Top 10 Scariest ICO investments ever

Last edit: November 2018.

Some might still think that investing in crypto is a piece of cake going on and on about “what if I bought Bitcoin back in 2011?”

But to be fair you would have still had a chance to mess things up purchasing a slice of pizza with all those bitcoins a year later. Because even if investing in Bitcoin seems like a no-brainer to some, thousands of people went broke burning their savings on crypto market’s most stable assets, buying them at their all-time highest back in December 2017.

That being said, today’s topic will cover crypto opportunities that are even more frightening. It’s Halloween after all, so we’ve prepared an exceptional list of 10 most blood-chilling initial coin offering investments ever to have been available to the general public. One important thing before we jump into the list: let us quickly explain the reasoning behind the selection process.

So, the database and calculations used are taken from the Coinist ICO return on investments tool. We had to use only one source for the consistency of the rating, even if some numbers were off (which is true for any research/database on the market at the moment). The list includes only projects that were substantially hyped during the token sale and raised a significant amount of money (that metric was taken from theICObench database, except for #9 on the list, in which case Icodrops data were used).

All the numbers in the following list are valid at the moment of writing this article, it being the 28th of October, 2018.

According to the Coinist (one of our data sources) stats, the average return on investments of all the analysed crowd sales in the website’s directory is 3,770.78% and the average ROI of the top 100 ICOs in our directory is 11,424.14%. So, close your eyes and imagine that you have $11,000 to put into the most exciting and talked about ICOs. Sounds like fun, yeah?

Let’s see how much you would have profited if you were to make each of these

10 Scariest ICO investments ever:

#1 Scary ICO investment: BitDegree

$22.5 m worth of tokens were sold during ICOICO price: $0.08  /  Current Price: $0.0075245464ROI since ICO: -90.59%Currently $1,000 ICO investment turned into $94.1

BitDegree is claimed to be the world’s first blockchain-powered smart-incentives based online education platform that would revolutionize global education and tech recruiting. The main benefit incentive providers get from the BitDegree platform is the ability to initiate and maintain a dialogue with upcoming talents and reward them for achievements through smart-incentives.  BitDegree smart-incentives are ought to be location and topic targeted ranging from small to large. From a student’s perspective, it means getting paid to learn new skills based on local demand, which does not only incentivize a potential user but also offers a viable way to avoid unskilled work.

During the ICO, these words sounded like a music to retail investors’ ears. The sale was also heavilty promoted by one of the well-known in the industry Udemy’s cryptocurrency tutors – blockchain influencer Suppoman, who created an enormous hype around the project at some point.

But the project has never pleasantly surprised its supporters. And even though BitDegree’s Twitter is being regularly updated, those tweets don’t seem to be of major importance: just some small exchanges listings andboasting with product’s updates. The actual platform is already available to the general public. And although it might impress someone, I personally bear a deep share of scepticism towards the current state of the platform.  First of all, almost a 100% of the content are copied courses fromUdemy.  Second, from a users experience standpoint, basic things like the search field and filters don’t function properly. And most importantly, the tricks they use to lure people in are deceiving. At the moment of writing Bitdegree is running their “promotion”. Big banner on top of the page says I was granted free access to the top platform’s courses. However, when I try to enrol to any of those a window pops up (see the screen below) blocking my access to “free” education.

Not sure If those tricks are very blockchain-y in their nature. But maybe that’s what it takes to rank2893 website in India.

#2 Scary ICO investment: DragonChain

$13.7 m worth of tokens were sold during ICOICO price: $2.9 / Current Price: $0.22ROI since ICO: -92.40%Currently $1,000 ICO investment turned into $73.6

Dragonchain goal was to build a commercial platform for application developers to deploy Blockchain applications quickly and securely while keeping the existing language development environments (e.g. Java, Python, Node, C#, Go);  big costs and speed to market advantage​. Besides, Dragonchain architecture intended to allow nodes to manage transactions approvals based on five levels of network consensus to give data consumers a spectrum of trust; a never before seen by current blockchain solution providers level of protection and flexibility on the market. These design attributes​ ​position​ ​Dragonchain​ ​for​ ​exponential​ ​growth​. Another cool thing about the project is that it was originally authored by Disney Company, but then later became a public venture.

