What is ICO? How to choose a crypto currency and make money on the initial sale of coins?

New crypto-currencies start literally every day and all of them need the support and attention of users, because it is on trust that all cryptoeconomics is built. To secure from the moment of launch not only confidence, but also financing, helps the ICO crypto-currencies - what it is and how it can be profitable for investors, we will talk about this article.

What is ICO crypto currency?

Long gone are the times when crypto-currencies arose on bare enthusiasm and demanded from their creators a small amount of cash injections. Today the idea of ​​creating new coins has turned into a kind of start-up, which can attract not only millions, but hundreds of millions of dollars. Everyone can try their hand at creating a new coin, but if it is interesting to others, the issue of attracting investments will disappear by itself.

If you are not new to investing, you probably heard about IPO, In which a company enters the market for the first time and begins selling its shares. ICO has a lot in common with the above described process, but since we have a case with the crypto currency, the very process of entering the market is quite specific. Initial Coin Offering, or the initial sale of coins, differs from IPO, First of all by the fact that the crypto currency is outlawed, does not have any status, and therefore there is no legal relationship in this case. Who will buy coins in this case? Strange as it may seem, the number of people who want to grow is growing every day.

The essence of the ICO is as follows. The development of any cryptocurrency is a costly process, and promotion also requires cash injections. But the main thing is that today a coin needs an audience of users from the start, because otherwise, with tough competition, the coin simply won't have any chances. If the idea of ​​the developers is really something interesting, then the crowd of investors will be ready to bombard them with money from head to toe. In turn, investors receive so-called tokens at a very low price - this is understandable, the cryptocurrency is still nothing of itself and its rate is as close to zero as possible. It should be noted that tokens are not the same as company shares, do not be confused - the investor does not receive any shares of the cryptocurrency system itself, he just gets coins "cheaply", which means that in the future he can get rich on the growth of the exchange rate.

But, everything would be too simple if you could invest, get coins and become fabulously rich in the future. In practice, a similar scenario unfolds in 10-20% of cases - otherwise the investor barely returns the invested funds, and most often goes into the negative. This is due to the fact that not all coins, or rather, even a few of them in the future become TOP, expensive, generally recognized. The majority, despite the genius of the idea and financial subsidies, are unable to shoot and go to the people - they are left with a miserable dragging out of days or an outright scam.

Even these serious shortcomings of the ICO do not stop those who want to invest their money in the crypt. The reason lies in the banal desire to earn, because if the coin becomes known and expensive, then the investor can easily increase its capital by thousands, tens of thousands of times. Do not you think it's tempting to invest 100$, And get 100 000$? I think the answer to the question is quite understandable, and many investors are willing to risk for this profit. Nevertheless, in most cases, the ICO should be treated as a donation, which may not bring anything, but can simply be gilded. And this is not an exaggeration - further, examples of the most successful and large ICOs in history.

The most successful ICO

Investors with great interest are involved in crypto-currency crowdsharing, and a striking proof of this is the large number of successful ICOs that in the recent past have collected serious amounts. To begin with, according to the estimates of authoritative publications, the stratapes associated with the launch of the crypt are launched this year at the frequency of 2,7 project per week (whereas in 2016 this indicator was 1,5). Of course, and the amount of investment in them significantly increased.

The first ICO start in history took place in 2013 - the money was then collected for the development of the coin Mastercoin. The idea of ​​the developers turned out to be successful and it allowed to attract 5$ Million. Such success inspired many followers and the active process of attracting large sums of money to the crypto-currency economy began:

• Ethereum - started in 2014 year. For a month and a half the project of Vitalik Buterina collected 18,4$ Million Investors were sold 60 million coins and, given that the airtime rate in its time reached 400$ Apiece, then many of the depositors became dollar millionaires.
• EOS - already in 5 days after the placement of the tokens it was possible to attract 185$ Million. At the moment, this is an absolute record among all crypto-currency ICOs.
• Bancor - the recent start in June 2017-th assembled 150$ Million
• Storj - managed to attract 30$ Million per week.
• Aragon - 25$ Million for 15 minutes after the start of the fees.
• Status - kraudfandilsya on the platform Eterium and led to its failure, but gained investment in the amount of 100$ Million
• Gnosis - the collection started, and already in 10 minutes was closed, since the amount of 12,5$ Million has been achieved.
• Brave - the fastest collection in the history of ICO: during 30 seconds investors invested 35$ Million is a real speed record.

