The world of Digital Currency has changed dramatically. I am unsure i should even be calling it 'The world of Digital Currency' anymore as it certainly doesn't resemble any currency i am familiar with – or world, It's more of an entire distributed finacial system now, a new digital economy even. Sure, there have been many out there calling it such for many many moons, hell! – i am certain i used the term a number of times on my own blog; but the fact is that it has never before felt so much like a real functioning economy as it does today. That's both concerning and exciting.
Entering the space today for many will be overwhelming, probably so overwhelming they will seek out professional help from those who they believe can help, that leaves an awful lot of potential for scam artists to enter the mix, not to say they haven't been here the entire time, Ive certainly had my fair share over the years, as have many of the innovators that i have
interviewed.
TEST FIRST
The scams persist, and likely always will however, once you as a digital currency speculator, user or investor/trader lose out to a scammer, you will quickly decide if this game is for you, and whether you want to keep playing. Those that stick around learn quickly the methods for avoiding loosing on a monumental scale by playing small initially, testing the waters, over time as confidence grows one can become susceptible to mistakes, not doing due diligence, not testing a large transfer first with a small pilot, to make sure all is well with the network, and in particular the addresses and wallets provided.
Not a week goes past with out hearing of another hack or scam where some newbie company throws up a site with an ICO in motion, collects Ether to their fund and then POOF! It's gone. Seems like a super easy way to raise a lot of money quickly then vanish with the proceeds claiming unforeseen simple user design miscalculations.
BAD ETHEREUM
All of this activity serves to give Ethereum a bad name in the long term (Untill the regulators catch up that is) Much like Bitcoin had, and still has to some extent, a reputation for money laundering and dark market activity Ethereums reputation could well end up going a similar way. Take the DAO hack of 2016, that ended in the actual Ethereum platform itself forking, resulting in two versions of the platform token Ether. One single contract on the platform resulted in the entire platform being unilaterally altered, at the time it seemed super bad, but it had to be done in order to return confidence to the growing market interest in Ethereum, no matter how much it pissed off the purists.
With all the recent ICOs emerging, (some 300 to date) a significant majority will end up in ruin, that's practically a given indeed many are designed only to raise as much Ether as possible to be cashed out and for the project to be abandoned, leaving the founders wealthy as fuck. So wealthy infact ,they can go on to do it all over again on an ever increasing scale.
So here's a simple three step solution to vetting an ICO, no need to invest in anything, but at least you can investigate as best as possible should you choose to invest anything at a later date.
- First do your homework on the people making the promises, are they even real people? These types of project call for a team of experienced, motivated and technically savvy founders. Learn as much as you can about them.
- Second, the ICO must solve a real-world problem in a way that cannot be done without the use of blockchain technology. Find out why they are using the Blockchain, is it just for the buzzword?
- Third, the solution should have a strong enough network effect so that its code can't be easily copied into a possible competitor. This is a tuff one as all code can be copied, can the ICO get out ahead of competition though?
So yeah! Investing in crypto and now ICOs is pretty dull, unless you find a project that stimulates your senses, something that your can get behind – and there is a lot of them to choose from, so read, read some more, then take a breath, go on holiday or something then read some more. Then figure out what you want to do.
DISCLAIMER
This post covers a token or element in the cryptosphere. The cryptosphere is new and exciting, but changes rapidly and often in ways that do not benefit users. By the time this article is published, changes may have already occurred. Most tokens in the cryptosphere are complete scams that are get-rich-quick-schemes for insiders. Often, we cannot know this beforehand and only later discover this. A person should only trade with money that they’re willing to lose because losses are guaranteed. If you choose to participate in purchasing a token in the cryptosphere, you should do so with the full expectation of a loss and you should also expect it to change in a manner that does not benefit you. There are however very few good ideas in the cryptosphere.