Cryptocurrency ICOs are quite popular these days. Not only are they accessible to the general public, but there is also a good chance to buy cheap tokens and see them appreciate in value over time. That does not mean ICOs are not without risks, though, as there are always some potential drawbacks when making investments. Below are some advantages and disadvantages related to cryptocurrency ICOs.
As the name somewhat suggests, an ICO is an initial coin offering. This means investors are often buying coins or tokens for a project that does not even fully exist yet. In most cases, the team will have some degree of code to show what the project will look like. However, there is no guarantee of projects ever being completed or even being embraced by mainstream users. This is a risk people need to be willing to take, as it may take years until there is an actual market for the project in question.
Speaking of investors, the majority of ICO investors are enthusiasts, rather than people with expertise. Backers have a financial stake in the process, but an ICO is not regulated or registered. This means users will not be reimbursed if something were to go wrong. This is something a lot of people tend to overlook these days, even though it has become less of an issue ever since smart contracts were used to lock up ICO funds.
Additionally, not everyone will be able to partake in every ICO these days. This is especially true on the Ethereum network, as a lot of ICOs sell out in less than 30 minutes. Partaking in such an event means users need to send a transaction at a much higher fee to ensure their transfer is picked up in a network block. This higher cost just to participate in an ICO is not a positive development by any means. Then again, it is only a minor drawback to most people, albeit still important to keep in mind.
The fact that ICOs are open to the general public means anyone in the cryptocurrency industry can partake if they can get funds transferred on time. This means the projects can raise funds in a completely decentralized manner, which is quite important. More investors from all over the world means there is less centralization, which is what cryptocurrency is all about.
Moreover, the concept of cryptocurrency ICO means people can help shape the future of this entire ecosystem. There is a wide range of different projects raising funds through an ICO, and every single project aims to bring something new to the table. Moreover, virtually all of these projects raise a lot of money in the process of their ICO taking place. Multi-million dollar projects are very common in the world of cryptocurrency ICOs.
Perhaps the biggest advantage to speculators, that is is how the tokens can be bought at a low price. Most exchanges will eventually enable trading of these tokens, where they can be sold for a profit if the project is successful. Ethereum-based tokens have a habit of appreciating in value by quite a magnitude. Value gains of over 1,000% over the course of a year or less are quite common, regardless of the projects being finished by that time. From a speculative point of view, cryptocurrency ICOs are more than worth getting involved in. This could ultimately become the downfall of these projects as well, though, but only time will tell if that is the case.
If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.
Go here to see the original:
Cryptocurrency ICOs Advantages vs Disadvantages - The Merkle
- Bitcoin Center NYC To Support Wednesday's CryptoCurrency Convention By Hosting After-Party [Last Updated On: April 11th, 2014] [Originally Added On: April 11th, 2014]
- As Bitcoin Soars in Value, Alternative Cryptocurrencies ... [Last Updated On: April 11th, 2014] [Originally Added On: April 11th, 2014]
- CryptoCurrency.org [Last Updated On: April 11th, 2014] [Originally Added On: April 11th, 2014]
- Cryptocurrency - Wikipedia, the free encyclopedia [Last Updated On: April 11th, 2014] [Originally Added On: April 11th, 2014]
- Qoinpro Cryptocurrency Faucet - Video [Last Updated On: April 11th, 2014] [Originally Added On: April 11th, 2014]
- Global Issues Cryptocurrency Project - Video [Last Updated On: April 11th, 2014] [Originally Added On: April 11th, 2014]
- cryptocurrency - Video [Last Updated On: April 11th, 2014] [Originally Added On: April 11th, 2014]
- PotCoin @ Cryptocurrency convention NYC, Good Audio - Video [Last Updated On: April 12th, 2014] [Originally Added On: April 12th, 2014]
- Bryce Weiner @ CryptoCurrency Convention 2014 - Video [Last Updated On: April 12th, 2014] [Originally Added On: April 12th, 2014]
- Unobtanium Cryptocurrency Explained - Video [Last Updated On: April 12th, 2014] [Originally Added On: April 12th, 2014]
