1. The Rise of ICOs

ICO campaigns can offer users both a decentralized alternative to Facebook and a more fair analogue of Apple music in relation to little-known artists. Startups have received a new way to raise funds for the implementation of their projects - and this is good. Tokencard attracted more than $16 million in 30 minutes, EOS raised a record $170 million in just five days.

However, from an idea to its implementation is not one step, and coming up with a product does not mean creating it. Very often, startups "burn out", facing unforeseen problems. Someone goes bankrupt after implementing their startup, and someone does not undertake implementation at all.

Due to such frequent failures, many countries have begun to tighten the screws: in China, ICOs are completely banned, and in the USA it is forbidden to receive dividends using ICOs.

But no matter how you look at it, the popularity of the model is only growing. According to Coindesk, for the second quarter of 2017, the total share of funds raised through ICO exceeds $800 million.



The graph shows that in just a couple of months, the amounts have grown more than 8 times. It would seem like a fairy tale! But everything is not as simple as it seems at first glance. In fact, there is a certain percentage of popular and successful projects. But all the rest quickly fail. And what should an investor do in this situation who wants to get the maximum benefit from his own funds?

2. Scam ICO

With ICO, it is easy to become an investor, and sometimes it is very profitable. The key word is "sometimes."

The scheme is simple: take part in a limited release of tokens, and later sell them on the exchange at several times the price. Due to the thirst for easy money, many people "blindly" participate in every new project that appears, forgetting about all the risks. As a result, the ICO market is flooded with scammers, and Declouds is just the tip of the iceberg.


2.1 Common Fraud Methods

The fraud methods are varied: from basic fake projects that disappear after successful completion to phishing tricks and hacking.

For instance, a fake Twitter account appeared during the Aragon ICO. Some users mistakenly took it for a real one and transferred funds using false payment information. The scammers collected about $10,000 this way.

There are also some really brazen guys: for example, the creators of the Razormind project allegedly created an entire operating system based on the blockchain, actively promoting themselves in the media. The matter even went as far as contacting Coinidol, who found many inconsistencies while collecting information and six months later posted a full disclosure of the ICO owner. As it turned out, even the logo was stolen from an existing Linux-based operating system.

The ICO website "Deos", whose creator stole $10 million.

Read more The Dark side of Blockchain: Scams, Hacks and Fraud.

3. How to Protect Yourself?

Initially, you need to understand that ICO is a high risk. But it would be a good idea to follow a few simple rules when choosing an ICO, so as not to run into outright scammers:

3.1 Always Look at the Design of the Project's Website

Attention to detail is very important. ICO is, first of all, a competent presentation of the product that needs to interest the investor. And if you want to close the tab in horror from the website of another project, then the probability of its success is "extremely low." See if the logo has been stolen, whether licensed or stolen illustrations are used, and so on.

3.2 Assess the Feasibility of the Project

Any project in which money is invested must be real today, and not in the distant future. The hero of the occasion must not only be innovative but also useful in the interests of a large number of modern people. Someone will use it. Do not invest in projects like SkyWay, which promise to create overground transport capable of developing up to 500 km/h. And all this joy is 7 times cheaper than a regular intercity train. Miracles!

3.3 The Project Team is Very, Very Important

Often, scammers write not about themselves but about front men who will help the founders maintain anonymity. The key to a successful ICO is experienced specialists in their field, who can be easily found on Facebook or LinkedIn. And it is best when the team is assembled from famous people who were previously involved in some cool projects.

3.4 Check the Legal Entity

If you google the legal address of the project, and you get the address of a kindergarten in the Zyablikovo area, then it is not advisable to invest your money there. Any contact phone numbers and postal numbers must be active.

3.5 ICO Tokens Must Have Their Own Currency System

ICO tokens must have their own currency system with exclusive benefits for its owner. The issued token must not only sell for more but also have a compelling justification for its further development within the project. Be sure to read the whitepaper section, which describes this point in detail.

Read more 10 Common Hacks Threatening Cryptocurrency Security 


4. Play key Tokens



The Playkey ICO campaign has the potential to revolutionize cloud gaming, in which users are able to earn tokens by being part of a special bounty program. Instead of purchasing them, contributors are able to promote the campaign on platforms like Facebook, Twitter, and Bitcointalk. For the early birds wishing to get involved early, an exclusive presale is already running, where the tokens are discounted by 25% for a minimum contribution of 60 ETH (~$17,000). This is your chance to be among the next gaming and blockchain technology phenomenon!