Fund-raising to an unfinished project is already a common form of investment. Kickstarter has been working this way for a long time – a platform for crowdfunding with a certain set of requirements: for example, projects are obliged to deduct a commission for the platform, and investors are provided with convenient ways of repaying money.
These rules are designed to ensure the financial security of the parties – but in fact, they do not always work. Projects fail, investors do not earn on their investments – they lose their funds. Some teams, having received money, at some point just disappear.
The same happens with the ICO. Projects that choose this form of investment are not easy to trust: there are no guarantees or set standards, most often there are only pledges.
Before you spend money on the purchase of digital coins, find out how risky these investments are, what results can be expected from them and what is best cryptocurrency to invest 2018.
We will begin with best cryptocurrencies to invest. There are:
1. Bitcoin (BTC)
2. Ethereum (ETH)
3. Ripple (XRP)
4. Litecoin (LTC)
5. NEM (XEM)
Which projects choose ICO for attracting investments?
In general, companies choose ICO to attract investments when the project is applicable to the blockchain technology, and token list can be built into its economic model. Token is a digital asset, often used as a payment within the project and giving the right to make decisions and profit from the project activity. However, due to weak state regulation or its complete absence, such investments seem risky. The security zone when investing in the ICO project: where the critical line…
It is difficult to determine the security zone, but there are several points, which you should know. The first and most obvious point is the presence of a prototype or working project (application, service, and so on).
In early 2017, many projects went to the ICO only with beautiful pledges. For every ICO team, it is important to see token sale progress. However, the current market requirements are concrete achievements, for example, code or alpha-version, which will provide a way to evaluate the team’s ability to develop the project and achieve the promise. With such these developments, it is much easier to find funding – when people see the project in work.
Types of investment and ICO-project qualities
Investors can be divided into two categories: those playing for short and long distances. On short play those who are vulnerable to “HIPE.”
Often the strategy of the short distance is related to the fact that the investor is going to implement the token immediately after entering the exchange – earning on the difference, which arises from the fact that in the early stages the tokens were sold at a lower price.
Another type is the long-distance players. Most often, these enthusiasts believe in the project and its idea. It is important for them to know that there will be demand for tokens, their price will grow and exceed the original rate.
Both types of investors should first study the economic model of the token, since the main goal of any investor is earning and multiplying funds.
It is also worthwhile to assess the design of the project: how much do the creators understand what they are going to do – what steps are they planning to take (you can see this in the roadmap) and what will they do with the money they collect, how will they implement their idea (written in white paper). It is also useful to assess the amount of investments the project requires: sometimes it is several times higher than the amount that is really needed for a full-fledged start-up and operation of the project.
You can evaluate the development team. However, this also does not guarantee that the collected funds will be distributed in the necessary way.
The last thing: do not focus on the advisers – the external auditors of the project. Often they play a formal role and do not participate in the implementation of the project. Theoretically, they serve as a kind of guarantor, because in case of failure, reputational risks may be incurred. However, usually their faces mysteriously disappear from the main page of the project, if there becomes a failure. In addition, there are projects that perfectly manage without advisers.
There are good ICO project and bad ones. Following the above rules, you will be able to find a good project.
List of best ico 2018
Here we will give three promising ICO project in 2018:
1. UKit – The idea is the use of artificial intelligence for website development
2. Rentberry — decentralized rental housing.
3. Trippki — blockchain-network for booking hotels.
A good sign for an investor can be a successful pre-ICO (raising funds before the official placement, usually at a discount to the cost of tokens).
If specialized funds participate in the ICO, this is also a positive indicator.
It is important that the project have positive feedback from members of the blockchain community (for example, at the bitcointalk forum) and favorable comments in the top international media.
Many today call ICO a new stage in the development of crowdfunding and even an alternative to the usual IPO. However, it cannot be considered a full replacement for the usual instruments!