The Dangers and Benefits Of ICO’s

I don’t like bureaucracy. To be more specific, I don’t like paperwork. I just want to create companies and invest in them without having to fill out more than a username and password. As much as my laziness seems unrealistic, its almost that easy to start a ICO or to invest in one. An ICO is an initial coin offering. At it’s worst, it allows fraudsters to create flashy websites with promises and accept investment in the form of cryptocurrency. At it’s best, it allows lean startups to accept needed investment to scale it’s operations by sidestepping traditional regulation.

At first, the Securities and Exchange Commissionhad an “anything goes” policy with ICO’s. That’s because they didn’t know what an ICO was.

Now they have issued vague guidance. And even started charging ICOs for defrauding investors.

As much as bureaucracy-haters like me don’t want the government creating more paperwork with cryptocurrencies, I also don’t want to see a regular Joe get ripped off by a couple of fake crypto punks. Lets consider that even with regulated internet IPO’s, it can be difficult to know if a company which has never turned a profit should deserve a 22 Billion dollar valuation (SNAPCHAT).

The problem is that we have people who are dumb and lazy, but just smart enough to create an ICO or invest in one.

For example, OneCoin was a busted company which was smart enough to do marketing to get millions of dollars of investment, but not smart enough to create more than a spreadsheet for their promised “blockchain technology”.

OneCoin’s investors were smart enough to create an Ethereum Wallet, but not smart enough to do any due diligence whatsoever.

ICO’s are great because I don’t want to have to be an “accredited investor” to get involved in the “next big thing”. I also don’t want to be limited to a $50,000 minimum investment. But along with all the benefits of an ICO, are an equal amount of risks. In order to get traditional investment, startups have to go through a rigorous process to prove they have a good team and plan. Traditionally, they also should have a user-base, product, and be profitable.

All of the warnings about ICO’s sound so obvious. If you don’t understand the tech lingo, steer clear. If the team has no experience or reputation, look for one that does. There are some awesome blockchain companies out there (with big name advisers) who are disrupting profitable markets. With so many to choose from, why not choose the cream of the crop?

Governments around the world are weighing in on the ICO fever. South Korea banned ICO’s but now they’re planning to reverse that decision.

China’s ICO ban stands firm, but more Chinese invest every day.

As for the real reason China is doing that, its probably because they haven’t figured out a good way to tax it yet. China’s elite are always looking for a way to get their capital out of the jurisdiction. And The USA and other governments are looking to get their cut of the action soon too.

Until then, there are millions to be made, scammed, laundered, or invested. So I’ve taken the liberty of starting my own ICO. I completed the weebly page this morning. You can send your Ethereum directly to my wallet.

April 26, 2018

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