What is ICO and how to make money from ICO
Successful projects that have shown an unbelievable growth after the ICO (for instance, IOTA – up to 533 900%) attract more and more people to this cryptocurrency sector. What is the specifics of ICOs and how can you make profit from ICOs?
ICO stands for initial coin offering, where coins or tokens are analogues of securities. In fact, a token is a kind of ICO cryptocurrency used to raise funds for the realization of a definite idea. Cryptocurrency crowdfunding requires less time and startup capital than the traditional initial public offerings. In case the ICO project is implemented successfully, both token buyers and authors of the idea make a profit.
The price of tokens directly depends on the success and popularity of the project. In other words, in case of a successful investment in a promising business, the crypto shares purchased by the user will be growing in price. By selling them later, one can make a profit that would exceed the initial investment by dozens of times. Authors of projects often redeem their shares at a high price.
How to invest in an ICO and what benefits it provides
To invest in an ICO, you will need a cryptocurrency wallet and, of course, the understanding of the process and the source of income. For instance, Ether token was developed when the Ethereum project was launched. The initial price of their ICO token amounted to $0.3-0.4. Later, the price soared to $20 and kept growing. Currently, it equals to approximately $200. Tokens of some promising projects (for instance, Brave browser) are sold out in a matter of minutes, which contributes to the potential growth in their price in the future.
How to choose what project to invest in and which tokens to buy? Special trackers can help you with that, for example, http://icodaily.net/ or https://icobazaar.com. Such resources publish news about new offerings, analytical and statistical data. Well-organized advertising campaign, availability of website, pages in social networks, and contact details of authors signify the seriousness of the project.
Some companies compile ratings of founders of ICO projects, for instance, ICORating. You can discuss prospects with experts and talk to authors of projects on specialized forums.
The process of investing in an ICO consists of the following steps:
- Selection of the project;
- Transfer of funds to the account of the project (verify its authenticity first);
- Receiving of tokens.
After the ICO is closed, you can sell or buy tokens at special exchanges.
How to detect fraudulent ICOs
Making money from an ICO is not as easy as it seems. According to the survey of Satis Group LLC, 80% of projects are found to be scams. Such situation is connected with the fact that ICOs do not have regulative and strict mechanisms meaning that the environment is attractive for fraudsters. What is the difference between bubbles and truly promising offerings?
Characteristics of a serious ICO:
- normal white paper;
- convincing promises of profits;
- binding to real economy;
- pages in social networks;
- detailed description of the possible refund.
Lots of hype can be a bad sign: artificial swell in the popularity of the project, unrealistic promises, including of high dividends at the beginning. As a rule, such pompous programs are quickly closed.
Projects directly connected with the blockchain technology and cryptocurrencies are considered the most stable and promising. However, even trusted and reliable projects require consideration when buying tokens, as there are frequent cases when hackers crack the project’s website and replace the account.
What is more beneficial: ICO or mining?
Comparing investments in ICO and mining, the latter is a less profitable, but more stable and steady option for earning a cryptocurrency.
Investing in ICO is connected with definite risks, but in case of a thorough investigation and smart planning, you can earn a lot immediately, increasing your income by several hundred percent.
You can learn more about ways of successful investing in ICO and pitfalls of this way of making money at the international Blockchain & Bitcoin Conference Georgia. Tbilisi, June 20: case studies from leading Georgian and international experts of the cryptocurrency market, panel discussions with participation of economists and ICO advisors.