Hi @steveoconner. This is friend;y advice. As the white paper specifically says that this is not an investment, I would refrain from using that word in your post.
It would be helpful guidance to those who don't know much about ICOs to add some risk warnings similar to those in the white paper. Have a look at the article I wrote this week about ICOs. You may find some ideas.
Good luck with your posting.
Fair enough Clive, I am paying money for something I hope will be more valuable in the future - if you don’t call that investment, then tell me a better word. For example if you bought $100 NXT in 2013 that’s worth $350k now. I do appreciate your concern though, just curious what you might call it?
If a packet says "This is not food, do not consume", then you shouldn't tell others it is delicious food. It's misleading. Whether you choose to eat it yourself would be your choice as nobody misled you.
Whilst these tokens have a potential utility value - as spelled out in the white paper, I personally find that use to be quite limited.
There could be future downwards pressure on the price. Please have a look at the bottom of page 89 of the white paper. It looks to me like their plan is for the main source of revenue for the next four years to be selling more tokens, plus an acquisition they hope to make. Selling more tokens would be new supply. Personally I am not very keen on new supply coming into the market as it can depress the price - if there is one.
The thing affecting ICOs at the moment is speculation. Many people are investing in tokens blindly, a bit like lottery tickets. You might get lucky. Maybe so many people wanted to buy in the ICO, that they could not get all they wanted. Then they may try to buy more at a higher price. Maybe...
In this case, another thing that I don't like, is that as soon as they reached the cap they invoked the stretch, i.e. selling more coins, than the original plan.
What would I call it, instead of investing? - "fun". You could try to put together a collection of 50 euros worth of every ICO ever issued and keep or sell the collection.
NXT was, according to the white paper, designed to be 100% a cryptocurrency, and with a wide range of functions. That's why it has done so well.
This ICO, has much more limited use.
Thanks for answer - am new to this and tbh am just figuring it out - like you said am having fun, investing small amounts in icos I like
@swissclive out of interest, so domraider put out 1,000,000,000 tokens and roughly 10c each. Effectively print $100 million and then sell it to people. For the price to go up, there needs to be a demand in excess of $100 million for DRT's right?
It's not quite as simple as that. Firstly you need a place where you can buy and sell them. Secondly there needs to be volume and this means buyers willing to buy. There will be no shortage of people willing to sell. These buyers have other tokens they could buy instead. So those buyers would need a good reason to choose this token.
check this: https://medium.com/blockchain-media/how-to-evaluate-an-initial-cryptocurrency-offering-ico-1bc238cff0ae
That's a good article written from the perspective of the ICO issuing company. It's not covering the questions an individual should ask before contributing money to the company P&L by buying tokens. "
There was one question which is pertinent to both sides: "Is the utility of the token essential to the company to do business, and is the token essential for the customers or others when dealing with the company, or with other companies? In other words, is token needed at all, or could an alternative crypto currency work just as well?
A good text-book case would be if Tesla brought a new flash car called the "Tesla ICO" with a rule that it can only be bought with newly issued tokens. Since demand for most Tesla cars exceeds supply (long waiting list), the tokens would have a ready market from those who want to own that particlular model.