As soon as someone shows an interest in investing in cryptocurrencies, they are going to be inundated with adverts as they peruse the web, they adverts will be giving those investors the opportunity of investing in something known as initial coin offerings.
What an initial coin offering is will not confuse you for it is simply a call for funds by a start-up company or in some cases even an established company that is looking to launch a product or service or even expand their currency business but require the funds to do so.
What an investor will do if they show an interest in investing, will be purchasing coins or token that have been designed and launched by those companies looking for funds, and the money raised by selling those coins or tokens is then used to expand or launch the company seeking funds.
The aim from an investors point of view is that those coins or tokens will be very low cost at the point of an initial coin offering, but it is hoped that is the business takes off, then the value of them will increase therefore enabling the investor to sell them on at a later date for a profit.
Fraudulent Initial Coin Offerings
The most obvious problem with the completely unregulated world of initial coin offerings or ICO’s as they are also known, is that it is an industry that is completely unregulated, and as such anybody can set one up.
Being a completely unregulated industry that does of course mean that there has already been and will continue to be lots of fraudsters setting them up and then simply vanishing into the night with the money raised, leaving investors stuck with a load of completely useless coins and tokens, that no one is going to want to buy.
Protecting Yourself from Dodgy ICO’s
What I would suggest that everybody does who is thinking of investing in any initial coin offering is to make a point of checking out in great detail the people behind the ones they are thinking of investing in.
Also the actual company or business that is looking for funds also needs checking out, and only at the point in time that you are 100% happy that everything about the people behind the ICO and the company that is seeking the investment funds should you ever invest in one or more of them, or you do run the very real risk of being ripped off!