Is a blockchain really required?
Before investing in any type of ICO, you should educate yourself in order to understand whether the project you are looking at actually benefits from the technology and decentralization the blockchain has to offer.
Investing in a blockchain project that doesn’t require the technology will likely result in an catastrophic investment loss.
Most newcomers to the space actually think that a coin is mandatory in a blockchain and that becomes motivation for them to invest money in an ICO anticipating a higher return. A lot of people are narrow minded, see the rapid growth of Bitcoin, and make the assumption that they can apply the same investment hold strategy to capitalize on large returns.
This could not be more wrong.
Using an open or permissioned blockchain only makes sense when there are more than one mistrusting parties which want to interact and change the state of a system, and are not willing to agree on a trusted “centralized” third party.
We ask that you take a look at the above image for questions to ask yourself when examining a project.
Buying and holding a token which does not require a token or blockchain technology will not guarantee you a profit. Many ICOs have pre-sale bonuses behind the scenes and allow early investors to dump their holdings immediately after the token is available on exchanges.
Conclusion
There are many projects that don’t require blockchain and you should stay clear from most of them. Especially the ones that are evidently trying to capitalize on raising funds for something that doesn’t utilize the technology enough. Tokens are not stocks and require demand for them to increase in value. If there is no value created or no reason to keep the token in its native format, you could end up with a disaster investment.
At the end of the day, there will be projects which won’t utilize the technology to its full extent and will still perform well however, when you see things like CarTaxi and Paragon Coin you should probably take a second guess.
Don’t hesitate to visit our website at:
https://www.verifiedicos.com and join our Telegram to stay informed.
Verified ICOs is a dedicated community to help, protect and educate investors on ICO’s.