How risky are ICOs?

What's an ICO?

Initial Coin Offerings (or ICO's for short) have been recently getting more attention. An ICO is effectively a crowdfunding mechanism for digital currency projects. Most people know of Bitcoin as a digital currency, however, more than 900 digital/crypto currencies are available over the internet as of June 25, 2017, and growing. In certain cases, the teams behind these digital currencies seek funding to develop their project. To do this, they request crypto currencies from the general public, and promise to issue participants a proportional number of their newly produced "coins”.

Is it legal?

The response to this is confounded, however ICO's do have a considerable measure of likenesses to securities. Overall, this is an exceptionally unregulated market, with no real barrier to entry. In this manner, there is genuine risk of scams and fraud. It is very risky to put any capital in these sorts of offerings.

How have ICO's performed?

Scams and regulations aside, 2016 has seen a significant increase in the number and frequency of ICO's. Yet again, ICO's are an exceptionally risky prospect for members, and the profits demonstrate this hazard. Roughly 21% effectively failed completely, with participants losing most if not all their money. That being said, for somebody who takes an interest in all ICOs, their portfolio would have seen some wild triumphs.

How do I participate?

You should likely reconsider before taking an interest in an ICO. Do some research. Most industry experts have brought up that the vast majority of these ICO's will end in tears. On the off chance that you are as yet intrigued, the initial step is to get yourself some Bitcoins, as that is generally the only accepted form of payment for participation.

**The purpose of this post is not to slander nor discourage people from participating any ICOs but to educate. People are entitled to their own opinion and no one else can dictate your decisions.