- How To Create Your Own Cryptocurrency Co.Labs code ... [Last Updated On: April 14th, 2014] [Originally Added On: April 14th, 2014]
- CryptoCoinsNews - Cryptocurrency and Bitcoin News with ... [Last Updated On: April 14th, 2014] [Originally Added On: April 14th, 2014]
- Joe Rogan and Reddit Co-founder Alexis Ohanian talk Dogecoin, Cryptocurrency - Video [Last Updated On: April 14th, 2014] [Originally Added On: April 14th, 2014]
- How To Assess A CryptoCurrency: AltCoin Assessment Protocol. What's the next big AltCoin? - Video [Last Updated On: April 14th, 2014] [Originally Added On: April 14th, 2014]
- Reggie Middleton's UltraCoin @ NYC CryptoCurrency Convention - Video [Last Updated On: April 14th, 2014] [Originally Added On: April 14th, 2014]
- The future is Nxt (cryptocurrency platform) - Video [Last Updated On: April 19th, 2014] [Originally Added On: April 19th, 2014]
- CryptoCurrency Convention 4/9/14 - Dan Larimer Bitshares - Video [Last Updated On: April 20th, 2014] [Originally Added On: April 20th, 2014]
- CryptoCurrency Convention 4/9/14 - Xavier Hawk Permacredits - Video [Last Updated On: April 20th, 2014] [Originally Added On: April 20th, 2014]
- Does a cryptocurrency have the potential to revolutionize Ukraine? - Video [Last Updated On: April 20th, 2014] [Originally Added On: April 20th, 2014]
- Marscoin @ CryptoCurrency Convention NYC 4/9/14 - Lennart Lopin - Video [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- Vertcoin @ CryptoCurrency Convention NYC 4/9/14 - Joe Fisher - Video [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- UltraCoin @ CryptoCurrency Convention NYC 4/9/14 - Reggie Middleton - Video [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- iCoin @ CryptoCurrency Convention NYC 4/9/14 - Ryan Ridgeway - Video [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- Florincoin @ CryptoCurrency Convention NYC 4/9/14 - Joe Fiscella - Video [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- PotCoin @ CryptoCurrency Convention NYC 4/9/14 - Nick Iversen - Video [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- ZenithCoin @ CryptoCurrency Convention NYC 4/9/14 - Eddie Corral - Video [Last Updated On: April 22nd, 2014] [Originally Added On: April 22nd, 2014]
- Bryce Weiner @ CryptoCurrency Convention 4/9/14 - - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- Bitcoin Exchange CryptoRush Loses Millions of BlackCoin Cryptocurrency - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- Brock Pierce, Entrepreneur "FireSide Chat" @ CryptoCurrency Convention NYC - 4/9/14 - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- [OFFICIAL SPONSOR] Nick Spanos, Bitcoin Center NYC @ CryptoCurrency Convention 4/9/14 - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- AuroraCoin @ CryptoCurrency Convention NYC 4/9/14 - David Lio - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- DigiByte @ CryptoCurrency Convention NYC 4/9/14 - Jared Tate - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- Digitalcoin @ CryptoCurrency Convention NYC 4/9/14 - Andrew Davidson - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- BitAngels Co-Founder, David Johnson @ CryptoCurrency Convention NYC 4/9/14 - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- The Future of Cryptocurrency, Investing, and Crowdfunding (Toronto #BitcoinExpo Highlights) #548 - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- How to Set Up a Ripple (CryptoCurrency) Generating System! - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- --- The Great Debate --- Bitcoin vs Altcoin @ The CryptoCurrency Convention 4/9/14 - - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- Popularcoin @ CryptoCurrency Convention 4/9/14 - Joshua Nold - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- TimeKoin @ CryptoCurrency Convention 4/9/14 - Michael Brown - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- Infinitecoin @ CryptoCurrency Convention 4/9/14 - Loring Small - Video [Last Updated On: April 24th, 2014] [Originally Added On: April 24th, 2014]
- Bitcoin vs. Political Power: The Cryptocurrency Revolution - Stefan Molyneux at TNW Conference - Video [Last Updated On: April 26th, 2014] [Originally Added On: April 26th, 2014]
- TNW - Stefan Molyneux - Money, Power and Politics The Cryptocurrency Revolution - Video [Last Updated On: April 26th, 2014] [Originally Added On: April 26th, 2014]
- Coinnext Cryptocurrency Exchange Coming Soon - Video [Last Updated On: April 29th, 2014] [Originally Added On: April 29th, 2014]
- The Mises View: "Taxing Cryptocurrency" | Jeff Deist - Video [Last Updated On: May 2nd, 2014] [Originally Added On: May 2nd, 2014]
