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Should You Invest in Bitcoin or ICOs?

admin,May 31, 2018

Bitcoin and ICO have their own characteristics, risks and advantages.

So which one should you invest in?…

 

Bitcoin

Bitcoin was the first open source digital currency created in 2009.  Both open source software algorithm and globat internet network create Bitcoin and record every transaction. To know more about how Bitcoin is created, please see our previous article: Cryptocurrency Mining.

If you invested in Bitcoin before December 2017 or even a few years before, you would have received a high ROI percentage with low risk. But after January 2018, the risk in Bitcoin has become bigger than the reward. Bitcoin price is now very volatile and quite expensive (potential investors with limited capital are finding it very hard to buy a Bitcoin), and it’s future as an investment still remains unsure.

Also, Bitcoin seems increasingly useless, as transaction fees are getting more expensive and Bitcoin transfers are taking longer.

However, many people believe Bitcoin will continue being the spine of digital currency, and despite its high price, Bitcoin is still a favorite for most people as seen in the market cap of Bitcoin which is around $122 billion, the highest compared to other coins. Furthermore, Bitcoin can also be used to buy goods or services worldwide with a merchant who accepts Bitcoin as payment.

 

ICO (Initial Coin Offering)

ICO concept is almost similar with IPO, a new blockchain project shares the tokens to gather funds. ICO is also a good place to look for the seeds of Bitcoin-like, a new product with a high prospect in the future at a cheap price.

However, to pick one of the coins in ICO, we need to learn first about the product itself, their management or service, and analyze whether people will like or need the products because not every ICO project is successful after it launches. According to Vitalik Buterin, the estimation of the token startup in ICO concludes at least 90 percent are going to fail, and we also need to be cautious of the scam projects.

Unlike Bitcoin, there are 3 token types in ICO, Equity token, Securities Tokens, and Utility Token. Every token has a different functionality, value, and rights, however all of them are tradeable.

  • Equity tokens are a subcategory of security tokens that represent ownership of an asset, such as debt or company stock.
  • A security is a broad classification that refers to any kind of tradeable asset.
  • Utility tokens are a future access to a product or service.

Most investors take Equity tokens or Securities Tokens as their investment, and this investment in ICO will be blockchain-based stock trading.

 

Both Bitcoin and ICO have their own risk and advantages.
Choose the one that fits you the best; your competence, capital, condition, and psychology, and  be sure to consider the risk-reward ratio as well. And remember, it is always best to invest with your head, and not over it!