Why you shouldn't invest in that new ICO

Hello Steemians!

I stumbled upon this website icobox.io some days back. They offer a box solution for conducting ICOs. What this means in a nutshell is that they can help you plan and run a successful ICO. What caught my eye was their pricing, especially the basic package which cost 40 BTC + 3% success fee. I quickly accessed my calculator and got this result:

Price of Bitcoin = $10, 000
Price for Icobox basic package = 40 BTC
10, 000 x 40 = $400, 000.

I don’t know about you, but that’s a whole lot of money. I’ve read of how companies were making millions from the ICO trend. And I’ve also heard of scams and failed ICOs. What I didn’t read in those articles was that it cost this much to run an ICO. I scrolled down and then I found why icobox’s services cost this much.

They actually made good on their promise of running a successful ICO for you. Well, enough of icobox. Let me tell you why this is relevant to this post. Are the companies launching these ICOs doing what they promised? I haven’t see any yet.

“So, are they lying?”
“Yes and No?”

Yes
For the reason that some of them are just out to grab as much cash as they can. Every ICO has its road map – what the company plans to achieve at a particular period of time. Some…sorry…most of these companies don’t meet the deadline they’ve set for themselves. Some even postpone these deadlines for months and tell us. “We are working on it”. You as an investor can’t really do anything about it. Why? The tokens you bought are not securities. This translates to: “You gave me your money to actualise a dream, so be patient with me while I chill in the Bahamas tweeting about the progress of the company located in London.”

Maybe it’s because they’ve spent $400,000 running an ICO and will like to spend some time enjoying the profits before going back to work. Or maybe they don’t know how they will go about the dream they sold to the investors. I was reading the whitepaper of one of these new ICOs and there was a part that said, “We don’t know how we will do it yet, but we will find a way.” You collected millions and you don’t even know how to create the tech you promised? That sums it up for bad ICOs.

No.
There are some good heads in the ICO game. It reminds me of the Pareto Principe rule which states that, for many events, roughly 80% of the effects come from 20% of the causes. What this means is that only 20% of ICOs launched will eventually actualise what they sold to investors.

In conclusion, I will say ICOs are neither good nor bad. Investors just have to be careful of where they put their money. Do investors really care about valuations or the vision? Find out in my future posts.
Have a good day!