Needless to say, investors who have given confidence to the above coins have earned very well. But this is not a reason to run all the way and look for some kind of ICO, in order to erase all the contents of your pockets in them. Not every project comes to success, many of the coins never reach the stock exchange, and investors have to admit losses.

How to make money on promising ICO crypto currency?

If you manage to successfully select an ICO project, then you can get superprofits even if you invest very little. Although the risks of participation in such a start-up are simply enormous, no one has canceled the old and time-honored principle of diversification: even if one ICO from 10 works, you will not simply beat losses, but also become rich - such a venture investment.

But about any income and diversification can not be said, if you deal with clean water scammers, and they are in the field of crypto-startups apparently invisible. Very often the project collects money and simply disappears, leaving investors bewildered - such coins were not even going to enter the stock exchange, since they were originally dummies.

In order not to run into a scam, pay attention to the following details of the ICO:

• The crypto currency must have its own website, and the terms of the offer (agreement and set of rules) are presented on it.
• Obligatory availability of documentation explaining the technical process of the existence of a particular coin - if "on paper" is not painted all the technical background, then most likely, it is not, and so you have scammers.
• Typically, the project collects a specific amount of investment, which is known in advance - the developers can not sell the investor an unlimited number of coins.
• It is worth paying attention to the people who are behind the development of the coin. Ideal if they have a certain reputation - no one will sacrifice it, so worthy projects will be offered to ICO.
• Transfer money only to the purse indicated on the site of the crypto currency - in any case, do not use the information from third-party sites, forums received in private messages or through spam mailing.

If you are going to invest in some of the coins at the stage of its pre-sale, you should carefully study all possible information about it. At the same time, it is important to read not only about what a fine coin is on the site of its own developers, but also to be interested in the opinions of users on the forums and in discussions. Strongly trust the commentators is not necessary - you should make a decision only - but to understand the location of the public to a specific ICO is worth it.

ICO crypto currency in 2017: what can be expected?

The pre-sale of coins is gaining popularity, and a logical question arises - what awaits the ICO movement in the future? It is already known today that 2017 was a real breakthrough for such startups, because compared to the previous year, the volume of investments increased 10 times and reached $ 1 billion - and this is just six months! This excitement was also facilitated by a sharp increase in the ether rate, which in the first half of 2017 became more expensive by 3 350%, and the success of many ICOs that raised hundreds of millions of dollars.

Nevertheless, many experts see ICO as pure evil, arguing that the initial sale is one of the factors that leads to the fall in the capitalization of the crypto economy. Today, the cryptocurrency market has experienced a tough correction, which, according to preliminary estimates, will not end as soon as we would like, or it may take several months. One of the reasons for such a drawdown is that after an active growth in the rate of coins that started through ICO, the first investors began to actively sell their coins and withdraw money offline. Take Ethereum as an example - if the price has risen by 3%, then hardly anyone will miss the opportunity to make a colossal profit and refrain from selling tokens. In this regard, there is an active outflow of funds, from which, in particular, the capitalization of the cryptocurrency world suffers.

The second controversial point is that it is very difficult to find out which ICOs will make a profit, and which seem to be pacifiers. This type of earnings is in the embryonic state and there is a lack of any regulators. Agree, it was much more convenient if there was a resource on which all worthy of attention ICO or an organization that would check ICO for authenticity were selected. While it is too early to talk about this, it is possible, in the future, the investment in the preliminary sale of coins will become less risky. Today, it remains to act at your own peril and risk, being tempted by the space profit that the participants of successful ICO projects receive.

In general, ICO is an interesting and promising direction for investments and adding such a tool to your portfolio is worthwhile, even if you do not have a lot of money. At the same time, it is necessary to take into account that this is a long-term investment, which may require several years of waiting.