It’s seems like it was just a rough year for the company since the development is in place and the project’s roadmap is being consistently updated, making it clear that these guys are up to something. Recent updates are available here and among exciting things – developers are very welcomed to enrol at Dragonchain academy after the 30th of November. Some content and lectures are available here.

So, maybe this one will become less scary over time.

#2 Scary ICO investment: Datawallet

$40 m worth of tokens were sold during ICOICO price: $0.18 / Current Price: $0.0089535376ROI since ICO: -95.03%Currently $1,000 ICO investment turned into $49.7

Datawallet is a blockchain-based data-exchange that allows users to reclaim and profit from the data they create online empowering developers to bring the next generation of applications to life. It allows them to leverage a completely new data universe and build the most advanced applications ever. Imagine providing companies with insights that will boost their operations on a scale never before seen. Even Tim Draper thinks it’s awesome.

However, taking a deeper look at the overall picture is still looks murky. Of course, one would expect some product’s development updates onTwitter but there are what you get are announcements on yet another conference someone from the team is about to rock at.

And then there’s this disastrous tweet as well:

We have just taken the#Datawallet Alpha App from both the@AppStore and@GooglePlay as it was meant for testing purposes and does not reflect the current build of the Datawallet Platform. Sign up onhttps://t.co/x8TXOjgE8D to receive updates about the beta release.#TakeControl

— Datawallet (@Datawallet)October 8, 2018

With no sign of beta on the horizon.Spooky.

#3 Scary ICO investment: Paragon

$50 m worth of tokens were sold during ICOICO price: $1 / Current Price: $0.0489551168ROI since ICO: -95.1%Currently $1,000 ICO investment turned into $49

Former Miss Iowa, Jessica VerSteeg, decided to get into cannabis industry after losing her boyfriend, Tyler Sash, to his opioid addiction leading him todie from overdose.

Mixing an awkward business idea (hence the circumstances) with her enthusiasm for cryptocurrencies VerSteeg started her own blockchain called the ParagonChain. The core ofParagons solutions aimed to “revolutionize the supply chain tracking for the cannabis industry.”

However, it has been hard to actually recognize what was created from the tech perspective of things. Up until recently. In June of this year, there were public announcements made supporting ParagonCoins in a class-action multi-million dollar trial against The Game. Those investors proceeding in court are also up for putting down the ParagonChain forever.

It is accused of utilizing ICO funds not to improve the cannabis industry, but rather to buy real estate. According to the recent revelation from VerSteeg, the allegations are true.

Now she is up for starting a cannabis friendly co-work on WeWork. Given that the current WeWork evaluation isat $35 billion USD this might seem like a good plan in theory, however, in 2017 WeWork was at $933 million USD of net losses vs $886 million USD in revenue, so VerSteeg’s company might have to show the market some magic ninja moves to hope for anything good, really.  And even if it does, it’s still not at all what project’s investors would have expected.

#4 Scary ICO investment: LociCoin

$9 m worth of tokens were sold during ICOICO price: $0.75 / Current Price: $0.0326632653ROI since ICO: -95.64%Currently $1,000 ICO investment turned into $43.6

Loci’s InnVenn platform was supposed to revolutionize the patent search and the discovery process while seriously cutting down on the prohibitive costs for inventors making intellectual property attorneys, researchers,  and developers duties easier.

And the search is just the beginning. Loci’s proprietary machine learning method takes it to the next level. Their technology examines the research trends, outlines what is already known and finds whatever is yet to be discovered sourcing for new ways to link inventions or to identify unexpected opportunities to invent new products. The gap between undiscovered connections and the current technology is what Loci calls “whitespace.”

