Common Mistakes When Investing in ICOs
The Crowdholding Guest Blogger Series invites influencers and innovators to educate our audience and provide insights into industry trends. Become a Guest Blogger for Crowdholding! Get in touch via firstname.lastname@example.org
Since the release of Bitcoin, Cryptourrencies have become an integral part of online markets and community discussions. Once Bitcoin became a mainstream online currency, the demand for virtual money has soared, unlike any other financial asset. Even the federal governments have been sidestepped and now they face the threat of a newly emerging online economy. One of the biggest fears with the cryptocurrencies is that the limited level of regulatory oversight could potentially lead to a parallel financial system being created across the world.
A cryptocurrency is often launched along with a product or service. Community members and investors can use the cryptocurrency for purchasing the product or availing the services. When Bitcoin was launched, it was issued with a very wide coverage. Since then, many new alternative coins (also called as altcoins) have been created. Every altcoin was launched with minor changes in the features of the Bitcoin. Among the numerous coin launches, there were many coins which failed to attract investor interest.
What is an ICO
An ICO is a process for issuing a virtual coin or a virtual token to online investors. ICO stands for Initial Coin Offering. An ICO is like the issue of shares and fixed income securities in the financial markets. When an ICO is launched, the coin is promoted in the crypto community by showcasing the features and the benefits that it offers. Typically, a virtual currency is used in place of an actual currency (also termed as Fiat money) with other users involved in the project. This allows the members to transact among themselves using the virtual money. Interested investors can choose to be a part of this project by investing in the ICO. A white paper is also released among the community. A white paper has all the information about the coin and is like a company prospectus. This provides the investor with the necessary information about the crypto coin.
Common Mistakes in an ICO
Every potential crypto investor believes that one can become rich by buying any online currency. However, this is not true. Below is a list of common mistakes that an investor makes in an ICO.
Mistake 1: Avoid Falling for a Scam
This is definitely a mistake to avoid. Every investor should stay away from investing in an Initial Coin Offering that even remotely appears to be a scam. An investor should perform a detailed background check about the currency as well as the developer. To start with, a quick search on the internet about the currency can shed some light. Information about aggrieved parties who have invested in the virtual currency can be found online. There are many online reviews from users across the world. There are also websites that provide this information to investors. If you can’t find any listed scams online, then do not get complacent. Some more background checks must be performed.
Once you have done some research on a crypto coin, then you will come up with many more questions. Do not be shy to approach the other members of the project for clarifications. Voice your opinions and concern to the online community and get it clarified. All genuine coin issues tend to address investor concerns. Members or owners are always available on social media platforms like Facebook, Twitter, LinkedIn, and others. There are dedicated platforms as well. The cyber community is especially active on websites like Slack, Bitcointalk, and GitHub. However, if you do not end up getting any response to your queries from any of these avenues, then it is a serious red flag.
Never share your personal passwords or pin numbers online. This is not restricted to only the crypto space. It is applicable for all financial or monetary transactions. Sharing your passwords or personal identification numbers over the internet can prove to be hazardous. You might end up having your account hacked or something worse than that. There are many impostors online who claim be to part of the ICO. They might probe you for personal information with the intent to access your account and steal from you. So, avoid sharing your personal information on social media platforms.
Mistake 2: Transferring funds from an Exchange to an ICO
This is another mistake that many investors end up doing. Never transfer any funds or ether through an online exchange when investing into Initial Coin Offering. This creates some confusion for the owner of the coin. Since the payment is done through the exchange, the owner is unaware of the address where the virtual currency must be sent. It is advisable to first transfer your ether to your personal wallet. The ICO funding can be done by making the payment through the wallet. This way, the owner has the address of your wallet and can transfer the virtual currency directly into your personal wallet.
Mistake 3: Not all ICO’s accept other cryptocurrencies
Since the popularity of Bitcoin has soared, people assume that almost all of the coin offerings also accept Bitcoin or other alternative coins as a mode of payment. But this is not true. As a matter of fact, one of the most common currency for investing is Ether. Ether is a token on the Ethereum network. Ether is much a highly prominent token in comparison to other virtual currencies. One of the reasons for this is because many of the initial coin offerings are launched using an Ethereum Blockchain application development Network. Of course, there are a few ICO’s which do accept virtual coins or other crypto tokens. But this will limit you to which ICOs you can invest into.
Mistake 4: Sending funds to the wrong address
This is not a fundamental or technical mistake. Pay attention to the receiver’s wallet address where you are transferring your funds. The information on the account where the funds must be transferred can be found on the website of the cryptocurrency.
CrowdholdingCrowdholding connects the crowd with entrepreneurs, allowing you to give feedback and ideas for a future share.
ITF excelled with Crowd Wisdom
TailoredInk ICO Community Management
IronX ICO Social Media Marketing
Aerum ICO Influencer Marketing
Jarvis built with the crowd
ySign engaged the blockchain crowd
6 Ways to Earn Crypto For Free
Common Mistakes When Investing in ICOs
Connectjob joins Crowdholding
Week in a Nutshell & Smart Contract
Opporty joins Crowdholding
Getting to Know our Users
SmartCash joins Crowdholding
Bitcoen.io joins Crowdholding
What is a Smart Contract?
