7 Red Flags to Watch For When Investing in ICOs 3 3649

investing in icos

For many people thinking about investing in ICOs, it may be their first time investing. When traditional opportunities are only open to a selective few with a high net worth, cryptocurrency has democratized investing for all. But it also means that there are a lot of first timers out there not sure of what to look for when they part with their cash.

81 percent of ICOs end up becoming scams. That’s a pretty grim panorama. You have to have an iron cast stomach to want to continue investing in ICOs. But, if do you want to try your luck and see if you can back a winner, here are seven red flags to watch out for first.

1. Too Many Buzzwords

“Decentralized,” “immutable,” “distributed,” may all sound like very important words, but you need to make sure you understand what they really mean. And even more importantly, that your ICO team does as well. There’s been so much marketing hype surrounding Bitcoin and the blockchain, that many people have fallen victim to it, including the ICO startups themselves.

They may be in love with the idea of no regulation or centralized authorities, but how important is it to their actual business? And can they demonstrate a clear way of using the technology? In short, is it more than a fluffy concept on a white paper?

2. Is Their Token Really Needed?

It may be hard for a layman investing in ICOs to assess whether an ICO’s token is really needed. But, try to examine the business proposal. Could it be carried out without using cryptocurrency? What function does the token have within the actual business? Is it being built on a new platform, when it could really be built on Ether? If the ICO has a useless token it’s chances of failure are close to 100 percent.

3. An Unconvincing Management Team

This is pretty much investing 101 in any kind of area. Most top investors in IPOs will study the management team to make sure it has the right balance of passion, leadership, and technical knowhow. While an individual investor may not be able to assess this, be sure that the ICO actually has team members on their site.

If the people don’t even appear on their page, it’s quite possible that they are scam artists. And if they do appear, be sure to run a quick background check. LinkedIn or Google should be enough to at least make sure you’re on the right track.

4. Ultra High Reserves

It could be a good thing that your prospective ICO team has a high amount of reserves. But this depends on their plans to use them. If the funds are allocated to use throughout the roadmap, and not just in the early stages, that’s a good sign of intent. But, if there’s no explanation in the white paper or anywhere else about how these funds will be spent, you could consider ultra high reserves to be a red flag when investing in ICOs.

5. No Code

If there’s no code to support the idea behind the ICO, it may never materialize into something more than an idea on a piece of paper, or a fancy website. At the very least, your ICO should be able to display some technical knowledge. This means demonstrating their ideas with some working code. Being able to write the code required is a basic prerequisite and no company should be asking for finances before showing that they can translate their ideas to code.

6. A Long and Confusing Roadmap

There may be no hard-and-fast rule when it comes to how long a roadmap should be. But make sure that it makes sense and is coherent. Generally speaking when investing in ICOs, you want to get behind something that’s aiming for about two years to get off ground. If it’s longer than that, consider it carefully and ask a lot of questions.

An ICO with a five-year long roadmap may not have a plan for solving problems should it flounder after six months. And that’s the point at which they could easily run with investor money before the project ends.

7. The Same Old Faces investing in ICOs

If you’re flicking through ICOs and you see the same faces appearing on the advisory board, that could be a red flag. While it could be genuine, there’s also a possibility that the advisors are trying to profit from as many projects as they can. Don’t give them your money, too.

ICO investing isn’t for the faint-hearted and it shouldn’t be done on a whim or an instinct. Take some time to do your research, watch out for these seven red flags, and you may just come out on top.

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Christina is a technology and business communicator who has worked with high profile ICOs and blockchain influencers to break industry news.


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Making the Swytch to Sustainability 4 98

You might think a US President installing solar panels on the White House would signal a sea of change in renewable energy, but with Jimmy Carter’s loss in the 1980 election, the panels came down and haven’t been up since. It’s puzzling that an industry that has the potential to save the planet isn’t thriving, even after decades of development. Especially when one considers how much the technology has improved, with renewables set to be cheaper than fossil fuels in a few scant years.

The reasons behind this are numerous. Many governments remain suspicious of the technology, no doubt thanks to strident lobbying by the fossil fuel industry. When governments have taken action, as with the US under President Obama, the results fell short of admittedly lofty expectations. And the country’s CO2 emissions are set to increase 1 percent in 2018 after a brief period of decline.

However, even the most effective government in the world would find it hard to push the planet into a greener tomorrow. Governments only hold sway over the land within their borders, and even if a major player like China enacted sweeping reforms, it would do little to change matters in the rest of the world. Blockchain technology is uniquely poised to organize global governmental efforts, thanks to its inherent data security and decentralization.

“The main purpose of blockchain in governance, at least in its current guise, is data integrity,” says Jon Martindale in Digital Trends’ “Blockchain Beyond Bitcoin” series released this week. “If more government entities can rely on the integrity of data from partner agencies, then sharing information should make many facets of government more efficient, while also improving security,” Martindale continues.

If we’re going to see a fundamental shift in world energy production, a system that transcends local governments by democratizing data and adding efficiencies offers a significant step forward.