Although at the moment this opportunity resembles a horror movie for any cold-blooded let alone nervous investor, we have to mention that the patent search works beautifully and the team constantly brings more awesomeness to the process, like their recent idea to work with engineering students from George Mason University’s Master’s program in Data Analytics Engineering to conduct research at the forefront of machine learning and predictive analytics.Fingers crossed it will turn around 

#5 Scary ICO investment: BeeToken

$15 m worth of tokens were sold during ICOICO price: $0.2 / Current Price: $0.008185324ROI since ICO: -95.91%Currently $1,000 ICO investment turned into $40.9

Bee Token is a cryptocurrency that fuels the Bee Protocols, a set of Ethereum smart contracts and Beenesthome sharing platform for hosts to list their homes and for guests to find accommodation. Beenest rewards users with network incentives, commission-free transactions, and security unrivalled in the home sharing industry.

Although it all sounds amazing (and well, anytime someone says “oh, it’s an Uber of blockchain” or “hey, it’s a decentralized Airbnb”, many investors tend to lose it), in fact, nothing much has been happening there since the ICO.

Company’s Twitter feed is filled with parties and meeting announcements.

And well, looking at a product, it’s a complete shamble. We ran a quick search for accommodations in New York city using Beenest and Airbnb. Apart from the unrelatedly small number of options available the pricing was way too off. Who needs a “decentralized platform that eliminates the middleman with 0% commission if the price for the apartments listed on Airbnb is 3-4 times lower?

#6 Scary ICO investment: HOQU

$15 m worth of tokens were sold during ICOICO price: $0.22 / Current Price: $0.0080901107ROI since ICO: -96.32%Currently $1,000 ICO investment turned into $36.8

HOQU’s  team was about to build a decentralized platform for affiliate marketing that was supposed to bring merchants and affiliates together bypassing brokers and use smart contracts to ensure fair and transparent deals but then the team decided that public fighting over money gathered during the token sale is much more fun. The story didn’t spread further than Russian media outlets (however, Future Times is very eager to change it in the nearest future), but some details are available in this Bitcointalk thread.

And even though the project’s team claims that the beta version is out:

HOQU launches the beta-version of Merchant app
Steps to enter the Merchant app:
Go to thehttps://t.co/cU7uRimM79;
Select a “Merchant” role;
Choose “Private key”;
Use the private key provided below: 6EE9256B840C503716886853C61F91595DFC41A5B7B2B142307BEC307C0D1924 .pic.twitter.com/U3BMtAKVTb

— HOQU (@HOQU_IO) October 8, 2018

God only knows who is using it, since there were no real business development activities held. And there are only a couple of affiliate conferences scheduled for 2019.

#7 Scary ICO investment: Bitclave

$25.5 m worth of tokens were sold during ICOICO price: $0.1 / Current Price: $0.0028818305ROI since ICO: -97.12%Currently $1,000 ICO investment turned into $28.8

When it comes to online advertising, businesses are obliged to pay huge amounts of money to middlemen in order to reach the right audience.BitClave envisions a world where smart contracts have replaced the need for middlemen, changing the way communities use the Internet. Instead of paying said middlemen, companies automatically create personalized offers for consumers. In this ecosystem, consumers can control their own data and sign up for advertising and analytics services done by retailers using smart contracts therefore owning even more money viewing these promotions.

That’s how exciting BitClave was at the very beginning. However, currently, the team is acting quite calm. Twitter updates are regular but have nothing to do with the development process or anything of that sense. Although this one clearly suggests visiting Twitter for development status:

To get our latest development status, please visit 
–https://t.co/W9QmR73Oya 
-Facebook (https://t.co/5UOyGWvbb0)
-Twitter (https://t.co/Szvskpwmup)
-Telegram BitClave News Channel (https://t.co/rt8PEGIcCn), BitClave Ecosystem (https://t.co/XkJqGCJdzT)

— BitClave (@BitClave) October 1, 2018

We wonder if anyone on the team is still alive. Although, based on the fact that the project’s representatives are taking part in Job Fairs, chances are there aren’t many survivors left .

#8 Scary ICO investment: ShipChain

$30 m worth of tokens were sold during ICOICO price: $0.34 / Current Price: $0.0084373241ROI since ICO: -97.52%Currently $1,000 ICO investment turned into $24.8

Blockchain technology is usually characterized as “disruptive” because it can transform the way we communicate as a society. Distributed ledgers are revolutionary for old business models just like email was for traditional mail. If used correctly, blockchain will promote digitization of record keeping processes associated with assets trade even in cases when mediators and brokers are incentivized to oppose revolution. It can enhance transportation of commodities in all countries, across the globe, even beyond. The ShipChain team launched the project in hopes of making that leap possible.

