which always increases the likely hood of success. If you have the time and money I would suggest meeting up with few of them if the opportunity presents itself .
Immediate need in the market
I think this is one of the most important factors when deciding to invest . Long term success of these tokens is correlated with the usefulness of the platform itself. I am seeing a trend now where every business is trying to hop on to the blockchain trend . While they may achieve some process efficiencies when switching over to the blockchain ,there are very few platforms out their that demand the immediate attention of a large part of their target market .people are quite happy carrying on with what they are using and are in no hurry to move to it's blockchain equivalent .A good example of this I would say is the recent STATUS ICO. While the tech and the idea seems really promising ,what they are essentially doing is trying to get existing users from apps such as WhatsApp and wechat and hope that they will want to switch over to a blockchain version .Now I see this as a really tough battle to win currently and asking 2 billion + people to switch over is really not going to happen any time soon . I for one am more than happy with the way Whatsapp works and see no reason to move to another app on the blockchain anytime soon .
So which alts do I see value in at the moment ?Tokens that are fueling gambling .
Unlike every other alt coin out there ,except maybe ether and Bitcoin and few noteworthy others ,almost none of them represent a solution to a a very pressing pain point that currently exists in that industry.
But when I look at coins that are aiming to move betting to the blockchain ,that really makes sense to me. Wagerr ,an ICO that just ended ,is focused on sports betting on the blockchain.
Based on what I have read ,their solution genuinely solves several problems that persist currently in that industry .Here are few of them
regulatory problems that prohibit a large portion of the world from betting and hence are pushed to the underground betting market which is valued at roughly 400 billion $$$.
Underground betting is highly risky and is filled with corruption and cases where payouts are not made
High fees charged by sports books
4 ) Lack of anonymity
Bettors will soon realize that by betting on the blockchain they are able to bet anonymously from any part of the world with much lower fees and can expect immediate payouts.
I cannot comment on all the apps in this space as I haven't had a chance to look at all of them , but in the case of Wagerr ,the token is in itself designed to rise in value as the betting volume increases and hence losses are minimized due to rise in price of the token . I can see gamblers moving over to this as they launch since they provide a solution that is far better than what exists currently and the cost of switching is practically nothing .
SONM is another ICO that I saw a need for in the market ,given the increased growth of startups and the increasing need for computing power that goes along .
This is all just a guideline that I base my decision on . Personally I am confident in my mind that if you follow this process well , you will def find more success than failure in the long run .
Happy investing !