What does ICO mean?
ICO stands for Initial Coin Offering, freely translated into initial coin distribution, and is a way to raise money for a new project. Investors can buy tokens (or coins) and receive a “share”. Think of it as a crowd sale for crypto currency.
The popularity of these ICOs has taken off in the altcoin world, thanks to the ease with which it can be set up. What is called: Blockchain projects such as Ethereum and Waves offer the possibility to relatively easily start your own ICO and thus raise money for your (blockchain) product.
Thanks to ICOs, blockchain projects can easily get their financing done. An advantage of issuing an ICO is that it is not under the control of a government agency, which means there are far fewer rules to comply with. The disadvantage of this is that ICOs also attract scammers. Even if there is only honey, the flies come naturally.
Partly due to the enormous amount of money that goes on in ICOs and the proliferation of participants who want to get rich quickly (FOMO :-)), some people see buying a bunch of tulips during the tulip mania. Is it worth the investment?
Perhaps thanks to an advertisement on Blockfolio or a tip from a friend you have come into contact with the ICO phenomenon and you are about to become a venture capitalist. Not at all wrong if we look at the figures on ICOstats.com.
The (so far) best performing ICO is that of Stratis, a return of 110,912.14 (one hundred ten thousand nine hundred twelve twelve) fourteen percent! The worst performing ICO is on a Renturn On Investment of “only” 88 percent. Well, no savings account interest can compete with that …
You better ask yourself: when not? I keep a close eye on www.coinschedule.com and www.icodrops.com and the new ICOs. I think the advantage of Smiths & Crown is that they do a (hopefully independent) review of the ICO.
Watch out for possible scams
In fact, the above head should be in flashing red capitals. As stated earlier, not all ICOs are pure; before you know it you have lost your stake to a couple of scammers.
You can never say for the full 100 percent whether an Initial Coin Offering can be trusted, but with a little healthy common sense you will get very far.
What to watch out for?
If it looks too good to be true (huge return), then it’s probably not true and don’t step in.
I always check Reddit and Bitcointalk to see if other interested parties can find any dirt in the air.
Basic check: Does the team really exist (Google / Linkedin)? Is there an Escrow? Do I understand the technology or the white paper of the project? If I have any doubt about one of these three questions, it’s a no go.
Do you want to join?
Many ICOs take place on “own” websites, but there are now also a handful of platforms where you can more easily participate in the ICO hype.