Now, the world of all things crypto is not exactly straightforward. You will have to be well-versed in the local vernacular as it is to understand some of the things that are being discussed on occasion. This not mean to despair right off the bat. We at Coincomparator have done a fair bit to shed some light on some of the less known terms in the business.
And today we take a look at Initial Coin Offerings (ICOs). What are ICOs? Should we fear them and most importantly – can we eat them? All of these questions are answered in the sections below!
ICOs In A Few Words
Now, let us have a look at what these ICOs are all about! They definitely sound something like an Initial Public Offering (a practice whereby a private company goes public to raise capital and expand its operations. Well, it is close!
Now, it is basically about exchanging a mainstream currency with a Baby version of said currency. This way you can exchange Bitcoin for BabyCoin. But unlike IPOs, you will not have a stake in the company that is trading you back your BabyCoins.
In exchange you get the promise of multiple your riches if at some point the company kicks off. However, there is no legally binding mechanism that will make owners of one such entity honour their deal.
ICOs – Should we fear them?
Yes, yes and yes. We have recently reported on an entire bank going up in flames! Our point being that sometimes in the crypto world it is rather easy to create make-believe stories and scenario. People’s greed will always play a bad trick on them! This is why Coincomparator has been dealing with seemingly obvious issues.
Always bear in mind that an ICO could be a scam! Remember, that anyone can launch their own ICO and as such you can fall an easy prey to ill-meaning individuals. The lack of regulation makes such individuals easily abscond with all your precious digital chunks of wealth.
If you are deadest on backing up ICOs, you may want to stay away from Russia. It is not that the country lacks credibility or it companies are not at the forefront of technological development in certain areas. Quite on the contrary, we fear the state intervening into matters that are supposed to be private.
Other than that, you will find an ICO a good investment. As long as you can be sure, which is more easily said than done, that an ICO is genuine. Our best advice is to follow up with the history of the product you are investing in and see if the company has launched similar initiatives in the past.
How do you get leads on which ICO is best?
Let us be honest. There is no one definitive answer. Instead, you can spend a lot of time hoping and also following the public opinion. It is often the case that public figures, actors and other famous people, are backing certain ICOs.
It is not really a surefire that you will not be taken to the cleaners, but since you can never be sure and cryptocurrencies promise anonymity to those who cheat, you at least have someone to hold accountable for.
This way the responsibility is shifted to a well-known person whom you can point with a finger and blame, if things do go badly.
Also, there are reliable sources such as Coinschedule that upload information. These chaps seem to have been doing a fair job of keeping track of which the most noteworthy ICOs are. You will do well to swing by their website before you consider splurging out on ICOs.
Are ICOs going to be regulated?
This is an excellent question and one that merits a straight answer – yes. Eventually everything is going to come under the cross fire of legislation. Whether it is for a good or for bad only time will show.
Currently, the US Security Exchanges Commission is still steering clearing from regulating these assets as they are not sure whether BabyCoins and such constitute actual financial assets.
So what’s the bottom line?
The truth here is that ICOs will definitely be a thing that will be practised. They are an exciting new way to raise funds and it is well worth looking into. You will do well to spend some time researching them, especially if you have plenty of disposable income on your hands. Good luck and happy hunting for ICOs, and in the meanwhile – make sure to drop by Coincomparator so that you are up to date with the latest developments in the crypto world.