The amount of ICOs being launched daily is difficult to digest as it gains more attention. There is a plethora of information to learn about ICOs, but below I briefly go over the basics and the important things I believe a curious investor should know. Then, at the bottom I have listed a few interesting ICOs that are on me and my friends' radars! If you're ready to invest, check them out!
<h1>WHAT IS AN ICO?</h1>
An ‘ICO’ (Initial Coin Offering) is an unregulated 30 to 60 day sale of digital assets that embody the potential value of an early stage project. It is a fundraising tool that trades future coins in exchange for cryptocurrencies of immediate, liquid value.
There are many phrases that better define ICO: ‘token sale’, ‘token launch’, ‘crowdsale’, ‘pre-sale’, etc.
A properly designed token sale doesn’t promise investment returns, dividends, or profits. Instead, it focuses on selling a digital asset that will have a strong use case in a decentralize application. In order to participate in the network, rather than just being a funding mechanism, a token sale is required.
Crowdsales of crypto assets have pulled in over $1 Billion this year alone, Tezos having the largest token sale at $232 Million. The key to a successful ICO is to raise enough capital to develop the MVP (Minimal Viable Product). However, many ICOs fail to meet their funding targets due to poor marketing and publicity, and not specifically because their project isn’t good enough. And even when an ICO doesn’t reach its fundraising expectations, it does not mean they cannot have a successful product. A team that executes will bring awareness to their project, which will incentivize investors to buy in.
<h1>HOW TO PARTICIPATE IN AN ICO</h1>
Take these steps, assuming you have done your due diligence by reading the white paper, looking at social media, analyzing the team, etc.
1. Create a wallet from <a href="https://www.myetherwallet.com/">MyEtherWallet</a>
2. Buy Bitcoin or Ether from a digital wallet, like <a href="https://www.coinbase.com/join/53c16bbbbef295ae32000003">Coinbase</a>
3. Send your coins to your MyEtherWallet address
4. Sign up for the presale on the coin’s website where they give you an address
5. Send your coins, typically BTC or ETH, to your ICO address
6. Send your coins from the presale to the exchange that holds the coin.
Before step 6 happens, you will be waiting weeks/months until you can start trading your tokens on an exchange. Figure out which exchange the token will be held on. Sometimes you can find this info via Reddit and other online posts, but sometimes I just join an ICO's slack channel and personally reach out to the founders! It’s possible that no exchange wants to add them to their platform, so think about that before you even invest.
<h1>Why Are Most ICOs Built On The Ethereum Blockchain? </h1>
Many developers have chosen Ethereum as the main platform to build new projects because it’s relatively easy and allows them to take advantage of the security the Ethereum protocol provides, which allows them to focus more on the application layer, which aids to unify the ecosystem.
Because ICOs are unregulated and Ethereum is the most common platform used to launch ICOs on, Ethereum has birthed some of the largest potential scams. However, if you do the due diligence to invest in solid companies with quality investors, then it can be highly worth it.
<h1>HOW ICOs BUILT ON THE ETHEREUM BLOCKCHAIN AFFECT ETHEREUM'S PRICE</h1>
It’s unclear whether funds are mainly retained in ETH, turned into fiat, or diversified into other assets after a token sale ends. There are several reasons, but here are a few that I have personally experienced and analyzed!
Short term: Mega ICOs may put downward pressure on ETH’s price.
Long term: If an ICO is built on top of the Ethereum blockchain and becomes successful, then the only way to increase the value of that coin is to buy ETH, generating demand in the coin and in ETH.
Failed ICOs also hurt the network. After the failed DAO hack, the price of ETH dropped over 25%. Successful ICOs push the price up, but if one fails then it will weaken the ecosystem.
<h1>UPCOMING/CURRENT ICOs </h1>
ICOs are being launched daily and it gets a little crazy. I just met founders in my Uber tonight who are considering an ICO for their startup that turns waste food into organic insect-based animal food! Anything can be built on top of blockchain basically.
I have selected a few interesting ones, but check out more on <a href="www.coinschedule.com">Coinschedule</a> and <a href="www.icoalert.com">ICOAlert</a>
<h4>Payments</h4>
<a href="https://kin.kik.com/">KIN</a>: Everyday digital service for chat, social media, and payments. Kin, created on the Ethereum blockchain, will be the unit for all economic transactions within the Kin ecosystem.
Crowdsale: TBD
<h4>Gambling & Betting</h4>
<a href="https://ico.bitdice.me/en/">BITDICE</a>: Profitably operating as the largest crowdfunded cryptocurrency casino to expand into the new USD 50 Billion online casino market. Crypto gambling accounts for roughly 5% of the entire online gambling market. Bitdice uses Ethereum smart contracts to ensure games run properly.
Crowdsale: Aug 15 - Sept 15
<h4>Infrastructure/Payments</h4>
<a href="http://powerledger.io/">POWER LEDGER</a>: Allows for each unit of electricity to be tracked from the point of generation to the point of consumption within the building it is generated, or when sold to other consumers. Power Ledger allows renewable energy asset owners to decide who they want to sell their surplus energy to and at what price.
Crowdsale: Aug 27 - TBD
<h4 color=blue>Finance</h4>
<a href="https://wanchain.org/">WANCHAIN</a>: Aims to build a distributed future bank that allows any institution or individual to create their own virtual teller window in the bank and provide services such as loan origination, asset exchanges, credit payments and transaction settlements based on the digital assets. It supports smart contracts and privacy protection for the users.
Crowdsale: Sept 6 - TBD
<h4>Data Storage</h4>
<a href="https://coin.red-pulse.com/">RED PULSE</a>: First ICO on the NEO blockchain platform. They use machine learning and natural language processing to automate and scale basic data collection, while incorporating cryptocurrency to create an open and transparent sharing economy for research. Market intelligence platform that uses event-driven research to cover market events impacting Chinese companies, sectors and the overall economy.
Crowdsale: Sept 10 - Sept 24
<h4>Infrastructure</h4>
<a href="https://ambrosus.com/?subscription=success">AMBROSUS</a>: Aims to improve supply chains by creating a trusted ecosystem to assure the quality, safety and origins of products from food to medicines. Enables more efficient security and improved distribution processes to bring transparency to consumers. Building protocol on Ethereum.
Crowdsale: Sept 13 - Oct 13
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