BTC, ETH are already well-proven cryptocurrencies that have been circulating in the market for a very long time. In their quotations, speculative capital has already been laid, which creates additional volatility for them. You can earn on them, but novice investors can do it, focusing only on the long-term period. Those who are able to analyze and love risk with high returns can invest in the ICO blockchain, where there is no speculative capital yet.
Blockchain ICO – how to become the first owner of a cryptocurrency
ICO is the primary placement of tokens that will be transformed into cryptocurrency in the future. Cryptocurrency is the exchange money of a single application developed on the blockchain technology. ICO can be compared to IPO – the initial public offering. The only difference is that, buying tokens, the investor does not buy a share in the project itself, but only joins the number of its participants.
When buying tokens at the blockchain stage, the IPO investor receives:
- the opportunity to earn money due to the fact that after ICO the cost of tokens will increase if the project is useful and interesting;
- use tokens as a payment for project services at a lower price (bonuses are often provided for the first investors);
- support an interesting project.
Potential investor risks:
- the company does not evaluate the essence of the project and loses interest in it, after the ICO, the cost of tokens falls;
- the project is obviously a pyramid and the withdrawal of money will be impossible.
The blockchain-based ICO is a crowdfunding platform model, where an investor invests money in venture projects without fully knowing about the project. It receives only what it considers necessary to give its developer. Since the project has not yet been launched, it is difficult to truly appreciate its benefits, therefore, one must categorically not take into account the marketing techniques of the project owner.
Methods for evaluating a reliable prospective project:
- the developer must convey to the investor the validity of the release of cryptocurrency and prove the benefits and viability of the project;
- open dialogue with the project team, plans for its development show the seriousness of intentions;
- the project team must own 20-50% of all non-exchange tokens for the first 1-3 years;
- project developers should justify the amount of attracted investments;
- before ICO, a test version of the proprietary protocol must be implemented.
Conclusion. Blockchain and ICO is a venture capital investment, with a high percentage of fraud. But the blockchain is the technology of the future, those startups that really turn out to be attractive, are able to bring from 100% per annum in the first years of their development. The task of the investor is to distinguish the real project from the HYIP and be able to analyze its potential effectiveness.