We’ve all seen the glowing letters on banners – make money at home, register now. There are so, so many schemes that offer a big buck for little work. To keep things straight, ICOs are not that. Described in a single glam phrase, ICOs are „investments in huge, innovative technologies that require a lot of reading on your part, a bit of luck, some knowledge of the ecosystem and involves plenty of risks”. Maybe not so glam. I will not tell you there’s an oportunity to make 30X profit, because you already know that. Everyone from developers to friends can tell you how profitable it is.
I am here for a different reason, and that is because I want to teach you how to get that one in a hundred 30X profit-bringing ICO. Be advise, researching ICOs require a level head, some work on your part and a good immune system to BS (pardon my french).
Incentive to make big bucks, but not for you…
Let’s face it, some of the ICOs on the market sell you pretty pictures for the future. There is money to be gained on the ICO market, especially for developers. We have seen ICOs raising millions of dollars, which is great. I am all for innovation and don’t mind sparing some 50-100 dollars to see some products well-fed, with a roof above their head as they grow up. What really grinds my gear is that the promise of solid funding will inevitably attract some seedy characters – people who do not in the least intend to develop anything other than a whitepaper and a website. The good news is you can spot them easily.
They toss in some „Batchelor degree in Security” (god only knows from what institution), they are…discreet about their past projects and have no previous products out on the market. If the first idea you ever implement requires 3.4 million dollars, how about you ask your dad to trust you with that kind of money? It’s crazy, right? Then again, Vitalik Buterin, inventor of ethereum, was 21 (milk on his chin – no disrespect intended) when he launched the biggest blockchain platform, and one would assume that now, two years later, he is a millionaire. So, trust your instincts but do your research and make sure the team is made up of real people, instead of some foggy LinkedIn accounts done yesterday.
I will be the first to admit you can see some great projects from younglings, and no, they are not the exception, they seem to be the rule. However young they are, they do have a background and if they are proud of it they will flaunt it in their descriptions.
On some ocasions, you might see some really big names involved, and that’s probably a good time to sink in your bull horn.
Researching ICOs in the context of real market needs
You might have found some projects that are based on real-life products, useful to humankind. And yes, that used to be a good indicator of quality back in the day. The prospect of those real-life products should be carefully looked into. You might think “but wait, can’t this be made for cheap with traditional technologies?” If an ICO makes you ask that question, it’s time to move on to something more blockchainy. Many things are made better by blockchain, mainly more secure, and that’s great, people want security. Some just get BLOCKCHAIN plastered all over for no reason at all.
This means researching ICOs involves first understanding what blockchain is, what it does and what makes it valuable. If you have no knowledge of the technology, school yourself. It will save you a lot of pain. Or just keep your fingers crossed and hope you are very, very, very lucky.
As an investor, you absolutely always look at the market. Who are your competitors? Is your new pizza place right next to Dominos? Are you planning to open a copy shop at the top of the mountain? Does your chef know how to cook or is he actually an engineer? These are common sense questions and the developers should have common sense answers. After all, they know the market the best and should be able to do a top pitch.
These being said, there is plenty of room for innovation in the blockchain industry. And when I say plenty of room, I mean you just bought your new house and only have a coffee machine on the floor. All that space will be filled eventually, via ICOs on many occasions. Your job is to know which one is actual furniture and which ones is garbage.