Initial Coin Offerings (ICO) are the high risk/high reward place to invest with over 60% ending up dead coins. Before they even get an exchange listing or to the first birthday. But on the flip side, some Initial Coin Offerings will reach the exchanges and increase over ten times the initial investment. This boils down to Market cap, if you know the project well you might find something worthy of investment.
Always be careful with investments into Initial Coin Offerings as you could lose 100% of your total investment due to slack regulations on ICO’s. Think of it more as gambling and less investing.
The most common “dead coin” is a coin that never lived! 🙂
How is that possible?
- ICO Cash Grab
- ICO Scams
- No exchanges/Abandonment
- No momentum/experience
ICO Cash Grab
A ICO cash grab is when the project has just been setup to make the developers massive amounts of money and then pawn the project off the the many people invested/involved. Because they have so much invested into the project. Plus people who invest into blockchain related projects are typically well knowledgeable when it comes to coding and development.
They trick investors by saying things like open source platform or listing fake names. Sometimes even just dropping latest trending blockchain related keyword like Sharding or Sidechain in the future development plans.
ICO Scams are things like pre-mine or Airdrops or fake online wallets. This is similar to the cash grab. But usually more sinister and a planned attack on bad or lazy investors. They will sell you some new idea that sounds interesting and you invest in it because of an emotional attachment. The site will look very well made but will have little depth. For example some of the links will be broken or just redirect you to the top of the page. Commonly the site will just be one long page.
Another tell tail sign is not being able to find the developers listed on the team page, you find them by searching google for the names. Sometimes they might not even have a team page listed. Lots of the photos and content on the website almost looks recycled from other websites. The last giveaway is they only ever have hopes and dreams to sell you, no working product or platform that works or can even be tested. So you just have to take their word for it.
Some times ICO Scams can be very hard to spot due to the big budgets the scammer have to work with. This is what makes Initial Coin Offerings so dangerous to invest in.
Lots of the time a project will be a fairly good idea with a few good developers, but the project never manages to get listed onto some main exchanges. So the developers give up and move onto the next project. Lots of the time the money claimed from the ICO, will be returned back to the investors and no harm was done. Other than time lost waiting for the project to come to a end.
Some tokens are made by very inexperienced people, so the plans/road map just don’t get completed. They will have a very small team and a small budget. Plus bad advertising or just not enough advertising due to a small budget. So nobody knows about them and the coin or token never gains the traction needed to get listed on main exchanges. Some times they have very good ideas and often are for charity. It can be sad to see and very hard to add a charity coin to the dead coin list… But when you take money from someone you should uphold your part of the deal, by completing the project and meeting the deadlines on the road map/long term plan.
Initial Coin Offerings are risky, pick with well known names and people who have a good history. Side note, don’t get baited in if they are offering bonus coins or tokens if you invest now. A legit project would have no need to do that. (Never invest more than you are willing to lose)
Disclaimer: we are not financial investors. Just researching for helpful advice from past failed projects and applying some common sense. Pointing out common problems and what could possibly happen.
Table below filtered to short lived coins only