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Pros and cons of investing in an ICO

Oct 14, 2017 Posted /  7662 Views

Pros and cons of investing in an ICO

Cryptocurrency ICO is a craze these days. Organizations, startups, and companies nowadays, have started these crowdfunding methods where they release tokens, and investors buy these tokens with cryptocurrencies, and in return, they hold the tokens.The company releases a white paper, in which they mention about the distribution of the funds that will get collected in the ICOs. However, investors should invest and buy tokens from these ICOs only after knowing the purpose of the ICO and knowing about the company and its motive. If you are new to the ICO, know more about it here.

Here are some pros and cons of investing in an ICO:

Pros of an ICO:

  • Gives chance to budding projects:  We can consider of what Ethereum has achieved in the last year. It became the second most powerful cryptocurrency in the world to offer a platform for DAPP creators to create their projects. It is actually becoming the platform where the future will be created. All this got commenced because of an ICO.

  • It doesn’t need unneeded paperwork: Many projects don’t get accomplished for the reason that they get caught up in the red tape. For raising funds through IPOs and crowdfunding the project developers need to go through a lot of paperwork and more often than not, they just don’t acquire the documentation that is needed to collect funds for their project. And for ICOs, all that you need to do take part in an ICO is create a white paper (It contains all the details of your project) After that anyone can read the white paper as well as choose to invest in the project if it interests them.

  • Clique building: It offers the project creators a chance to build a community for  their projects. Also, the members of the community can have a real word in the direction of the projects and also keep the creators responsible.

  • Disclosing projects: The advertising that surrounds an ICO can work wonders for the exposure of the project. The greater the exposure, the more the people will recognize the projects. This increases the number of probable investors.

Cons of an ICO:

  • They attract a lot of scammers: For the reason that there is so less paperwork involved in ICOs it entices many scammers who can create a bogus white paper and also make off with a lot of money.

  • Based on pure prediction: If you are investing in an ICO you are investing in the idea of the project. AT the beginning, you first read the white paper and then if you think that the team is plausible and the project has some promise then you can invest.

So, before investing in an ICO refer the white papers and also interview the team involved with the particular projects that are up for ICOs and then only invest your money.

Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .

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Tags: ico initial coin offering ico pros ico cons

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