Initial Coin Offering(ICO) is the term used for unregulated means by which funds are raised for a new cryptocurrency. An Initial Coin Offering (ICO) is used by startups to overcome difficulties in raising regulated capital for the venture.
Virtual currency is the future of trading. But they are becoming too much, and posing a risk on security. Day by day, week in, week out, a lot of ICOs are being launched. Many of these ICOs are scams: trying to deceive people into thinking they might be investing in the next bitcoin.
Investing in an ICO is a great idea, but you must invest wisely, and not by GAMBLING away your hard earned money.
Early investors of bitcoins are happy millionaires today, as the price of bitcoin have escalated over the years. In 2010 it was worth just $0.39 per 1btc. Investors who bought as high as hundreds, thousands, or higher value of bitcoins then, are now smiling to the bank, especially if they converted some to cash last year November when bitcoin was clocking $20k mark. It is because of this success or in the other way; disappointment, that most people invest blindly in all kinds of ICOs, hoping to hit a jackpot someday.
All should be careful, and watch out on the kind of ICO we purchase. Some might be scam sites selling unusable points or coins to people; most of which comes with empty promises that ICO will increase in value, and will be available for trading with other coins later. THE BILLION COIN (TBC), is a valid example of these scam ICOs. They came out posing as a legit Fiat currency, and deceiving the gullible ones that 1 unit of TBC was worth $100m, and it will soon reach $1billion in 3 months because it keeps growing daily. They also said the price of the coin never falls. Seminars were even held to convince the minds of the weak in thought. The Big lie: If 1TBC is worth $100m as said, then why was it sold for a penny? This is one clever scam in the history of mankind, perfectly planned, and well executed.
People fall to these scam ICOs because of ignorance; but a large population of these victims are gullible, and covetous.
To know which ICO is good and save to invest in, let's look at the basic properties of a good ICO.
1. Transparency and versatility: Its source system must be open, and it must be regenerative. Any ICO that hides it's info, hereby becoming the sole miner or distributor of the coin, is only trying to rob people by selling a useless coin.
2. Public ledger: Valid transactions should be stored on a public ledger, but concealing and encrypting the identity of the owners. Cryptography should be available for verification of transactions.
3. Mining and proof-of-work system: To solve the problem of determining representation in majority decision making. If the majority were based on one-IP-address-one-vote, it could be subverted by anyone able to allocate many IPs. Mining is open source so that anyone can confirm the transaction. The first “miner” to solve the puzzle adds a “block” of transactions to the ledger. The way in which transactions, blocks, and the public blockchain ledger work together ensure that no one individual can easily add or change a block at will. Once a block is added to the ledger, all correlating transactions are permanent, and they add a small transaction fee to the miner’s wallet (along with newly created coins). The mining process is what gives value to the coins and is known as a proof-of-work. The majority decision is represented by the longest chain, which has the greatest proof-of-work effort invested in it. If a majority of CPU power is controlled by honest nodes, the honest chain will grow the fastest and outpace any competing chains. To modify a past block, an attacker would have to redo the proof-of-work of the block and all blocks after it and then catch up with and surpass the work of the honest nodes. To compensate for increasing hardware speed and varying interest in running nodes over time, the proof-of-work difficulty is determined by a moving average targeting an average number of blocks per hour.
4. Payment Verification.
Any ICO without these values is not a good investment, and it's a threat to investors, nothing less than a Scam. Beware!
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