Unfortunately, said leap hasn’t been very successful. The recent (dated September the 7th) blog update on the development side mostly talks about milestones that were supposed to be accomplished in Q2 2018 according to the project’s initial roadmap that is still published on theirwebsite, even though it has been moved somewhere to 2019 with a note saying “technology is still developing and nothing is final until it is final (especially any planned features or “release dates”).”

And it’s not surprising. Especially if Shipchain’s Twitter-responsible part of the team has only enough time to attend events and compose generic blog posts vaguely related to what’s supposed to be built.

#9 Scary ICO investment: Invacio

$1.9 m worth of tokens were sold during ICOICO price: $1 / Current Price: $0.0186624871ROI since ICO: -98.13%Currently $1,000 ICO investment turned into $18.7

Invacio  described themselves as a ground-breaking achievement in Distributed AI that resolves some of the world’s most complex and stubborn problems. Project scalable intelligent environments enable our AI to turn noise into data and data into information with unprecedented speed and ingenuity. Led by William James Dalrymple West in collaboration with experts from NASA and FB-HHVM, Invacio has created an AI with a large appetite for knowledge.

Invacio’s AI constantly evolves as it investigates and develops its cache of streaming and historical data. Always adjusting to any circumstantial variations or demands our AI spontaneously improves its models through experience, becoming evermore complicated and subtle, and even more secure.

It’s not clear how much smarter that AI is getting after ICO but we learned that company’s CEO, William James Dalrymple West, has some kick-ass complaining and moaning skills. In his recent open letter to project’s community, William James shared lots of unresolved issues and how he is handling death threats from unhappy investors.

That doesn’t scream: “Success” to us .

#10 Scary ICO investment: Dorado

$21 m worth of tokens were sold during ICOICO price: $0.1 / Current Price: $0009564157ROI since ICO: -99.04%Currently $1,000 ICO investment turned into $9.6

Robots. Drones. Artificial Intelligence. Millions of Orders. Next-generation leading an on-demand delivery company with Quarterly Payout Bonuses. Dorado will change the way goods move around cities allowing anyone to have whatever they please delivered on-demand. Their revolutionary HyperLocal Logistics blockchain platform unites customers and local couriers who can deliver anything from any place in a blink of an eye. Wow, those are some promises. I can even go further and admit that this scary ICO is a bit personal, because it was one of the rare token sales I’ve participated in.

Given that Walmart has recently filed a patent for a blockchain-based drones delivery system it wasn’t that silly to hope for Dorados bright future.

However, a quick look at a corporate Twitter makes me shed a tear.

The last update (dated August) has been about an absolutely ridiculous case. Back in June 2018, the companyacquired Wooopit, a polish food delivery service. Then in August their CEO published a letter explaining the setbacks in development caused by some legal issues (including the purchase of Wooopit).

Later on in September, another post (the last one to date) went up on theblog saying that Wooopit stopped it’s activity. So the team claimed they were not  involved in the activities or management of Wooopit saying “The only link that has ever existed between us was our intention to acquire or license some of their IT software upon which the platform was built.” Which is very confusing, because judging by the previous post it was a done deal. No further updates followed. Isn’t that the scariest?

We hope you enjoyed this list. For someone who might want to know how to effortlessly turn a $11,000 investment into $469.9 it’s a true gem. You keep your eyes wide opened for even scarier investment opportunities in the future and we promise to do our best in keeping you informed in advance. Stay with us.

UPD. This article was updated on the 23rd of November as our main stat source, Coinist, corrected the false data on Dragonchain. 

ICO Crowd funding vs IPO

An Initial Coin Offering (ICO) is utilized by many startups and businesses around the world to sidestep the controlled and thorough capital-raisingprocedures required by banks and investors.

