The Smart and Sensible Guide to Making Your ICO Investments Work
Saturday, 24 February 2018
In the flurry of new ICO (Initial Coin Offerings), only a layman can feel confident enough to rank the thousands emerging dApps with absolute certainty. As the startups of blockchain finance, ICOs are not only highly volatile, but also costly and insecure. To find an ideal way to manage an ICO portfolio, a diligent user needs to consult dozens of affirmed voices in the cryptocurrency industry, investigate the market thoroughly and understand the face of the blockchain technology.
Typical ICO Risks
If you are interested in ICO investments, on top of the market research, you need to think of your personal preferences and consider legal or geographical limitations. Regulators worldwide are imposing different “restrictions” to the dApps. Although they should be widely available because of their nature, varied fees for workable ICO investment plans make specific dApps good for some, but bad for other investors. Additionally, the value of dApps depends on developers’ skills. Some ICOs are based on solidity development; others require having additional complex coding skills that can raise costs.
Even when you have done all the homework, it’s not easy to make a solid decision. Metaphorically, a risk-minimal choice would require skills similar to machine learning algorithms. Solidity developers have already created over 1,100 dApp projects on Ethereum only; currently active or in beta versions. There is a lot to choose from.
Financial markets are prone to risks by definition. Multiply the risks for cryptocurrency markets by five to get a fair picture of how grateful it is to label ICO dApps as the best or the worst. Then again, the open technology can be generous to those who swim well in muddy waters. Feedback from tens of thousands of people active in ICO groups on social media channels indicates that the swarms of interest around some dApps get tighter, larger and busier, while swarms with less potential dissolve.
ICOs vs Wider dApp Use
Decentralization has transformed the conventional face of apps. Many dApps use solidity development to create smart contracts. They enable new ways of digital identification and exchange of digital assets.
When you are thinking of ICOs in wider terms, you can use several criteria to assess the potential of a new dApp. The dApp project should contain clear explanation of all aspects of the ICO, including details about the consensus algorithm, as well as the system of issued pre-mined tokens and earned tokens. As with any other crowdfunding project, if not more, a dApp should be accompanied by absolute transparency in the budget allocation.
Starting with a basic education in this area can save you from the troubles of having to compare fifty dApps without being able to come to a definite answer. Investigate the company to learn more about the developers and check the long-term use. Go for a team with a proven track record and never forget to collect user feedback - it is one of the most reliable tools for forming an unbiased opinion.
If you are interested more in the investment aspect of ICOs, gathering general knowledge (such as learning about the solidity development skills of the team) will not be enough. As an investor, you would be more interested in exchanges and wallets; looking for the best dApp that includes one or both of these elements.
Preferred Coin Choice, Secure dApps and Fee Structure
Not all dApps serve all ICO markets. For example, some are only for the solidity-based Ethereum, others provide several other tools to store, invest and exchange your coins. Consequently, if you have a preferred cryptocurrency, this will be the number one factor when choosing a wallet or an exchange.
To avoid typical mistakes of ICOs without intrinsic worth, you should always pay attention to how secure are they are and how affordable is the infrastructure. Some of the best cryptocurrency exchanges have unusually high fees, making users turn to those dApps with lower-cost portfolios. Simply put, expensive dApps violate the basic assumption of decentralization - fewer costs.
dApps with a Proven Track Record
Although Coinbase is one of the best user-friendly online wallets with a simple user interface, a number of card payment methods and strong security features, the high fees and wallets limited only to Bitcoin and Ethereum make it less popular.
On the other hand, the Jaxx wallet provides opportunities for receiving funds, QR code scanning and monitoring cryptocurrency holdings. It supports multiple cryptocurrencies, including Litecoin, Dash, Ethereum and Bitcoin Cash. The dApp is functional on all key OS and works as an effective cryptocurrency converter. Jaxx’s biggest disadvantages are the advanced-level skills needed to make the best use of it and the vulnerability: as a closed dApp, it’s less resistant to bugs.
Somewhere in-between, Exodus is a partially-open wallet for keeping over twenty cryptocurrencies in an easy-to-manage pie chart system. The integrated exchange helps you trade these cryptocurrencies within the dApp.
Web-based wallets are typically considered less secure than hardware wallets. The latter keep the private keys in a USB-like physical storage device. Successful examples include the Nano Ledger S (less expensive to buy) and the Trezor (more expensive to buy). Trezor is considered a security standard in the cryptocurrency industry.
With an industry-wide application, Delta is one of the best tracker tools for Bitcoin, Litecoin. Ethereum, and over 2,000 other ICOs. The $8 monthly fee, though, makes some users unhappy, despite the fact it’s open for ICOs that can’t be exchanged anywhere else.
There is no easy way to find a one-size-fits-all solution for creating and managing a good ICO investment portfolio. In general, most very good ones are based on solidity development. Therefore, when you are calculating the risks, at least keep in mind to invest in a dApp that comes from a team with skilled solidity developers.
This is a guest post by Michael Kordvani.
Ever since he was a child, Michael was captivated by technology. When the opportunity arose to spend his life writing about it, Michael didn’t hesitate. He now spends his time exploring and writing about captivating new technologies to introduce to the people.
Michaels insatiable desire for new technologies lead him to pursue a computer science degree at Queens College. His work has been published on various technology blogs across the web.