In the blockchain world, the ICCs are currently flying around the ears. Do not be fooled because let the word ICO fall and gold seekers get it down as bees to the honey. For example, BAT blockchain project managed to collect more than 30 million euros in just 24 seconds, and Bancor scrapped in one day the dazzling amount of 134 million euros.

What does ICO mean?

ICO stands for Initial Coin Offering, freely translated into initial digital currency distribution, and is a way to raise funds for a new project. Investors can buy tokens (or coins) and get such a “share”. See it as a crowd sale for cryptocoins.

The popularity of these ICOs has taken a flight in the altcoin industry, thanks to the ease with which it can be set up. What’s called: Blockchain projects like Ethereum and Waves provide the ability to start your own ICO relatively easily and get money for your (blockchain) product.

TL:DR; Initial Coin Offering. A crowd sale that offers the opportunity to purchase digital coins from a new blockchain project.

Why

Thanks to ICOs, blockchain projects can therefore be financed in an easy way. An advantage of issuing an ICO is that it is not controlled by a government agency, which means that there are many fewer rules to comply with. The disadvantage of this is that ICOs also attract scammers. Even though there is only honey, the flies come by themselves.

Partly due to the huge amount of money involved in ICOs and wildlife growth to participants who want to become rich soon (FOMO :-)), investing in an ICO is seen by some considering a bunch of tulips during the tulip mania. Is it worth the investment?

The numbers

Perhaps, thanks to an advertisement on Blockfolio, or a tip of a well-known contact with the ICO phenomenon, you are about to become a starting venture capitalist. No mistake at all, if we look at the figures on ICOstats.com.

The (so far) resistant ICO is that of Stratis, a yield of 110,912.14 (one hundred and one thousand nine hundred and twenty fourteen) percent! The worst performing ICO is on a Renturn On Investment of ‘only’ 88 percent. Well, now take a look at the interests of your savings account…

ICO statistieken

When

You might better ask yourself: when not? I myself keep the new ICOs closely monitored by TokenMarket and Smiths & Crown. The advantage of Smiths & Crown is that they are doing a (hopefully independent) review of the ICO.

Note possible scams

Actually, the above head should be in red flashing capital letters. As mentioned earlier, not all ICOs are a save haven for investors; Before you know, you lose your money to a couple of scammers.

You can never tell the full 100 percent whether an Initial Coin Offering is to be trusted, but with a bit of common sense you will get far.

What I always check

  • First, my own rules.
  • If it looks too good to be true (gigantic return), then it’s probably not true.
  • I always check Reddit and Bitcointalk to see if other interested people can find any dirt in the sky.
  • Base Control: Does the team really exist (Google / Linkedin)? Is there an Escrow? Do I understand the technique or the whitepaper of the project? If I have any doubts about one of these three questions, it’s a no go.
    Further…

Do you want to join?

Many ICOs take place on ‘own’ websites, but now there are also a handful of platforms where you can easily participate in the ICO hype.

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