ICOs – Advantages vs Disadvantages

Pluses vs Minuses

Cryptocurrency ICOs are quite popular nowadays. Not only because they are accessible to the general public, but there is also a good chance to buy cheap tokens and see how they appreciate in value through the time.

That does not mean ICOs have not any risks, though, as there are always some potential drawbacks when making investments. Here you can see some advantages and disadvantages related to cryptocurrency ICOs.

Cryptocurrency ICO Disadvantages

The same name is an ICO is an initial coin offering. It means that investors are often buying coins or tokens for a project that does not even fully exist yet. In most cases, the team will have some degree of code to show what the project will look like. Although, there is no guarantee of projects ever being completed or even being embraced by mainstream users. This is a risk which people should know about, as it may take years until there is an actual market for the project in question.

Speaking of investors, the majority of ICO investors are enthusiasts, rather than people with expertise. Backers have a financial stake in the process, but an ICO is not regulated by any rules or registered. It means users will not be reimbursed if something were to go wrong. This is something a lot of people tend to overlook these days, even though it has become less of an issue ever since smart contracts were used to lock up ICO funds.

Advantages of Cryptocurrency ICOs

The fact that ICOs are open to the general public means that anyone in the ICO industry can partake if they can get funds transferred on time. It means the projects can raise funds in a completely decentralized manner, which is quite important. More investors from over the world mean there is less centralization, which is what cryptocurrency is all about.

In addition, the concept of cryptocurrency ICO means people can help shape the future of this entire ecosystem. There is a wide range of different projects raising funds through an ICO, and every single project goals to bring something new to the table. Moreover, virtually all of these projects raise a lot of money in the process of their ICO taking place. Multi-million dollar projects are very common in the world of cryptocurrency ICOs.

Maybe the biggest plus to speculators, that is how the tokens can be bought at a low price. Most exchanges will eventually enable trading of these tokens, where they can be sold for a profit if the project is successful.

From a speculative point of view, cryptocurrency systems are more than worth getting involved in. This could ultimately become the downfall of these projects as well, though, but only time will tell if that is the case.

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