What do Paris Hilton, actor Jamie Foxx, rapper The Game, and boxer-slash-convicted-woman-beater Floyd Mayweather all have in common?
They’ve all recently promoted “Initial Coin Offerings” or ICOs, the fund-raising process by which a cryptocurrency token is sold to the public in exchange for capital (usually in the form of either bitcoin or ethereum).
Celebrities jumping on the ICO bandwagon doesn’t help the credibility of the cryptocurrency space as a whole. And I have to feel it’s a less-than-ideal introduction for those less familiar with cryptocurrencies.
I would also hope that – at a bare minimum – folks realise that these celebs aren’t doing all this promotion for free. To Paris Hilton, an ICO is just another commercial venture like her limited-edition fragrance ‘Can Can Bling’. These people are likely either given tokens for free, or allowed to buy them at a deep discount to the ICO price. So it’s in their interest to hype these tokens as much as possible.
There are plenty of extremely promising cryptocurrency projects both in the pipeline and already issued. These have the potential to completely displace entire existing industries, create brand new ones and deliver hundred-fold returns on investment.
But – like with stocks, for example – the reality is that the majority of what’s out there should be avoided. Just because you can buy, doesn’t mean you should buy.
For every Amazon or Google of the dotcom bubble era, there are dozens of failed Pets.com’s, or worse.
And I’ve been spending a lot of time finding which ICOs I think have the best potential. (And we have a report available that tells you about three of my favourites right now… see more here.)
This video below however, walks you through one that doesn’t…
It’s about project I came across recently and I put it together yesterday just to walk you through some of the things that I look at when doing a quick “sanity check” on a potential new ICO.
This review is far from comprehensive, but I wanted to share some of the obvious red flags that I look for in potential projects. It’s a quick primer on how to avoid the ICO equivalent of penny stock scams.
(I recommend watching this on a desktop computer rather than a mobile device – you’ll also have to excuse the parts in this video where I am clearly finding it difficult to contain my amusement at what I’m seeing.)