An Initial Coin Offering or ICO is an excellent way to raise funds for a new blockchain project and cryptocurrency venture. The cryptocurrency coins are similar to shares of a company sold to investors in initial public offering (IPO) transactions. The money is returned to the early investors if the ICO is not able to meet the minimum funding requirement. In such cases, the ICO is deemed to be unsuccessful. If the funds requirements are met within the promised time frame, the raised money is used to either initialize the new scheme or to complete it.

Raising money through an ICO is different to raising money through venture capitalists or other means. Without giving up equity and becoming a public company from day one, startups and small businesses will be able to raise funds and sell their blockchain technology platform. ICO Ratings is also crucial as investors will get an overview and will be able to know about the best ICOs to invest.

It means that everything that startups and small ventures do will reflect on the price of their cryptocurrency tokens. The team discussions of the startups and small business ventures are likely to push publicly, and their team might have queries multiple times a day about the price of their token.

Some key characteristics of an ICO include:

The prices of an ICO are usually set by the creators of the economy, decentralized autonomous organization (DAO), or project.The crowd sale may have multiple rounds of fundraising with token or coin offerings.Early investors are likely to have greater rewards embedded within their tokens as an incentive.The value of the offered cryptocurrency tokens will increase in value until the release date.It will conclude once the coins or cryptocurrency tokens are tradable in the open market.In most ICOs, the creation of coins or tokens is defined prior to sale.After the final token sale, all the unsold tokens are burned (in the majority of ICOs).The investors don’t have the right to vote on the direction of a project or DA when they have the tokens sold during the ICO.Early investors have the right to give input throughout the lifespan of the project.The ICO generally sells participation in an economy of the project.The ICO tokens will sell a right of ownership or royalties to a project or DAO.The ICO will tend to be open from between a few days to a month or two. Sometimes several months.It is essential to understand that some ICOs have been open for longer and fundraising for a particular ICO may possibly take place on multiple occasions.

Similarities and differences between ICOs and IPOs

ICOs may only give the investors rights of a particular project but not the company launching the project whereas an IPO gives the investor the ownership of the startups based on the number of shares acquired.With the CEO and the board involved in the day-to-day running of the business, the decision making in the IPO companies are centralized. The decision making is decentralized in some ICO projects, which gives the investors a material decision-making position.An IPO is a onetime sale with multiple intermediaries involved to determine the conditions, and pricing of the shares. ICOs have multiple rounds of fundraising.It is essential to understand that the stock exchanges and the companies listed by IPOs are heavily regulated. The cryptocurrency exchanges on which ICOs (likeLendo, ABYSS, BunnyToken) are launched are not regulated in the majority of the jurisdiction around the world.

Different phases of ICO

An ICO means that startups or small business ventures offer investors units of a new cryptocurrency tokens in exchange for funds in the form of fiat currency or cryptocurrency currency. The ICO has been in use since 2013 to raise the necessary funds for the development and marketing of a blockchain-based or cryptocurrency project by releasing tokens which is somehow integrated into the project. Similarly, Influencer marketing is also a powerful way to market for your ICO, where well-known brand campaigns reach engaged audiences.

The process of raising money through an ICO by small business enterprises often starts with the creation of a detailed white paper. A white paper is a document that will contain and state the complete project details such as the money required to undertake the venture, what needs the project will fulfill, what type of currency will be accepted, how long the campaign will run, and the distribution of the funds once raised.

We will explore the different phases associated of the ICO in order to understand ICO funds better.

Phase 1: Analyzing

It is essential for startups or small business ventures to analyze the requirement of blockchain technology or cryptocurrency tokens for their business or project. Moreover, businesses need to understand that the development of a decentralized application is much more expensive than for centralized applications. When compared to AWS/azure, the cost of the computing associated with decentralized applications is often on the high side.

Analyzing is part of the ICO launch with brainstorming on a viableeconomic model. In addition, it is carried out by professionals to find the needs of the token for the business and defining the utility or function of the cryptocurrency coin or token.

Phase 2: Planning

The most essential components of the planning are deciding on precaution against the hackers, token design, the token offering, and conducting a communication strategy.

