The terms Blockchain and cryptocurrency have become more or less very mainstream in the last 3-4 years. Today everyone has an idea of the what these terms mean. The crypto rush is mostly propelled by the bullish explosion we experience at the end of 2017. More and more people have developed a massive appetite for crypto assets. To capitalize on the surging number of new traders is the so-called ICOs. But what is an ICO in a nutshell?
Well, ICO is a term that has equally become popular in the recent days. But what is an ICO? How are they related to the cryptocurrency trading space? Well, we are going to look deeper into this topic and debunk most of the myths surrounding ICOs.
What is an ICO?
First, the name may appear technical, but it’s not. The term comes from IPO (Initial Public Offering). Therefore, ICO stands for“Initial Coin Offering.” For the IPO, it is a situation where a company comes up with an idea and sells it to the public; who invests from buying shares. Once the project is successful, the shares will start appreciating, and that is how investors make money.
ICOs are similar to IPOs only that they fund a blockchain-based project. Instead of investors getting shares, they buy tokens. It’s is estimated that ICOs have raised billions of dollars for blockchain based startups. But not every ICO is worth investing in.
What to look for in an ICO?
Be very careful while investing in an ICO. After the bullish bitcoin explosion in 2017, many companies have come up with blockchain-based projects. Some such as AELF, Cypherium, RightMesh and NAU amongst others are doing very. However, some ICOs they have exploited naïve investors by offering various incentives such as low pricing and fancy whitepapers only to fail in actualizing the project. After sometimes, they are unable to deliver on the promise thus resulting in losses. So what should you be looking for?
First, don’t blindly invest put your money in something that has just popped up in the market. Look at the whitepaper or yellow that the company is availing to the interested investors. How unique is the project from other blockchain-based projects? That’s what gives a product an edge on the market and possible appreciation with time. Don’t overlook that!
The reality is not every project will see the light of the day as detailed in the whitepaper. Some will fail to meet the object. That will result in depreciation in token value. But you can tell a Potent ICO. Get an ICO that is already a product on the market. VeChan and ICON are two best examples of ICOs that have ready products being consumed by the industry. Avoid anyone is selling nothing but just a whitepaper. Go for products that are already on the market.
Exchanges Supporting the ICO
The cryptocurrency exchange that the ICO can trade on is critical. Invest in an ICO that is trading on popular exchanges such as Binance, Bittrex, Poloniex, Bitfinex, KCoin, BTC, and Kraken amongst others. That’s the only way that you will be able to trade efficiently and make profits.
So now you know. Don’t rush into investing in any coin that comes up. Look for the mentioned factors first. Check out this video: