Another Day, Another ICO

There are so many initial coin offerings out there. While 2017 was a big year for ICO's, 2018 has shown no signs of being any less popular. The problem is, most ICO's will not survive. And yet, five new ICO's probably just launched in the time it took to write this.

It's so easy to launch an ICO without any coding, business or cryptocurrency experience, even this baby is launching an ICO.

Sure, you might have a great team and idea, but sometimes failure is unavoidable. Maybe your execution is flawed or you misread the market, or someone else had the same idea and just did it better. There are so many variables.

As an investment strategy, buying in at the ICO stage is a great way to make some money. If you bought into most ICO's that were run in 2017, even for the worse performing ones you would still be up a few hundred percent.

Do you think Facebook was the first to market? MySpace was already there and before MySpace it was other failed attempts that had some success but ultimately lost in the long run. Not an original idea at all, but executed well and they kept it simple when other platforms offered a trove of features and customisation options.

If Kickstarter is for made funding products, IndieGoGo is for more radical ideas and causes, and GoFundMe is for social causes (like paying intuition fees), then ICO's are there as an alternative to venture capital and angel funding.

Personally, I think it's great that entrepreneurs have a new way to raise funds without giving up a percentage of their company and having the "crowd" funding it, but at the same time it means that bad ideas can now raise money and potentially cause investors to lose their investment when the price tank's.

The upside to traditional investment is the people investing usually will scrutinise your idea, prod and probe it to understand it, make you explain your business model and target audience. For an ICO there is nobody scrutinising it or asking the founders for clarification, just an idea and a landing page is all that is needed.

Do we have too many initial coin offerings? How do you decide what is a legitimate project and just a desperate attempt to get funding for an idea that will ultimately fail?

Image source Pixabay.