Last year was a remarkable year for cryptocurrencies. Bitcoin exploded onto mainstreet. Wallstreet was generally miffed. The idea of cryptocurrencies I think is a good one, but it’s still early days. I’ve been intrigued by the idea of the ICO (initial coin ofering). As a startup guy, I have been through a traditional IPO (INKT in 1998) and been around fundraising for quite some time. The interesting thing about cryptocurrencies is that anyone can create one. Thus if you are building a startup you can combine the idea of raising money with the idea of creating your own cryptocurrency. At first this seemed like a stupid idea to me. Why go to the trouble to create a new currency just to fund a company or service? It seemed like a lot of work. However, it turns out that with etherium it’s not so difficult. Ethereum is created with the idea of a smart contract and this will let you essentiall create new currencies on top of ETH.
So consider this, everyone is piling into crypto because it’s going up like crazy and it seems like the next gold rush. There is no barrier to entry to invest, so nieve investors are just getting in because they can. So you have a frenzy of investing. Now you add fuel to that fire by allowing almost anyone to create new coins, new kinds of crypto.
Telegram ICO https://techcrunch.com/2018/01/20/telegram-ico-scammers/
About ICOs, it is complicate. First, there are so many that it’s impossible to not lose some good one. My preferred lister is ICODrops (https://icodrops.com/), while the most complete is ICOAlert (https://www.icoalert.com).
My criteria to chose where to invest is looking at what they do (if they start a new platform, a new protocol, etc.), how good is the team (as always) and, very important, how good are they in networking. Since we will see if a project works or not in a years or more, in the meantime the investment works if the networks is strong. Sometime there are project with ideas so and so and weak team, but very good in PR, which returned 20x to the early investor. In these cases, I buy in the ICO and when the token is at a good price I sell it. At the opposite, when I invest in a protocol, I expect that the price will continue to grow and I hold them. In general, when possible, it’s good to look at the code on Github, participate to the development chats (Slack, Telegram…) and watch what is going on. But it’s a job, so I do it from time to time, and this is why sometimes I miss good opportunities.
DADI looks interesting
The NY Times thinks the IRS should be worried about how users track their crypto currencies.