“It turns out that much of the world agrees that we need a reduction of carbon – that’s what cities, countries, and corporations like Microsoft want to achieve. But it’s a very tough objective function for the world to solve for, because if you think of the incentive structure – it’s local – it can’t be traded across geography, so it’s inefficient and temporal,” says Evan Caron, Co-Founder and Managing Director at Swytch, a blockchain platform that verifies and rewards the production of sustainable and renewable energy.

How Green is Our Valley?

Swytch solves one of the most significant factors in lagging renewable energy adoption – the lack of a global and easily tradable incentive mechanism.

The solution is four-fold. First, Swytch collects data from renewable energy producers using existing smart meter technology. This data is ‘stamped’ onto Swytch’s blockchain, then verified and evaluated by a collection of open-source algorithms. Once the algorithms determine the amount of clean energy produced (and by extension the amount of carbon displaced) a corresponding amount of crypto-tokens are minted and delivered to the energy producer.

The tokens are ERC20 compliant and can be converted into fiat currency, other cryptocurrencies, or invested into other renewable projects. In a way, Swytch is the opposite of Bitcoin. Instead of using proof of work, which generates an obscene amount of CO2, Swytch uses proof of production, rewarding reductions in carbon emissions.

The incentive model is scalable, too – everyone from homeowners with solar panels on their roofs to heavy industry leaders able to take part. Entire cities are on board, including six in South Korea, as well as parts of Austria and Germany.

Data is Power

Another issue plaguing renewables is the lack of comprehensive, trustworthy data. It’s currently difficult to gauge where the most energy is being produced and what types of energy is most efficient.

Swytch is seeking to change that through its data collection feature. Every bit of information gathered from energy producers will be made publicly available in order to provide a shared, objective system that anyone can learn from.

As Evan notes, “Anyone in the power business realizes that the more good data there is, the better the whole system is. The data that’s out there is not that great – it comes in slow increments. What we’re betting on is that people want to share the data and if they’re getting compensated for it, they want to do it even more.”

While Swytch’s data aggregation techniques have the potential to revolutionize how information is gathered and shared in the renewable energy market, it’s the platform’s ground-up incentivizing structure that has the most disruptive potential. Through tokenization and the blockchain, Swytch can do what others have not – transcend borders, local politics, and the lingering power of oil and gas conglomerates to bring the world closer to 100 percent sustainable energy.

Theft, Hacking & Scams – Oh My! Is It Safe to Invest in Crypto? 5 2014

is it safe to invest in crypto

According to figures released by Crypto Aware, a staggering $1.7 billion of cryptocurrency has been stolen since 2011. But what does that mean? Let’s give that number some context. When you consider that cyber crime in general cost the world some $600 billion in 2017 alone, the figure seems a little easier to swallow. But it still begs the question–is it safe to invest in crypto?

It would be a fool who followed the advice of even the most bearish of investors when it comes to the crypto markets, since investing in crypto is extremely problematic. With nine in ten ICOs floundering soon after launch and a recent study reporting that 81 percent of them end up as scams–the question is it safe to invest in crypto seems to be already answered.

Blockchain – The Most Secure Technology?

Paul Brody, global innovation blockchain leader at EY rather succinctly said, “If blockchains are so secure, it’s reasonable to wonder why you keep reading about all these big hacks and thefts and criminal activities… While blockchains are themselves very secure, they operate in an ecosystem that still has many weaknesses, including human error.”

Since hearing about the “immutability” of blockchain and then realizing that there are certain circumstances in which it is not, in fact, immutable, some things have changed. Blockchain is still generally agreed to be the safest technology we have. However, it’s still in its infancy and the secondary software, like wallets and exchanges, that are used with it are vulnerable to attack.

Is it Safe to Invest in Crypto? Case in Point – Coinsecure

Oh, the irony. That Indian exchange, “Coinsecure,” should announce on its website, “We regret to inform you that our bitcoin funds have been exposed and seem to have been siphoned out to an address that is outside our control,” should be enough to make anyone think twice. Nearly $3 million were stolen from its bitcoin wallet this month, the biggest theft in India so far. This will do nothing for its floundering virtual currency market.

The exchange that has more than 200,000 users that trade daily on its platform lost more than 430 bitcoins, stolen from a password-protected wallet.

Not good news for users and not good news for the Indian cryptocurrency market, which is already on the verge of discussing a cryptocurrency ban. The Reserve Bank of India has forbidden banks to trade on cryptocurrency exchange sites and forced them to wind down all relationships over the next three months.

Other parts of Asia have also suffered damaging blows, particularly Japan, whose exchanges were subject to a colossal theft, equalling $530 million.

But if Losing Money is Scary – What About Data Theft?

If Equifax and Yahoo are anything to go by, we’ve already had a taste of what it’s like when data gets stolen. So, when we hear bold claims about blockchains holding all our information and being impossible to tamper with–what’s to stop the cyber criminals from stealing those blockchains and holding them hostage?

One thing is very clear in this new horizon. Storm clouds can descend at any moment and you have to be prepared. Is it safe to invest in crypto? Perhaps that’s not the right question anymore. “Is the technology behind it going to be regulated? And, if so, how?” may be more pertinent to ask.

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