Businesses will need to start defining the amount of funds that they want to raise and the results they are expecting with the distribution method. The business requirement is one of the key focuses of the planning phase of the ICO.

The motivations behind creating the ICO such as raising the most amount of money possible and creating broad base of supporters are the key focuses of the planning phase of the ICO. Businesses or start-ups need to keep a clear picture of processes that they need to follow while launching an ICO. These key aspects involved in the ICO process include deciding the investors and partners and the money they want to raise.

In addition, it also involves the decision about the soft and hard capital. The planning of an ICO also includes working on some essentials such as the type of cryptocurrencies that they are going to accept, the token-releasing process after the presales, the verification process structure, and defining the process for institutional/funds investors.

Startups and businesses should also pay intention to synthesized documents containing all the key elements, which is called the white paper. This should contain all of the inner workings of the application, the use of the token within the system, token allocation information, and the technical information about your project.

Phase 3: Launching

The launching phase of the ICO is all about bringing the planning of the ICO project to execution. It is also about using all viable channels for communicating about the project. It is essential to keep your team ready to respond to all the queries raised by the public. It is also a good time for companies to hire a reputable law firm who have experience with running an ICO process and blockchain companies.

How does ICO funding work and how to use an ICO?

By establishing the blockchain and setting up the protocols and rules, businesses can kick start the ICO processes. The next step is to begin mining for cryptocurrency coins that will be sold during the ICO for the creator with social media sites. Creators will not only increase the required funding but also push demand and price post-ICO.

A step-by-step guide of an ICO can be summarized as follows:

Pre-announcement:

This is the marketing stage of a future project through sites frequented by cryptocurrency investors. During the pre-announcement, the creators of the ICO project will prepare a white paper, which is essentially a presentation for the investor that will outline the details of the project.

The company will get a sense of whether there is investor interest in the project proposed once the white paper has been circulated. The company will get address concerns and risks raised by potential investors. It will help creators to reach a final business model and final version of the white paper. It also helps investor to knowhow to invest in ICOs.

ICO offering:

It will set out the terms of a contract for the benefit of the investors. In addition, they will make it on behalf of the company entering into the ICO. The initial coin offering will determine the total amount of capital required and outline the project details together with project timelines.

The financial instrument to be sold will be indicated during the offering of the ICO, normally a cryptocurrency token. Together with the rights of the investor, the financial instruments will have a value assigned to them. The ICO start date is announced once the offer has been signed.  For most of the token, the ICO countdown has already begun.

ICO marketing campaign:

The marketing campaign is a pivotal component of the ICO. The campaign will be important for startups to raise the necessary capital. The selling of the cryptocurrency tokens begins once the marketing ICO campaign starts. comes The companies will also ensure that their token will be listed to cryptocurrency exchanges for investors to exchange and trade.

Legality of the ICO

It is essential to understand that the legal state of ICOs is mostly undefined in the majority of the countries around the world. Ideally, the cryptocurrency token during the ICO is not sold as a financial asset but as digital goods, like many other commodities. The token sale is often called a “crowd sale” by experts. The funding raised by an ICO is not regulated in the majority of jurisdictions which makes the planning and execution of an ICO easy and paperless if a legal expert who is experienced with the issue of blockchain technology, cryptocurrency, and ICOs is on board.

Similar to the sale of securities and shares, some jurisdictions seem to be aware of ICOs and usually tend to regulate them. It could bear some financial, as well as legal, risks for investors to invest in ICOs in jurisdictions that systematically regulate them. In addition, the effort and the cost to comply with regulations could reduce the benefits of ICO in comparison with the traditional means of funding.

Benefits for companies launching ICOs

It is essential to understand that the economy, project, and DAO are not necessarily subject to taxation, whereas the funds raised through the IPO are subjected to taxation.

During the ICO, the sale of tokens or cryptocurrency coins are direct, which may include multiple funding rounds. Moreover, there will be very few (if any) intermediaries required for the raising of funds during the ICO and sales of tokens/coins to early investors. Investors base investment decisions on the content of the technical document (white paper), which is prepared by the fundraising entity. For more information and services you can visit our website.