ICO Risks | Some Disadvantages
Investing in an ICO (Initial Coin Offering) is like a gamble. It has a win-or-loss chance. From the title itself “INITIAL”, it means that the project is not stating yet. Or to make it simple, it’s only a “Concept”. The idea is to raise funds from the investors by selling its generated tokens at the low price and promise to make the token`s value increase on the given time. Well, to be honest, its possible provided that the ICO is successful.
According to the article released by Bitcoin, almost half or 46% of the ICOs last 2017 failed. Leaving all its investor empty-handed. Yet, there are still ICO start-ups who are eager to be in the limelight. And the numbers are kept on increasing.
These are Some Disadvantages of Investing in an ICO.
- NO GUARANTEE
Since the project has not started yet, you cannot conclude that it will be successful with respect to the timeframe given by it whitepaper. There are no guarantees for the Token you invested to increase its value at the time when the ICO begins.
- NO RULES
Almost all counties around the world, still don’t come up with the rules governing ICO`s. Meaning, if the ICO failed its operation or come to a downfall, it's merely impossible for you to run after them and ask for your money back.
- PRONE TO HACKERS
We all know that ICO`s are built over the Blockchain which is decentralized or a public open ledger, given that all informations are impossible to manipulate, we cannot disregard the fact that in this world, there are talented hackers who are interested on this. They even hacked American Central bank before, which is said to be the most secured banking system in the world.
- MOST OF THE INVESTORS ARE NOT EXPERTS
Let`s just make this short. ICO somehow doesn’t care about who’s investing. As long as investors are capable to provide for their funds, they are good to go. It means that most of the ICO investors are only enthusiasts aiming to be the next millionaire.
- GENERATED TOKEN VALUE IS NOT STATIC
All of this is summed up to one word. “RISKS”. This article is not suggesting that you must turn your back from ICO investing. In fact, it aims to make investors aware that there are things like this to consider and challenge themselves to conduct more studies before engaging with ICOs. Besides, sometimes we tend to take risks in order to be successful.
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Hi guys! hope this article at least help you gain knowledge about ICO. There are lots of other cool sites, not only this blog, for you to check and hopefully will provide insights that you want to have. Cheers!