In a world driven by hype and FOMO [Fear Of Missing Out], it is becoming increasingly clear that a diligent crypto enthusiast must have a litmus test to select a support token in a world where it is difficult to find truly viable projects, and good projects with long-term prospects are even harder to distinguish from catching money with ‘shitcoins’.
With recent events where most new crypto wings reach record lows, and new ICO projects that don’t meet their hype after Crowdsale, it’s now common for frustrated ‘investors’ around to blame ICO promoters on social media, instead of blaming themselves for not made appropriate in-depth care to select the most likely winner after the crowdsale before purchasing the token during the ICO.
From my extensive observation, it turned out that most crypto buyers simply bought coins during the FOMO-based ICO (Fear of Disappearance) created by the masters of the hype behind those coins. Many simply bought without understanding the purpose of the coin after the ICO or what the token was supposed to do after Crowdsale. When nothing happened after the ICO, as is often the case with many ICOs, they would then jump on social media to scream a bloody murder.
Recently, my team and I just finished touring Africa and some parts of the US to promote the Nollycoin ICO. We have organized and sponsored various conferences, held live AMA (Ask Me Anything) press meetings and held a lot of individual meetings with crypto whales, small investors and crypto millionaires of all colors.
Throughout me, one thing that amazed me beyond anything else was that MOST of the token owners HAD NO FOUNDATION about the core business or project behind selling the token in which they participated.
Even stranger in my observation was the amazing fact that many could not tell you the value proposition of the project, its goals, or the company’s plan to disrupt the market and attract a portion of customers to their industry. They simply bought the ICO because several telegrams or Facebook pages they visited kept telling them ‘Buy. Hodl and buy more ‘. Most simply acted on the basis of a herd instinct, not on objective reasoning.
Now, if most of the people I met were just teenagers or people without education, I wouldn’t be so surprised at the level of ignorance of many crypto ‘investors’ I met. On the contrary, many of those I met were graduates and people of certain abilities. Yet less than 10% of them could easily articulate why they bought the coin expecting it to increase in value over time. Wherever I went, very few people in the crowd could tell me the name, experience, and ability of the corporate managers of a company that sells coins.
The only thing most of them could point out was that the coins were recommended by ‘respected’ influencing factors when the facts proved that most of them paid for the horror of creating FOMOs and reputation for otherwise useless shitcoins.
Except for the so-called fake influencers, all the many crypto buyers knew that the names of the team leaders were Russian, Chinese or Korean, even though they knew absolutely nothing about them. It was as if all you needed for a successful ICO was to list the names of people from Korea, China, or Russia that no one could verify even by simply searching Google.
While I agree that there are certainly many things to consider when deciding whether project tokens will increase in value over time, I think the acid test and the most immediate evaluation criteria should be the utility of the coin itself beyond what would happen in crypto exchanges.
While most crypto token owners I’ve met didn’t even know it, the reality is that if you bought the token from most ICOs, you didn’t actually ‘invest’ in that company. You would not buy company shares and you would not buy any guarantees from the company.
And at best, what you did when you bought tokens during most ICOs was to ‘donate’ to the project in exchange for getting a utility token or coin that legally had no real value outside the business ecosystem under the control of the publishing company.
That said, other than your hope that the price of the token will ‘sit down’ or rise to become a millionaire, you couldn’t do much else with the token other than enjoy the utility added to it by ICO, if any.
Since no one could actually predict with certainty how Crypto would perform on the crypto exchange when it finally got there, and recent experience has shown that the prices of most tokens would most likely sink their noses in the first few weeks of going public (due to big speculator sales), either it would make sense for you to look at what other value or service you could extract from your token, beyond the expected ‘wandering’ of the stock market.
As the crypto revolution has continued to spin, change and adapt to different market developments, the only way to ensure that your money is not thrown into the gutter is to make sure you can still use those chips to achieve great value and benefits even if you could immediately on the stock market sell for a profit.
In making this decision, you must ask yourself this primary question: What is the value, product, or service generated by the company selling the token that will give me enough value for my money to pay for this purchase?
In a world of crashing token prices at various exchanges, the more opportunities you have to take advantage of real life with a token beyond your expected listing, the greater your chances of not ending up frustrated or stranded with tokens that are useless to you.
So you have to ask over and over again: IF this coin had never been traded on the stock market, would I still be happy to support the vision? If this token has lost 70% of its value on the stock market, can I still use it and get value for my money elsewhere?
If you couldn’t answer these questions in the affirmative after reviewing WHITEPAPER and investing the company’s receivables, you should think twice before buying that coin.
A recent case study
Take the current ICO like Nollycoin, which is a token that drives the Blockchain-enabled movie distribution ecosystem. Coin promoters have created a variety of useful scenarios for coin buyers to ensure that, no matter what happens to Nollycoin on the cryptocurrency exchange, their supporters and tokens still laugh.
Includes some of the great useful features associated with the Nollycoin token in the Nollytainment ecosystem
• Ability to use Nollycoin tokens to watch exclusive movies in theaters and cinemas
• Ability to use Nollycoin tokens to access thousands of movies on their Netflix movie distribution on steroids.
• Ability to use Nollycoin tokens to purchase products and services at NollyMall which is like Amazon’s platform for entertainment-based products.
• Ability to use Nollycoin tokens to pay tuition fees on the NOLLY Academy platform and partner companies
As you can see, beyond the usual expectation that tokens can be found on the crypto exchange platform list, you need to look beyond the hype ico of the immediate and potential usefulness of the token and the viability of the underlying project behind it.