If you read that title as in “oh shit, it’s gonna be a killer ICO!” then you read it wrong. What I meant is that this ICO is going to kill all future ICOs because it’s going to end up being the banner that regulators and governments hold up as they march to kill the ICO industry and further regulate cryptocurrency. But hell, I might be wrong. That idiotic ICO that Paris Hilton tweeted about might overtake this one.
The point is, when you’ve got a paper-thin company that doesn’t stand up to any scrutiny, backed by famous people who have no idea what’s going on and are just in it for a paycheck, you’re going to have a lot of publicity around the coming implosion.
Apparently they’ve already pre-sold a ton of tokens, which means they’ve already made their money. But why? I mean when the company doesn’t have a GitHub, is run by someone who knows nothing about cyrptocurrency, and they list 4 different PR firms on their website, you can kind of tell that it’s complete hype right? Well, apparently not for most people looking to invest in ICOs. They see the Game’s face, they see a pot logo, and they think, “holy shit, this is the most badass ICO ever. There’s no way I don’t make 20X my investment back.
I’m here to tell you that you will indeed lose money on this. You will invest. They will launch their token. There will be ZERO adoption by the cannabis industry, and the token will quickly go to zero in value. And the people who started this thing will have all made millions of dollars from poor schlubbs who believed the hype.
Why are people still throwing money at groups that don’t deserve it? Because they read an article that says BLAH BLAH BLAH and they jump at the chance of being a sheep. But take a quick second and just run through some quick investigation before you invest.
What To Look For
To help you avoid being taken advantage of, I’ve put together some pointers to help you when you’re doing your homework on ICOs.
First, you’ll want to look at the company as in depth as possible. This means going and reading their whitepaper, checking into the founding members. Go check out their LinkedIn pages. See how much history they have in the space. Check to see if their digital footprint is greater than just their website.
And if you can find enough information to make you feel comfortable, then move on to the next step.
Now you’ll want to give a taste test to their business model and the way they’ll be using their tokens and if there is any validity in what they’re doing. This step is a little more subjective than the first step because you have to use your gut instincts and deduce whether you think they have a chance of succeeding.
For instance, if someone is launching an ICO for a fleet of ice cream trucks that will use the blockchain to discover where the highest concentration of ice cream lovers reside, then they’ll sell that ice cream for their tokens. And their tokens will derive their value based on how many people want to use them to purchase ice cream. If this were the model I’d just studied, I’d take a hard pass. But hey, that’s just me.
But realistically anyone with some business sense would be able to identify this as a flawed system that is trying to create an artificial economy where none is desired.
And that’s the kind of stuff you have to look out for.
Third, you’ll want to see if they’re just a copycat of another company that’s already doing this and doing it better. Again, this is going to require you to put on your detective hat and look for similar companies and then check them against the group you’re considering. Often times you’ll find companies that have similar business plans of other blockchain companies. And that in and of itself isn’t a bad thing. But make sure the technology is sound and that they actually have a chance of improving upon the idea.
But if you also notice that the business plan or premise is a carbon copy of another group, I’d consider that a red flag since a lot of groups that are taking advantage of ICOs are just copying someone that came before them and looking to dupe investors into a similar idea.
Fourth, you’ll want to consider whether the value of the token at the time of ICO is worth it. Do you think that the token has a chance of reaching those values on the open market? Do you think they’re going to saturate the market with too many tokens? Are there really any incentives to use their tokens?
And that last question is a critical question to ask. You might find a great company with an amazing idea and an amazing technology. But they’ve just duct-taped the concept of a token onto the side of their business model and it doesn’t make much sense. In these situations, the tokens are going to have an uphill battle to gaining value and are less likely to provide a return.
So, if you can answer all of these questions to your liking, then you’ve done a significant amount of work to reducing your risk.
Now, take all of this and apply it to PARAGON and I think you’re going to find that a 3rd grader is able to discern that they’re going no where fast and they’re taking your money with them!