How To Invest In Cryptocurrency - Choosing The Right Coin (What Is An ICO?)
Investing in cryptocurrency gets your blood pumping and your mind racing. When you make your first investment you won't be able to resist the temptation of checking prices 11 times an hour.
Eventually this dies down and you only check prices 11 times a day.
I'm not what you call a gambling man, but this insane technology has me hooked. I feel like I get all the fun of gambling - minus the depressed walk of shame home from pissing away taxi money on a night out with the boys.
There's a reason a lot of poker players / gamblers are involved in the crypto world.
Today we're going to go over cryptocurrency investing, more specifically how to choose the right altcoin for you.
What Is An ICO? How Do They Work?
ICO stands for initial coin offering.
Let's say you've got an innovative business idea that's going to transform an industry. You need money to get the ball rolling. Normally you would go through a bank or reach out to venture capitalist investors.
What if there was a way you could raise money and keep full control of your company?
Initial coin offerings are here and they work like a charm.
ICOs allow people to send you cryptocurrency - mostly Bitcoin and Ethereum at this point. In return you send them back some coins of your own.
Boom! A new cryptocurrency is born. We'll call our new cryptocurrency SpongebobCoin cause why not.
You've now got some Bitcoin / Ethereum that holds value. The investor is now holding your worthless SpongebobCoin with the hopes that it will blow up in the future earning a load of money.
An investor is only going to take that risk if they genuinely believe in your ICO. It's a huge gamble on their part. They're going to scrutinize you, your team, your website, your experience, professionalism, haircut, public speaking, etc...
I'll give you an example - I was interested in investing in an ICO. I did my research, loved the team, nice website, all that jazz. Watched a few videos of the founder and liked what I was looking at.
I thought to myself, you know what? I'm satisfied - I like this. I think it will do the world a load of good and I think I can make some money at the same time. I'll finish this video and invest.
In the video the founder was talking about his coin and explaining blockchain technology to the interested audience. Half way through a lady asks a simple question. He ponders for a second.
As he starts answering the question, man reaches into his ear and starts digging around in there trying to find Blackbeard's buried treasure. What was probably three seconds felt like a lord of the rings trilogy run through - extended blue-ray edition with directors cut like.
I'm in disbelief as I watch this barbaric act. Man knows he's in front of an audience being recorded right?
The fun doesn't stop there either. When he finally digs out his Shrek candle, what does he do? Looks at his finger, admires his handy work and wipes it on his suit.
I couldn't invest. I couldn't allow myself to do it. Goes to show how fickle humans can be.
Avoid ICO Scams & How To Launch An ICO?
Currently anyone can launch an ICO. Since this space is so new, there aren't many regulations holding people back.
This is fascinating because it gives people freedom to pursue their ideas - an equal playing field. As long as you understand the basic fundamentals of the tech and can write an encouraging white paper - you have the same chance as everyone else at succeeding.
The problem with this low barrier of entry is any incompetent individual or team can setup an ICO and get a ridiculous amount of funding. With minimal regulations and laws, no one is holding them accountable.
They can mismanage the money you invested. They can do a runner and you'll never see or hear from them again. They don't have to continue development. You're out of luck. It's a scammers wet dream.
The crypto world is like the Wild West back in the day. Every geezer and his mum are running for the hills trying to find gold and get rich.
Scammers and get rich quick folks can be quite convincing. Avoiding the teams that are all talk and flair is how you make money here. You need to be careful and you need to do your own research.
Necessary Steps To Avoid ICO Scams
Check the website - if they don't even have a website, do a 360 and moonwalk out of there.
Stalk the team - are they real? Are the pictures legit or stock photos? Do they even have pictures? I've seen fucking avatars and forum names advertised as team members (exception for privacy coins). Ridiculous. LinkedIn is a good shout.
Explore their history - do they have any business or blockchain experience? Guy used to walk dogs two weeks ago, now he's suddenly a blockchain guru ninja.