- mTrader.org - Cryptocurrency Mining System - Video [Last Updated On: May 2nd, 2014] [Originally Added On: May 2nd, 2014]
- CS 171 Final Project: Cryptocurrency Visualizations - Video [Last Updated On: May 3rd, 2014] [Originally Added On: May 3rd, 2014]
- Cryptocurrency Explained The Tech Guy 1046 - Video [Last Updated On: May 3rd, 2014] [Originally Added On: May 3rd, 2014]
- Know How 74 Cryptocurrency - Video [Last Updated On: May 4th, 2014] [Originally Added On: May 4th, 2014]
- CryptoCurrency of the World Unite! - Video [Last Updated On: May 9th, 2014] [Originally Added On: May 9th, 2014]
- BBT Presents: Ode to Cryptocurrency - Video [Last Updated On: May 13th, 2014] [Originally Added On: May 13th, 2014]
- Scryptify Cryptocurrency Video - Crypto Currency Exchanges - Video [Last Updated On: May 13th, 2014] [Originally Added On: May 13th, 2014]
- Bitpagar Cryptocurrency - Video [Last Updated On: May 16th, 2014] [Originally Added On: May 16th, 2014]
- How to Mine Cryptocurrency Safely - Video [Last Updated On: May 17th, 2014] [Originally Added On: May 17th, 2014]
- Bunnycoin - Innovative New Cryptocurrency - Video [Last Updated On: May 17th, 2014] [Originally Added On: May 17th, 2014]
- Nxt cryptocurrency platform: Proof of Stake mining system - Video [Last Updated On: May 18th, 2014] [Originally Added On: May 18th, 2014]
- Violincoin - The first cryptocurrency for musician - - Video [Last Updated On: May 21st, 2014] [Originally Added On: May 21st, 2014]
- The Cryptocurrency Store (Spanish/Espagnol) - Video [Last Updated On: May 22nd, 2014] [Originally Added On: May 22nd, 2014]
- Cryptocurrency: Get Mining! - Video [Last Updated On: May 22nd, 2014] [Originally Added On: May 22nd, 2014]
- How To Trade CryptoCurrency: Sign up to a safe and reliable exchange for trading CryptoCurrency - Video [Last Updated On: May 22nd, 2014] [Originally Added On: May 22nd, 2014]
- Cryptocurrency and Nonprofits with Eric Nakagawa - Video [Last Updated On: May 23rd, 2014] [Originally Added On: May 23rd, 2014]
- The Cryptocurrency Store - Video [Last Updated On: May 23rd, 2014] [Originally Added On: May 23rd, 2014]
- Bitcoin Song - The Cryptocurrency Store - Video [Last Updated On: May 25th, 2014] [Originally Added On: May 25th, 2014]
- Videoconferencia Cryptocurrency 201243946 - Video [Last Updated On: May 27th, 2014] [Originally Added On: May 27th, 2014]
- VideoCharla Jesus Ramos Cryptocurrency - Video [Last Updated On: May 27th, 2014] [Originally Added On: May 27th, 2014]
- Sudbury Cryptocurrency Conference, May 26th: Ethereum - Video [Last Updated On: May 30th, 2014] [Originally Added On: May 30th, 2014]
- 2014 Cubieboard 1, 2 - Mining Peercoins (SHA-256 based) Cryptocurrency - Video [Last Updated On: June 2nd, 2014] [Originally Added On: June 2nd, 2014]
- 2nd Salaries in CryptoCurrency - Video [Last Updated On: June 2nd, 2014] [Originally Added On: June 2nd, 2014]
- The Best Cryptocurrency Trading Platform - Video [Last Updated On: June 3rd, 2014] [Originally Added On: June 3rd, 2014]
- Cryptocurrency business forum - Video [Last Updated On: June 4th, 2014] [Originally Added On: June 4th, 2014]
- Cryptocurrency Opportunities in Southeast Asia | John KIM - Video [Last Updated On: June 7th, 2014] [Originally Added On: June 7th, 2014]
- Facebook Approves Cryptocurrency Tipping Apps -- Bitcoin Weekend In San Francisco - Video [Last Updated On: June 8th, 2014] [Originally Added On: June 8th, 2014]
- Wolf of Wall Street & Cryptocurrency w/ Patrick "PK" McDonnell - Video [Last Updated On: June 9th, 2014] [Originally Added On: June 9th, 2014]
- BankNote CryptoCurrency Review - Video [Last Updated On: June 13th, 2014] [Originally Added On: June 13th, 2014]
- CryptoCurrency 4 Housing for Father's Day! - Video [Last Updated On: June 13th, 2014] [Originally Added On: June 13th, 2014]
- Hyper CryptoCurrency Review - Video [Last Updated On: June 14th, 2014] [Originally Added On: June 14th, 2014]
- 0NE " EPIC " (HD dubstep mix) spot - a cryptocurrency with an Engine - Video [Last Updated On: June 15th, 2014] [Originally Added On: June 15th, 2014]
- Bitcoin,Litecoin mining rig cryptocurrency 2500W system, 6x 280x ASUS Beast 2014 - Video [Last Updated On: June 17th, 2014] [Originally Added On: June 17th, 2014]
- The Rundown Live #281 Tatiana Moroz (Chemtrails,CryptoCurrency,Anti-War) - Video [Last Updated On: June 19th, 2014] [Originally Added On: June 19th, 2014]
- Neutrality Coin New Alternative Cryptocurrency - Video [Last Updated On: June 20th, 2014] [Originally Added On: June 20th, 2014]
- Cryptocurrency Update - Buy Low, Sell High! - Video [Last Updated On: June 21st, 2014] [Originally Added On: June 21st, 2014]