NO GHOSTS or how scam can be identified at the early stage of ICO projects?

Dozens or even hundreds of ICO initiatives are turning into dust right before our eyes. Bitcoin is febrile, the rest of the crypto-currencies too. Most of us understand that global crypto-story features of a big bubble, others loudly share this impression. Fans of puzzles are in vain to find answers to the questions “And yet, why did Bitcoin suddenly have become so desired for everyone? Where is useful function?” And against this background, millions of investors continue to enter the contradictory crypto assets.

Even though you would decide to invest just few bucks into an ICO project, you shall likely think about whether it will bring you some dividends or not. Every investor dreams of making big and quick money, but is it worth every time?

Let’s try to figure out together some of ICO projects’ nuances.

Large or even huge ICO budget.

Let us recall the last year’s parable about monkeys, skillfully housed to a village. This story have turned to be, perhaps, a №1 hit story among people who invested in crypto, or thinking about it. I wonder why those peasants so easily paid for a dead horse? But everything is so simple — their focus has been completely shifted to profit, but no one even tried to think about the product bringing dividends at the end of the day, how it works and why this product is absolutely needed by everyone?

It would seem that in case ICO project has already managed to attract a valuable investment not only to fulfill the basic intended purpose, but also for an extensive marketing and advertising campaign, this can serve as a reliable confirmation of its consistency. Unfortunately, in the real world this sometimes turns out to be the opposite.

By avoiding focusing on hype and paying better attention to the cause and effect relationships, it would not be so difficult to understand the reality to draw the right conclusions:

Bob has invented a bicycle and went out to getting money for production.

He has attracted good investment So what should he do?

He was about to start bicycle manufacturing and sell them earning well… but no, Bob have begun re-investing in famous advisors, contracted the best PR-agency, bought much of leading press space and booked several top conference speaking slots.

At first glance, everything looks right and natural, but when bikes are reminded, the whole picture turns to be different — hey, Bob is no more who he says he is!

Lack of innovation.

Many of ICO whitepapers and websites are full of projections about the total demand for issued tokens, ownership benefits and the rapid growth of their value mainly expressed in dollars. However, I can agree just with the last statement on the background of steady capitalization growth and subsequent growing value of crypto-currencies, used as a basis for new tokens. All the rest is a big question. Indeed, why do millions people have to pounce on another derivative of Satoshi Nakamoto’s “crypto-gold”? It must be much easier to buy a Bitcoin or another highly demanded crypto-coin and forget about anything else!

But in case of real innovation discovered in the proposed ICO solution, then it is likely worth considering it seriously. Maybe this is a new emerging branch of the crypto industry, promising more than generous and, most importantly, long-term dividends?

The clear intention to release another new token based on the same blockchain infrastructure.

Last year, I have followed the development of dozens of ICO projects dedicated to a wide range of economy sectors. Enthusiasts of ICO fund raising have authoritatively promised to use public blockchain (mainly Ethereum one) for absolutely any application including retail and many others requiring high-speed settlement. And, strangely enough, investors were willing to believe this, even though waiting for hours to confirm their crypto-currency donation clearance and paying unreasonable transaction fees for their funds transfer. And finally, the CryptoKitties game, built on the basis of Ethereum blockchain and its smart contracts, became the apogee of such initiatives end of last year by downgrading the entire Ethereum system’s performance.

Very good lesson to learn from!

Lack of support from the associated industry.

You find many ICO articles looking like a promo and published by respectable press. “There’s nothing special that they are all commercial, now it’s so accepted” — you calm yourself by putting a tick in your investor’s evaluation sheet and do not even trying to think about whether there is at least one article or even a word which has been published for its meaning instead of its fiat value.

You listen ICO speakers at blockchain conferences and other specialized crypto-events… they are very much appreciated by their crypto-world colleagues and other crypto-currency evangelists… and you reasonably mark this ICO by another “plus”. While you don’t even try to figure out whether this recognized by experts from the world of medicine (if ICO is dedicated to medicine), tour-operators and hoteliers (if this presentation was about tourism) or, for example, farmers with restaurateurs if it’s about food. And, most likely, it would be worthwhile showing ICO stuff to the profile experts since beautiful words and slideware may have nothing to do with reality. Sometimes this can only be evaluated and understood by the appropriatery industry professionals.

By the way, few words about beauty

I’m not inclined to belittle the importance of qualitative show-case design. But, if I would be going to support an innovative blockchain project aimed for social media, I’d try to figure out why does it opens me a whole universe drawn in a standard landing page and parked in the common ICO domain zone instead of, say, .TV? And amazingly why do I observe the same universe (a bit differently shaped, of course) on the ICO website dedicated to financial markets? And often many other ICOs have quite similar look. It seems to me those “wow-pictures” can easily hide the lack of valuable content and, at the same time, let bubble-ICO stay on top of attraction.

No, I do not encourage anyone for keeping away from all colorful ICO sites, but it is worth locating and checking for a clearly described innovative idea and the ways of its practical implementation first.

Dust slowly settles … what will be opened to our gaze in 2018?

2017 has become the year of enthusiastic and amateur ICOs and creative ICO swindlers. Some projects have failed to survive by mistakes, others were conceived as scam from the very beginning. 2018 started with numerous dictums about insolvency of ICO as a way of attracting investors. There are many regulation proposals making ICO more transparent by law and even by technology. But whatever happens, the number of innovators and investors will not decrease and, having mastered the next lesson of market spirals, all of them will continue to create amazing and useful solutions … together!