You'll find ICOs like to use nonsensical buzz words to make them seem smarter than they really are. A good ICO breaks down their idea and the technology and lays it out so even your Grandma and her budgie can understand it.
Search social media - find the individuals, check if the team has a presence online. You want some sort of community interaction. Twitter, Facebook, Instagram, Reddit, Forums, Telegram, etc.
Check news sources on the individuals and the ICO itself - is anyone talking about them? Scammers leave a paper trail online. Are experts in the space denouncing the ICO? Have they even been noticed by the various news channels yet?
Read the whitepaper - is it polished enough to trust? I've seen whitepapers littered with broken English and poor grammar. How am I supposed to trust you with my money if you can't double check a sentence? The white paper needs to be clear and concise.
Make sure the whitepaper isn't a copy and paste job like Tron (TRX). Currently sat in the Top 10 by the way. Absolute shambles mate.
Launching An ICO
Give this section a read if you're looking at investing as well - it will help you comb out the the shit tier ICOs.
If you want to look into launching your own ICO, take note of everything I just mentioned above. That is what real investors look for.
You will be bombarded with questions about your ICO. Can you explain every little detail perfectly? Can you break down how all this technology works and explain it with a camera in your face? Eyes will be on you and you will need to be able to handle the pressure.
Do you have any connections - have you done any networking? You need to know people to get your name out there. You need to review your ICO with experts. You need their advice and recommendations.
Will your product / project / business actually benefit from an ICO? Don't chase the hype. You need a clear vision.
First thing you need to do is write a detailed white paper. Read the Ethereum (ETH) whitepaper for a good example, but don't copy and paste it you mug.
The white paper needs to include what your cryptocurrency can do for the world, how it works, why it will work, a future road map, and a million other things.
You're selling yourself and your project, so whatever you put together better be good if you want to succeed. This isn't a day before job like your school assignments.
Next you need a secure website. If you launch some bootleg website with a crappy free template we'll all point and laugh at you.
sickcoin.wordpress.org - give me a break man. Don't mess with my scroll bar and add a load of fancy rubbish. Clean and easy to navigate is what you're after. If you put ads on the website you are on another level.
Create a presence on social media. Interact with the cryptocurrency community as a whole - not just your community. If you don't have a community, you don't have anything.
Put together a team of respected experts who have experience with blockchain and the business you're trying to revolutionize.
Most importantly - hustle like there's no tomorrow. If you don't put in the time, energy, and work. You'll flop. Get to work mate, you've got years of grafting ahead of you now.
Cryptocurrency Investing Tips - Last Words
This article is all over the place, but it's all relevant when deciding which cryptocurrency to invest in.
Don't follow the hype, that's how you get burned. Do as much research as you can - blindly following influencers and forum talk will never end well. There is a ridiculous amount of money in this space and people are trying every strategy in the book to take yours from you.
Fear of missing out (FOMO) is a very real thing. Do not fall into this trap! Oh Ethereum just blew up by 60% overnight? I need to get in on that homie!
That train has come and gone mate, if you put money in now you'll have to wait a while for the next moon.
We'll end on the generic buy low and sell high line. Actually think about it though. Look at the cryptocurrency charts and look for the patterns. When the market is crashing is when you should be looking at buying. When the market is flying to the moon, that's when you should be selling.
Patience is an investors best tool and strategy.
I'm putting an article together discussing specific cryptocurrency investment strategies - stay tuned for that one.
Thanks for reading, comment down below if you're confused about anything I've said and I'll try make it more clear for you.
I feel like this article is incomplete, maybe I'll revisit it in the future. Am I being paranoid? Give me a hand if you think something is missing.
I love you all, hope you have a fabulous weekend. Check out my socials - Twitch always gets a special shout out. Man likes to game and talk crypto. Hit me up.
Here are more articles I think you'll like:
- Bitcoin Explained - White Paper Guide For Beginners
- Types of Cryptocurrencies - Payment, DApps & Tokens, Privacy, etc.
- Nano Explained - Beginner's Guide
- Keep Your Cryptocurrency Safe - Beginner's Guide