During the first two articles, we have covered the hype of ICOs during 2017-2018, frauds and scams, hacks and security breaches, which all resulted in high regulatory attention around the world.
In this article, we will discuss in details what measures ICO investors should be taking, in order to protect themselves against scams, and invest their hard earned money in the most promising ICOs of the year. After all, not every shining is gold; investors need the right tools to be able to pick up the few most promising ICOs out of the thousands which are flooding the market almost on a daily basis.
Last but not least, we will close the article with the outlook for the second half of 2018 and what signs should investors be seeking.
So, before running an ICO or starting any new business in this industry, you must ask the following questions and find the answers:
Once we have a clear answer to the questions above, we will be able to filter the diamonds from the crystals. In case an ICO is not addressing directly any of the above questions, this should raise the alarm. Investors must have the clear understanding of what added value will blockchain bring to the business, and why existing crypto or even fiat currency can’t be used instead of a native token of the project. In many cases, having a database is superior to a blockchain, especially when it comes to storing sensitive personal information.
Unfortunately, using a public blockchain will make it virtually impossible to delete or change a block of transactions, once it has been approved and stored. This means that users will stop using such platforms when they realize that there is no way to delete their personal data or actions. For example, not every person will be glad to have their personal info and a list of recent activities stored forever on a dating platform. Most of the users at some point would like to delete their accounts permanently.
In case a native token is not a must, users will not be incentivized to hold it. Such a situation will cause a sharp price slump to the token due to the overselling if there would be weak demand for it.
Lastly, if the project is not trying to solve a specific problem for a large market, it will be quite difficult to create enough demand to keep the project alive. This will either lead the project to the situation, where the soft cap isn’t reached, or to eventual failure of sustaining itself once it has exhausted the funds.
Although 2017 was the year of awareness about the blockchain technology, 2018 is the starting point of adoption. The $12 bln which were raised during the last year will start yielding actual value only this year and will continue for the coming few years until maturity of applications is reached.
Institutional investors will start entering the market at a faster pace, especially once regulations have cleared out more and regulated custodial services have been tested and proved to serve the need.
Institutional investors need a different set of tools to feel comfortable penetrating into the crypto sphere. After all hundreds of millions have already been lost to hacks and scams, the thing that such institutions don’t want to encounter.
On the positive side, it is worth noting that:
Such developments should be fruitful for the long term. However, for the mid-term, especially before the end of this year, we can witness more adoption from institutions, the thing which will bring stability to a very volatile market.
Special attention should be paid to:
So we brought you the main ideas for the second half of 2018 the investors and startup founders should consider when going ICO. The game changes almost instantly, and mistakes in this industry are quite costly. One should always stay aware and keep a hand on the pulse of the markets; thus we will continue to unpack and examine the hottest trends of the ICO sphere.