3 Reasons Why ICOs Are A Bad Thing For The Cryptospace

Today I want to talk to you about ICOs and why I think they are a bad thing for the whole cryptospace. If you are a fan of ICOs, relax. I am going to post a piece about the positive aspects about ICOs tomorrow. But to make it crystal clear in the beginning:

I am not completely against ICOs! This is just a small criticism!

1. Whale Investors

If you aren't one of the few whales in cryptocurrency you will probably agree with me. Whales are a bad thing for coins that are just starting out. Whales will control the ICO. It is as simple as that. They will just pay more fees (gas) to get ahead of you and subsequently end up with a ton of coins. I haven't run across an ICO where this didn't happen. Whales will buy enormous amounts of coins and afterwards they can control the price as they please. Which is, of course, bad for a company. And remember - these coins are companys. You have to look at them that way. And whales just hurt your business if they can pump or dump the price of a coin as they see fit. They might put huge sell orders in to make the price drop and get even bigger on the way back up. It really is a bad thing.

2. Scamming

There are a lot of scammers in the cryptospace. Every place where huge sums of money are involved, scammers will arrive. That's unfortunately how the world works. A scam coin is nothing unusual. You will run across a great looking website, where they promise you the solution for the worlds biggest problems. But when you dig a little deeper, there is usually nothing to back up their claims. They only have a whitepaper on their website where they make the most ridiculous promises but you won't be able to find one single line of code that actually solves anything they speak about. You have to view your investment in cryptos like you are investing in a Tech start up. And would you give money to someone that hands you a piece of paper where he claims to solve x-problem, backing it up with nothing? No, you wouldn't.
But a lot of people do. And there are a lot of ICOs out there that raise enormous amounts of money for having no working product at all. This practice just makes the whole crypto space look like one big rip off, hence scaring away more people that might otherwise enter.
So always: DO YOUR RESEARCH BEFORE INVESTING!

3. Timing the ICO and real life use

It is really really hard to predict the future. Maybe your idea is brilliant, but you are ahead of your time and will fail. Happened a lot of times. So why shouldn't it also happen in cryptoland?
Let's say you have the greatest idea possible for a new coin, but there is just no need for such a thing today, or in 5 years, or in 10 years. If something like that happens you will have to quit after some time, declare the project failed and move on. 20 years later you will see exactly the same thing you tried getting started flourish. And this is where ICOs come into play.
You just shouldn't invest in something that is merely an idea. That point correlates with my scamming paragraph.
Ok let's say you found a coin with an amazing idea. You want to invest in it. But you won't be alone. Thousands of other investors (and whales) will try to get rich on the back of this idea. And suddenly the ICO will raise millions of dollars for literally nothing.
Again, it gives the whole space a bad reputation and the feeling of randomness.

And this is it. My 3 points why I am not a big fan of ICOs. I will post a short list about the positive aspects about ICOs tomorrow. So again - relax - not everything is negative about coin offerings. There are great things that can be achieved, that wouldn't be possible otherwise.
If you like to add something, please let me know in the comment section below!

Greetings,

ggorwell

P.S.: Not a native, sorry for eventual mistakes.