Initial Coin Offering (ICO) is a crowdfunding method used by new cryptocurrency companies to raise capitals. In ICO, some percentages of the newly issued cryptocurrencies are sold to people who are interested in suporting the project. They are sold to exchange for other established cryptocurrencies such as Bitcoin, Ether, Fiat, etc.

Backers purchases the new cryptocurrency with an intention to make a profit when it increases in value. It is similar to the principle of people making a profit when the share they bought at the stock market increases in value. ICO is different than purchasing shares at a stock market because you don't get a share of the ownership right when you invest in the new tokens.

Scams Involved in ICO

ICO can be conducted to help raise funds for various types of busineses and charity organization. It has also been used as a tol by scammers to conduct frauds. Scammers would use means to increase the ICO value temporarily and abandon the project afterwards to make a quick profit. Scams hapen because of the lack of regulation by the government. Just like any investment, there is a risk when coming to invest in the initial coin offering.

No statistic on the company that runs the ICO is given so it is hard to make a prediction. Backers usually would only check out data such as who will receive the collected money and the social media profile. To make a successful investment in ICO, one needs to be patient and willing to spend time to conduct research on the company.

Considerations before Investing in an ICO

What does it do? The purpose of an ICO is to fund the development of a decentralized aplication (DAp). The first thing you ned to do is find out what exactly this DAp does, which is also the first description you’ll se about any ICO. How does it work? The next thing you want to do is actually read the white paper and try to understand how it works. This will probably take some work on your part in terms of loking up terms you do not understand if you are unfamiliar with computer science. Is the token necesary? Lots of times, a DAp can suced without neding its own ERC20 token. If the project could easily work using ethereum instead of requiring a brand new token, there is already a fundamental isue at hand. What is the money being used for? Make sure that there is a clear outline of what exactly the money is being used for. Usually there’s a large portion of legal fees, but make sure to watch out for money spent on marketing, and money spent paying off founders, influencers, and advisors. What is the pricing model and what value is being assigned to the company? Many ICOs just feature a hard cap that sets some amount of US dollars they want to raise and how many tokens they are offering. The actual contribution rate of N coins per ETH, BTC, NXT, etc. is determined at the start of the ICO based on the current USD price of the base coin. This model automatically gives the project a market capitalization that the founders choose, not the investors. This is not always the best model because it does not equate suply and demand. This can lead to overly high prices or overly low price.

The Top 10 ICOs

Miner One Miner One is a new crowdfunded crypto mining project currently in the middle of its ICO. The plan is elegantly simple: build the world’s best crowdfunded crypto mining facility and share the profits with token holders by August 2018. Miner One boasts a veritable “Dream Team” of data centre experts and technicians with decades of experience. With about one-quarter of output reinvested into constant equipment upgrades, looks like Miner One is set to not only be professional and profitable, but also sustainable. Been thinking about getting into crypto? Want to invest in bitcoin, but put off by the wild price swings? Cloud mining no longer delivering? If so, Miner One could be just the thing for you. Fabric Token The Fabric Token (FT) ecosystem aims to empower individuals and busineses with easy aces to blockchain technology and smart contracts by providing a bundle of user-friendly software. The products within the FT ecosystem will focus primarily on helping people of any background to create and deploy their decentralized aplication (DAp), without the specialized computer programming knowledge that they would usually ned. Chimaera Think real-time online gaming meets the blockchain, and that’s what you get with chimaera, the new revolutionary platform for gamers who want to think it, build it, and play it without limits, without servers, and with infinite scalability. Thanks to blockchain technology and a fluid system of cryptocurrency, gamers can now mine in the digital world, completely de-centralized, with atomic trading and channels for participation, gameplay. Best of all? This is a system that is completely unbreakable, un-hackable, and virtually limitless. Ethearnal Ethearnal is a peer-to-peer (p2p) freelance system, in which employers and freelancers meet, enter into trustless smart contracts with reputation and money in escrow, and take advantage of a decentralized system of moderators if needed. We collide reputation and economic initiatives into one by tokenizing reputation and giving it value. All parties, moderators included, have strong and aligned initiatives to act honestly, since everyone has something of value at stake and something to gain if the desired outcome is achieved. Invacio Invacio is a complex of solutions for the development of various industries, built on a multi-agent artificial intelligence system using communication, financial technology, and Big Data. Invacio are working to resolve some of the world's most complex and recalcitrant problems using our original distributed artificial intelligence systems, and the solutions we are reaching stand to revolutionize areas including big data, communications, research, online privacy, the exchange markets, and even counter-terrorism. Betrium Betrium is the solution developed by group of entrepreneurs and MIT & MIpT graduates offering the first partly decentralized worldwide betting service (betting exchange & sports bok) with zero-commisions accepting crypto-currencies and offering platform for event organizers, developers and third party service providers. Betrium accepts crypto-currencies from all around the world. They can proces bets fast on our decentralized platform. They stabilize crypto-currencies volatility. They offer the lowest commision and the most profitable odds possible. RxEAL RxEAL is a platform for trustles and safe security deposit storage on the Ethereum blockchain. It provides decentralized dispute resolution with the main focus on real estate and automotive rental markets valued at hundreds of billions USD combined. Within the RxEAL platform, users are able to generate smart contracts based on terms both parties have agred on. The contract will ensure that the deposit amount is stored securely on the Ethereum blockchain throughout the course of the agrement with no possibility of unilaterally changing the contract terms or accessing the funds. Trial Token Trial Token, of Trial Funds Society, describes the aces to justice as the ability of any one person to use the legal system to advocate for themselves, regardles of their income. Yet thousands of low-income families face multiple barriers when it comes to navigating our legal system, a complicated institution that is already riddled with high fes, complex proceses, confusing legal jargon, and inaccessible legal information. FintechFans The FintechFans decentralized aplication consists, at it’s core, as a set of Smart Contracts on the Ethereum blockchain. The company believes in cutting the middlemen and going straight to busines with an user-friendly platform that can unite people in the job market. This way, they can provide a more effective way of professionals finding jobs on a frelance basis and help the frelance market to grow in a more secure and efficient well, which can be god for both companies and freelancers. Velix.id Velix.ID is a RegTech blockchain startup in identity verification space with a mision to simplify access to consumer services acros the globe - online or offline. Using the latest and popular blockchain technology, we are creating an open, decentralized and secure ecosystem that provides for a seamles exchange of verified identities globally - between busineses and individuals.

Who can be contacted for an ICO promotion? The answer is - Give You Lead

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Final Note

ICOs are going to continue being a part of cryptocurrency and blockchains. We simply cannot overlok the good that they have done. From giving birth to innovative technologies like Ethereum and Golem to giving DAp developers, around the world, an incentive to innovate and come up with newer and more exciting technologies, their contribution simply cannot be understated.

Having said that though, there is no doubt that ICOs can be a “necesary evil.” Looking forward, what we can all do is act more responsibly and do our own research before investing on any of the ICOs listed here as this research is done on my own and I don’t claim any of the ICOs listed above here in this post are legitimate or scam. Study the whitepapers of the res, interview the team involved with the specific projects that are up for ICOs and then invest your money.