ICOs Calendar To Keep You Up With New Cryptos
What Is An ICO?
An Initial Coin Offering or ICO is a bit like an initial public offering of a stock in that the virtual currency is made available for purchase among investors as a way to raise funds for the company offering it.
An ICO is a bit different than a stock offering in that the token or coin offered may have some kind of function or utility related to a product or even software.
An ICO can be structured in more than one way. The coin or token may have a limited supply and a fixed price. It may have a more plentiful supply of coins or tokens and a fixed price, or there may be a limited supply and “dynamic pricing”.
Investing in ICOs
There are a number of platforms ICOs may launch on. There are many using the Ethereum ERC20 protocol, but other platforms include:
- ICX
- Komodo
- Lisk
- NEO
- Qtum
- Strat
In order to participate on some of these platforms it may be necessary to be added to the list of those allowed access to transaction networks the ICO is offered on; some platforms may require investors to be whitelisted in order to be included in shares of the new coin.
Something called KYC (Know Your Customer) documentation is also a common requirement for security purposes. Identity confirmation in the form of scans of official ID are needed and those participating need crypto wallets or other storage solutions to buy, sell, and trade.
A member of the ICO will verify identity and also verify the crypto wallet address matches the identity of the person submitting the KYC information. This process can take longer than some realize--weeks instead of days in some cases.
Should I Invest In An ICO?
Evaluating an ICO is a smart idea, just like reviewing an Initial Public Offering. Investors should know as much as possible about the companies and teams they are investing in prior to putting a single cent into the investment. Why?
Because just like IPOs, an Initial Coin Offering is a group effort and the reliability of the players is a crucial aspect of your decision-making process. Where an ICO is UNLIKE a Wall Street-style Initial Public Offering? Regulation. Crypto is decentralized and compared to traditional investing options it is the Wild West in many respects.
It’s risky enough investing in a brand new stock via an IPO where things are regulated by the federal government. Imagine all the risk and none of the regulatory oversight--that is the milieu of the Initial Coin Offering.
Which is why you want to invest some serious time examining the players behind an ICO. Don’t expect or give the same level of trust to an ICO that you would for a heavily regulated financial industry operation. You’ll want to go the extra mile in verifying the reputations and identities of the players in the ICO you want to put money into.
What do you want to consider when reviewing a project you want to invest in? There are some simple but key questions to ask. They include:
- Does the coin or token bring a benefit?
- Are there perks for early investors?
- What are the reputations of the people behind this ICO?
- How visible is the project? Is it associated with celebrities, high-profile investors, etc.?
- How transparent is the ICO? Is there a LACK of transparency? Why?
- What is the project roadmap or timeline?
Evolution Of An ICO
An ICO goes through a variety of iterations including a funding round, a set of privately held sales, drops, or trades, pre-selling the coin ahead of the official Initial Coin Offering, active selling of the coin, and of course the sales activities that happen in the secondary market.
Funding rounds basically go to support the operation, are typically not public, and there is high potential for those who purchase this early to reap substantial benefits should the ICO become popular, go viral, etc.
Some of this early funding may or may not result in an ICO, there are many failed projects that never get out of the “seed funding” stage.
Private Sales
When private sales are happening, this is a similar opportunity to the private sales and seed funding mentioned above. An early buyer could still be in on the ground floor of the next Dogecoin at this stage.
Or they may NOT be on the ground floor if the ICO fails or the coin tanks after it debuts. There are risks in either direction at this stage--Fear of Missing Out drives many decisions in this area, for better or worse.
ICO Pre-Sales
Pre-ICO selling is a phase that can happen once the project has been funded to the point where it can reasonably sustain a proper Initial Coin Offering complete with a marketing campaign and a big reveal event or announcement.
This stage is where some projects sell out. Others do not. These may proceed to an ICO stage where the offering is considered active and ongoing.
Secondary Markets
And then there is the secondary market where people who have scooped up some of the new coins or tokens go on to resell them, hopefully for a profit. The nature of the secondary market is such that profit-taking is possible, but a smart investor will watch the trends to gauge the best time to sell.
The same options are possible for those who want to buy on the dip, but it’s good to keep in mind that where a new coin or token is concerned, the “dip” may or may not be a condition the coin can recover from.
As you can see, this process is a bit complex, and success means playing the long game rather than hoping for a quick profit from an ICO.
