In a world driven by advertising and FOMO [Fear Of Missing Out]every day it becomes clearer that the die-hard crypto enthusiast must have a litmus test to choose a support token in a world where truly viable projects are hard to find and good projects with long-term prospects are even harder to distinguish from the money grabbing “shitcoins”.
With recent developments where most new cryptocurrencies hit record lows and new ICO projects fail to live up to expectations after the Crowdsale, it’s now common for frustrated “investors” to go around blaming ICO promoters on social media instead of blaming themselves themselves for not doing their due diligence to select the most likely post-crowdsale winner before purchasing a token during the ICO.
From my in-depth observations, it seems that most crypto buyers simply bought coins during the ICO based on the FOMO (Fear of Missing Out) created by the hype masters behind these coins. Many just bought without understanding the purpose of the coin after the ICO or what the token was supposed to do after the Crowdsale. When nothing happened after the ICO, as often happens now with many ICOs, they jumped on social media to scream bloody murder.
Recently, me and my team just finished a tour in Africa and some parts of USA to promote Nollycoin ICO. We have organized and sponsored various conferences, held live press conferences for AMAs (Ask Me Anything) and held many one-on-one meetings with crypto whales, small investors and crypto millionaires of all stripes.
Through it all, one thing that amazed me more than anything else was that MOST token holders had NO IDEA about the underlying business or project behind the token sales they were participating in.
Even stranger in my observations was the amazing fact that many couldn’t tell you the value proposition of the project, its goals, or the company’s plan to disrupt the market and grab a portion of the buyers in their industry. They just bought the ICO because a few telegrams or Facebook pages they visited told them to “Buy”. Go buy more’. Most simply acted on herd instinct rather than objective deliberation.
Now, if most of the people I met were just teenagers or uneducated people, I wouldn’t be so surprised at the level of ignorance of many of the crypto “investors” I met. On the contrary, many of those I met were college graduates and people of some means. Yet less than 10% of them can easily articulate why they bought a coin expecting its value to increase over time. Everywhere I went, very few in the crowd could tell me the name, experience and capabilities of the corporate managers of the company selling the coins.
The only thing most of them could point to was that the coins were recommended by “respected” influencers, when the facts proved that most of them were paid to create FOMO and respect for otherwise worthless shitcoins.
Apart from the so-called fake influencers, all many crypto buyers knew was that the names of the team leaders were Russian, Chinese or Korean, even though they knew absolutely nothing about them. It’s like all you need to have a successful ICO is to list names of people from Korea, China or Russia that no one can even verify with a simple Google search.
While I agree that there are certainly many things to consider in deciding whether a project’s tokens will increase in value over time, I think the acid test and most immediate evaluation criteria should to be the utility of the coin itself outside of what will happen in crypto exchanges.
Although most crypto token owners I’ve met didn’t even know it, the reality is that if you’ve purchased a token from most ICOs, you haven’t actually “invested” in that company. You would not be buying shares in the company and you were not buying securities from the company.
And at best, what you were doing when you bought tokens during most ICOs was “donating” to a project in exchange for receiving a utility token or coin that legally had no real value outside of the business ecosystem controlled by the issuing company.
In other words, other than your hope that the price of the tokens will “moon” or rise to make you a millionaire, there is nothing else for you to do with the token other than enjoy the utility attached to it by the ICO company. If someone.
Because no one could predict for sure how crypto would perform on a crypto exchange when it finally got there, and the most recent experience showed that the prices of most tokens would most likely drop in the first few weeks of arrival on the exchange (due to heavy selling by speculators), it would make some sense to look at what other value or utility you could derive from your token, beyond the expected “mooning” on the exchange.
As the crypto revolution continues to evolve, transform and adapt to different market developments, the only way to ensure that your money is not thrown down the drain is to make sure that you can still use these tokens to get an excellent value and benefits even if you can sell it for a profit immediately on the stock exchange.
In making this decision, you need to ask yourself this fundamental question: What is the value, product or service that the company selling the token is generating that will give me enough value for my money to make this purchase worth it?
In a world of collapsing token prices on various exchanges, the more opportunities you have to get real use out of a token outside of an expected crypto exchange listing, the better the chances are that you won’t end up disappointed or stuck with tokens that are worthless to you .
So you have to ask again and again: IF this coin never got traded, would I be happy to support the vision? If this token loses 70% of its value on the exchange, can I use it and get value for my money elsewhere with it?
If you cannot answer these questions positively after reviewing the WHITEPAPER and investing the company’s claims, then you should think twice before buying this coin.
A recent case study
Take an ongoing ICO like Nollycoin, which is the token powering a Blockchain-enabled film distribution ecosystem. The coin’s promoters have created various beneficial scenarios for the coin’s buyers to ensure that no matter what happens to Nollycoin on the crypto exchange, their supporters and token hodlers will continue to smile.
Some of the major utilities related to the Nollycoin token in the Nollytainment ecosystem include
• Ability to use Nollycoin tokens to watch exclusive movies in theaters and movie houses
• Ability to use Nollycoin tokens to access 1,000 movies on their Netflix-on-steroids blockchain movie distribution.
• Ability to use Nollycoin tokens to purchase products and services on NollyMall, which is like Amazon’s platform for entertainment-based products.
• Ability to use Nollycoin tokens to pay school fees on the NOLLY Academy platform and partner companies
As you can see, beyond the normal expectation that tokens can be listed on a crypto exchange platform, you need to look beyond the ico hype, the immediate and future utility of the token, and the viability of the underlying project behind it.