ICO's of Crypto-Currencies
Many of you might have noticed the growing popularity of ICO phases in newly-launched coins. I am following the altcoin announcements board on bitcointalk.org for a while now and I have noticed the large number of projects deciding to release the coins to the market using an ICO.
What are ICO's?
ICO is a short for "Initial Coin Offering" which is a way to distribute the coins by letting people by the coins before the actual project launches. usually, people purchase the coins with Bitcoin and get their share of coins when the project is released.
Why should I participate in an ICO?
You might consider participating in a certain coin's ICO phase because the price could go MUCH higher than what you bought your coins at, and you could make large profits. of course, assuming the project was legit and succeeds.
What is the problem with ICO's?
Okay, so ICO's sound like a good thing, huh? you could be an early adopter of the currency, buy for cheap and sell for profit, right? Yeah, not always.
Let's look at an example of a successful ICO project: Ethereum!
Ethereum was sold at 0.3$ per coin during the ICO and now it is traded at around 12.5$! that is around 40x profit from what you invested! wonderful!
An example of a less successful ICO coin: Waves.
Waves if not the BEST example of an unsuccessful ICO coin, but it's surely not a successful one. Waves's price at the ICO was 0.2$, and it's currently trading at 0.18$. yeah, you didn't lose much, but no profit either. Also, many people who participate at ICO's sell their coins when they start to sink in price, so many early adopters of Waves probably lost money.
Are there any more issues with ICO's?
Yep, there are. there are projects, who announce their coin and start the ICO phase before anyone knows too much about the project they are developing. they open an ICO website asking for contribution of Bitcoin from the community, and in many cases raise large amounts of money.
Those people are usually backed up by LinkedIn and other social accounts, to "prove" their professional skills and identity, but LinkedIn accounts CAN be bought or faked. they are using self-moderated threads and delete every comment that could harm their business. those people could simply run away with the money raised in the ICO and you might not hear from them again.
Want to learn more about this issue? visit my article at: https://steemit.com/steemit/@soapsadu/do-you-believe-in-crypto-currency-icos-initial-coin-offerings
I hope I helped some newbies to the crypto-currency world who are curious about the pros and cons of ICO phases in the crypto community, and I hope you'll like this article guys.
-SoapSadu