ICO Madness

in #cryptocurrency7 years ago

OMG this ICO is going to be huge!!

How often have we seen this line on our social media feeds?

Before I get into more details, I feel like this meme captures the sentiment I'm trying to get across!
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The hype!


With the heights being reached by Bitcoin and Ethereum in the last few months, every cryptocurrency enthusiast would love to fill their bags with the next big thing! If you open up any social media feed about a coin you will see all the hype being thrown. I've seen some that have working alphas, some that have a functional system, some that are in their implementation phase with clear direction, some that have a solid whitepaper and some that just throw buzz words around to attract naive investors.

Ethereum Network


Suppose you have done your due diligence and have decided that you believe in a project punted by an ICO (or maybe you just followed the hype and have FOMO). The next frustrating step of the process is buying into the ICO which involved using Ether to buy the ICO token.

Why the frustration?


With the amount of traffic and the number of ICO sales happening now, the ethereum network just can't keep up. I got bounced from 2 ICOs that I believed had solid potential because my transaction took forever to be processed. The first took roughly 6 hours and the second took 20 hours before it bounced. Fair enough, I missed out on the potential purchase but I still got charged the network fees which made me 'poorer' than I was prior to the ICO with no tokens or potential gains to show for it.

Smart Contracts


The structure of the smart contracts make it so easy for someone to create an ICO that any scam artist can throw promises at people and get some money into their account without much effort. In simple terms, a smart contract on the Ethereum network is essentially a sequence of conditional statements (if [condition] then do this, else if [condition] then do that, ... , or just do this if all else fails) that uphold the contract. I mean I've even seen websites that offer to do all the ICO setups for you!

Every big name in crypto is an advisor


So you've got your ICO planned and have legitimate advisers? Awesome, good luck to you!
Some websites are insane though, listing advisers just for the publicity it will bring.
Mentality: Oh yes I saw a tweet from Vitalik Buterin that I liked, he is now an adviser on my project ( I have seen a tweet from him denying involvement as an adviser because of people creating hype from propaganda)

This is just an example of something that has all the buzz words that would make people jump at it!

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This image was from a tweet by TonyVays (~~~ embed:880074636284878848) twitter metadata:VG9uZVZheXN8fGh0dHBzOi8vdHdpdHRlci5jb20vVG9uZVZheXMvc3RhdHVzLzg4MDA3NDYzNjI4NDg3ODg0OCl8 ~~~

The idea of ICOs


The concept of an ICO is an amazing idea, it enables tech startups to get access to funding for their projects without having to go to a VC. Average people have the opportunity to invest in something that has the potential to change their lives financially!

Just like every sweet idea... there are always ways of it turning sour!
The ICO organisers have no real accountability to their token holders and even though there are some solid projects that actually want to change the world with their tech, there will always be scammers waiting to take advantage of a naive investor. It is in the interest of the investor (You! Yes, you!) to perform their own due diligence before making a decision. After all, this is not a game, real money is at stake!

Final Remarks


It is very important for any investor to do some research before jumping into an ICO (well... this applies to trading cryptocurrencies as well) . I'm not saying that you should write a dissertation on the matter, just conduct enough research to answer the following questions:

  • Does this sound like a tangible possibility?
  • Do the team have a credible and achievable roadmap?
  • Is the project objective something I believe in?
  • What has been done thus far?
  • Is this risk worthwhile for me?
  • Is this decision solely based on FOMO?

Make your decisions based on your own views and opinions! Evaluate information from multiple sources and decide for yourself what is credible and what isn't. Being lazy and following the hype is going to make you lose money!

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This is just my view on the matter (I may be completely deluded) so please do comment below and share your views on the topic!

If you found this post interesting, informative or useful, hit the upvote and resteem button :) Please and Thank you!

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ToneVays Tone Vays [UASF-148] tweeted @ 28 Jun 2017 - 14:45 UTC

AND the #ICO #Scam of the Week Award Goes To: @QtumOfficial! All Buzzwords r covered! #Ethereum #Blockchain #IoTtwitter.com/i/web/status/8…

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