If you are involved in the cryptocurrency space, or you are looking to get involved, there is no getting away from the trend of Initial Coin Offerings (ICOS). Often lambasted in the main stream media, the ICO has become the mainstay vehicle for blockchain projects to raise initial investment for their development. This post gives an overview of ICOS – the risk, the reward, and why you should be interested in this space
What is an ICO?
An ICO is an investment vehicle for a cryptocurrency (blockchain company) to raise starting capital for their project. Typically, investors buy units of the new cryptocurrency or token with a more established crypto coin such as Bitcoin and Ethereum. Once the new cryptocurrency is released on an exchange the investor can sell, hopefully for a higher price as the project gains momentum or hold for the longer term to secure a greater rise in value.
The ICO has become a tool that has revolutionised the financial system: barriers to participation are low, and the rewards can be staggering,
Risk versus reward
With any investment, there is always risk versus reward. The adage springs to mind that you can only lose 100% of your initial investment, but you can make 1000s % profit. This is even more so in the largely unregulated space of the ICO.
Take some of the popular cryptos of today and their return on investment (ROI):
NXT (1 million percent + ROI)
IOTA (300.000 percent + ROI)
Ethereum (150,000 + percent ROI)
Stratis (80,000 percent + ROI)
NEO (formerly AntShares) (100,000 percent + ROI)
However, the flip side of the coin is that ICO tokens can launch and trade well below their issue price. This can continue for months after the ICO, or indefinitely if the platform is poorly received which can be for several reasons. Additionally, the space is unregulated, so you have to extra vigilant in how you participate. If you send your funds to the wrong address, then you have no recourse. If you are hacked, you have no recourse.
Buying new digital currencies at the ICO stage is a very risky investment, much riskier than buying bitcoin or investing in established altcoins such as Litecoin (LTC), Ripple (XRP), or DASH. But, in my opinion, without risk there’s no reward.
How to maximise the chance of ICO success
I, for one, am huge fan of the ICO and I understand the risk and reward that comes attached with this tool. To maximise your chances of success there are a number for steps that can be taken. First, do your research and vet the blockchain play. Second, get involved in the crypto community and learn the ropes. A wonderful place to start is bitcointalk.com. Next, invest only what you can afford to lose, so start small and build up.
If you want to get involved in the crypto space, then it maybe could be the best decision that you will make. If you are interested in discovering the best ICOs around today, then visit my blog http://cryptocoindude.com which uncovers those hidden gems that can potentially provide the sort of gains that makes the eyes water and the heart race.
This post has been written by Crypto Coin Dude. Crypto Coin Dude is an avid crypto currency investor, technologist, futurist, and all round duderino. He can be found most days over on his blog http://cryptocoindude.com