Let’s Dump the ICO “Exit Scheme” Mindset
Before the terms “angel investor”, “stakeholder”, “shareholder”, and “token holder” were even coined, our societies had wealthy and successful people like the Borgias who would use their money to create something memorable that lasts through the centuries. Without their contributions to recognizing true talent and skill, we wouldn’t have Michelangelo’s gorgeous paintings from the ceiling of the Sistine Chapel, the Statue of David, or Raphael’s galleries featuring the greatest thinkers of Ancient Greece.
The wealthy and powerful people in our societies have a much greater role than we can imagine, and they are the ones who can truly change culture, technology, fine arts, and science. Without the visionary generosity of the art dealer Paul Durand-Ruel, the likes of Degas, Monet, Pissaro and Renoir could have never made a living from their masterful craft. Likewise, the early Apple investor Mike Markkula was one of the first people to see potential in the projects of Steve Jobs and Steve Wozniak, and it was thanks to his generous contributions that the Apple II could get launched and revolutionize the way we use computers.
As any reputable economist will tell you, the functioning of our society is insured by the circulation of capital. And if you somehow manage to acquire wealth, then you might want to make investments that change our world for the better.
Nowadays it’s easier than ever to become a patron in a project and help talented people make their vision come true. ICOs are perhaps the crowd-funded versions of the Borgias and De Medici!
If you’ve acquired wealth and want to make an investment to truly change the world, all you have to do is look for a project that you believe in and invest in it. If you discover the next Picasso, you buy the paintings. If you think you’re dealing with a modern-day Steve Jobs, you buy stocks in his or her company. And if you find a blockchain project that can fundamentally and radically disrupt our society, you simply invest in the ICO or buy token afterwards.
However, we can see a big difference in attitude when it comes to ICOs, and this is the main issue that we have to address: investors aren’t quite an assembly of Markkulas who want to see the final product get delivered, but ruthless speculators who can’t wait to dump their tokens at a nice profit. Even though there is a high chance that the project will truly grow and deliver the promised result according to the roadmap, there’s a lot of dumping going on and it affects the developers.
The Borgias funded the greatest Italian painters to do masterpieces that still get millions of visitors every day. Early tech investors have helped the likes of Apple, Microsoft, and Google grow just because they knew that they were changing the world while also making smart financial placements for the next decade. In contrast, many ICO investors dump their tokens as soon as the project gets launched just to get petty profits, and this affects the credibility and long-term sustainability of the projects.
Of course, the ways in which an individual uses investment money isn’t anyone else’s business… but if the project that you’re funding is legit, has a solid and committed development team behind it, and the final project shows a lot of disruptive potential in the industry, then why would you want to compromise that and make it look like an exit scheme?
Stock market investors usually buy in because they see potential, and can go as far as counselling the team behind the project and offering some of their own expertise in order to help establish the final product. However, when it comes to ICOs, a lot of the investors have nothing but big expectations from the developers and show the kind of attitude which says “I give you my Ethereum, you figure it out by yourself and stick to the roadmap. I’m not willing to offer any kind of help, and I’m pulling out as soon as I hear a rumor about you or the token price drops for reasons beyond your influence and control.”
And that’s a sad reflection on the blockchain industry and the entire cryptocurrency market. Very few developers who start an ICO get the benefit of the doubt, and the dumping begins even in moments when the competition spreads destructive FUD.
Rome wasn’t built in a day, the ceiling of the Sistine Chapel took 4 years to paint, and the Apple II computer took an entire year of development and redesigning before becoming a worldwide phenomenon. How about we change the rules in the world of ICOs?
Programmers and software developers are our modern-day Michalengelos, and some of their work can become so great that schools of the future can teach it. However, this won’t happen unless we trust their work and vision, try to keep permanent contact with them to see if they need guidance in fields that might exceed their expertise, and give them enough time to come up with their projects.
This doesn’t imply blind trust in projects that are pretty much exist scams by default. If you’re investing in an ICO, then you better believe in the technology and vision. There really is no middle ground and you shouldn’t speculate with the future of a disruptive technology which can bring priceless contributions to our culture and civilization. Nevertheless, it’s your duty to make sure that you invest in something which has a competent and committed development team.
But as soon as you place that investment and buy tokens, you better be patient and follow the roadmap. Don’t set Rome on fire if something takes an unexpected turn, try to keep in contact with the developers and show a little support, and HODL those tokens at least until the project has really blossomed. The golden rule of investment is that you should only use money that you can afford to lose. But if you stumble upon a qualitative, verified, unique, and well-meaning project, it will definitely pay off in the long term.
Financing ICO projects is a form of patronage, and this type of investing takes time. We shouldn’t regard them the same way as day trading with stocks of multi-billion dollar companies, as teams of developers depend on the trust that you provide by HODLing the tokens. Being better valued on the market is more beneficial in the long-term than having many ups and downs which raise serious questions, and a good reputation is something a wise investor should seek to maintain for their investments.
So the next time you put your money in an ICO, you better take this into consideration: would you rather be a Borgias whose patronage builds something to last through the ages, or do you simply prefer to make small profits from quick dumping schemes? Do you even care about the project and its developers, or are you in this just for the money? There is a lot of power in your hands, and it comes with great consequences.