How to Create an ICO - Part 3 - Marketing
How to Create an ICO - Part 2 - The Two "W's"
How to create an ICO - Part 1 - The building blocks
Invest Time, Not Money
What alternatives are there to financing your business?
What is an ICO? And should you invest?
Blockchain technology : changing the world of business silently
Crowdholding’s Pre-Sale — A Case Study
How to become a Crowdholding supporter: Part 3 exchanging ETH for YUPIES
China ban on ICO’s : Not all Doom and Gloom?
How to become a Crowdholding supporter: Part 2 Buy some Ether (ETH) on Coinbase
How to create a task on Crowdholding
How to become a Crowdholding supporter: Part 1 creating a Ethereum wallet on MyEtherWallet.com
How to create a project on Crowdholding
Cryptocurrencies and their value
What is Crowdholding?
What is a White Paper? And do you need one?
What can CEO’s / Entrepreneurs learn from athletes?
How to start my own business? Part 3. Validating Your Business Idea
Top 10 career mistakes to avoid
6 Benefits of a Sharing Economy
How to start my own business? Part 2. Factory for ideas
Startup Promotion and Content Marketing Strategy
How to start my own business? Part 1. Five simple rules
The Year Capitalism could have Changed
Robots & Work: Jack Ma Predicted The Emergence of Robot-CEO
Startup Psychology: Why Entrepreneurs will save the planet?
Billionaire's School: it's hard to be the first
10 interesting sport startups that will rule 2017
30 reasons to be an online entrepreneur
How to chose a dating site?
You should know this striking marketing trend
10 reasons to join Crowdholding if you are a student
How did 67,000 people create the first crowdsourced melody?
Launch a startup with a partner, never alone.
Collaboration solves education problems with flying colors!
Hollywood movie from your smartphone?
Design your room the way you want it!
Hi, Your business is now a unicorn!
Hi, You're Hired!
Don't want to change the world for the better? You can stop reading now.
Sharing Economy is not a niche, it's the future
📊 What if karma was 🆚 worth something? 🤜🤛
Raise capital, preserve equity
5 marketing strategies for successful contact with Millennials
Why 75% of new products are doomed to fail?
Small Business Staffing Opportunities
What are Crowd Currencies?
Mass Collaboration leads to unprecedented innovation
Alternative Finance: Equity vs Crowdshare Crowdfunding
Co-creation between the crowd and small businesses
THE RELATIONSHIP BETWEEN IT AND CO CREATION
Corruption on Wall Street: The Stolen American Dream
To own or to rent, trends in sharing economics
Crowdsourcing a girlfriend
CROWDSOURCING IN FASHION
CrowdSourcing Trends 2020
Peer-to-peer journalism: What and how?
Peer-to-peer in the fashion industry
The Peer-To-Peer Marketplace Revolution
The relationship between Co-creation and Innovation
CROWDFUNDING AND VIDEOGAMES
NON-EQUITY CROWDFUNDING CHANGING FASHION BUSINESS
Revenue-sharing vs Reward-based crowdfunding
Blockchain application in Media industry
Blockchain Technology & Crowdfunding
Creative marketing through Crowdsourced Content
JOBS OF THE FUTURE
Alternative finance for small businesses
WHY CO-CREATE? – A message to the Crowd
Think Tanks and Benefits
Empowering Global Citizens to Improve Education
THE EVIL WALL STREET
Co-creation in Tech
Co-creation and Innovation
WHY CO-CREATE? - Benefits for Small Businesses
Co-creation in the Fashion Industry
Crowdholding vs Wallstreet
Make a brand your brand
The way you earn rewards has changed!
The task has changed to a new rewarding structure. Please read the following rules:
Voters get 35% of the reward
Commenters still receive the majority of 65% of the reward weight, while voters 35%.
You receive only 7 upvotes and must vote what you think are the best answers
You now have a limited amount of upvotes. You won’t see the other user votes until the task expires. If you vote the top half comments you will receive a portion of the 35%.
Top 50% upvoted comments get bigger share
Our algorithm gives top 50% upvoted comments more rewards than the bottom 50% comments.
Give me an example with numbers
Upvoters get 35 % of the reward.
65 % goes to the commentors.
Half of the reward is gained from bottom 1/2.
Upvoters get nothing
1/2 of the reward pool for this segmentis distributed among top 1/2
There is a task with 1000 Reward.
Let’s assume Top 1/2 recevies 70% of all upvotes.
Bottom gets 30 %. But because half of the reward goes to Top 1/2 that makes the final numbers more like Top 1/2 gets 85% (55.25% for commentors, 29,75% for upvoters) and bottom gets 15 % of the final reward.
If there’s 100 upvotes:
1 upvote that upvotes a comment in Top is worth around 12 Yups (circa 8 goes to commentor, 4 goes to upvoter)
1 upvote that upvotes a comment in Bottom is worth 5 (All goes to commentor).
Reminder about our Moderation
If you upvote a comment that’s reported as Spam or comment that should not be rewarded (eg. “Good job” comments) you will lose your right to be rewarded for this task.
We hope you like this new system and it brings you lots of fruitful discussions and reward you fairly.
Do you still have questions? Read more detailed explanation at our helpdesk
All the best,
Your Crowdholding Team