More and more people are looking to invest in blockchain companies but there is still a lot of concern around the validity of ICOs. When it comes to making investment decisions, it can be pretty hard to separate the fact from the fiction. Here are a few common ICO myths, busted.
ICOs guarantee success
When you invest in an ICO there is absolutely no guarantee of success, in fact, an estimated 50% of all ICOs will fail, meaning you have a 1 in 2 chance of success. Whilst these figures should not scare you off, they should encourage you to exercise caution whether you are launching an ICO or investing in one. Do your homework and research and be sure of what you are getting yourself into before you put your money where your mouth is.
ICOs are quick
Whilst ICOs are often considered as a quicker way of raising funds when compared to Venture Capital methods, there is no way you can launch a successful ICO in a few weeks. It takes considerable time to write a whitepaper as well as to build up a large community and digital footprint that will encourage investors. You are looking at a minimum of 6 months for the pre-public engagement phase and at least 3 months for the post-public engagement phase.
Tokens and coins are the same thing
Many people make this mistake and use the term token and coin interchangeably, but they are not, in fact, one and the same. If you are looking to invest in it, or launch an ICO you need to understand the fundamental differences between them. A coin has a single utility and stores just one level of value, whereas tokens have more than one function and can store a range of value levels.
All white papers are factually sound
Whilst it can be easy to notice incorrect or fraudulent statements in a white paper, it can be harder to detect factually incorrect data that sounds right. TRON is a good example of a white paper that was actually plagiarized, but that seemed legitimate therefore diminishing the credibility of the industry.
All listing sites are created equally
There is a huge selection of ICO sites available to choose from, but not all are equally useful. Some sites just list the project, but others go above and beyond and give investors a lot of information to work with. When you check out an ICO site, be sure to check out any ICO reviews that can help you to understand how a site analyses and weighs any listings it chooses to display.