(I edited my prior comment)
First of all, marketing communication in some form is very important for the success of an altcoin:
https://youtu.be/WfULutvxvzY?t=69https://www.youtube.com/watch?v=VosfxChTxVgIn Steemit's case, the communication was not coming directly from the developers, but from the marketing that came from the adoption model where bloggers were earning $10,000 per blog. That drove the hysteria/hype bubble in combination with the clever model of locking up most of the money supply for 2 years.
So you need to look at how that altcoin is going to communicate to the market effectively. For example, Charles Hoskinson who helped to found both Bitshares and Ethereum (although he wasn't the superstar of either)
has demonstrated communication skills.
I am hoping that not every altcoin has to be only a hype bubble followed by death spiral (specifically that I want to try to create one that has a real use case that impacts billions of people), but the fact is that every new technology investment will have
the "Mount Stupid" speculation pattern. <--- click for the visual chart
@iamnotback
I see your point but even if you sometimes hit 10x gains, you can't possibly have sufficient knowledge to base your decisions on in a way that would guarantee that you gain long term. ICO price to market cap relation speculations are far from being reliable long term.
The goal is not to pick the long-term successes (there will only be maybe one of those, and if you are lucky in that you invest in best-of-breed altcoins, you might end up owning it early) because no one is that prescient and the odds are too impossible (even for myself on my own altcoin project, I couldn't guarantee to myself that mine is the one).
Rather you want to look for the attributes that will 20 - 50% of the time lead to the "Mount Stupid" 10 bagger, and that is when you sell 50% of your investment (or all, if you see think the project has less long-term potential) and ride the remainder of your position for the long-term.
If you are expert enough at accessing these rough attributes, then you will be increasing your net worth rather significantly. For example, @smooth (who is not my angel investor) had been mining many new altcoins (mining is similar to investing in ICO in that you need to spend money renting computer resources and time+effort investment) and he happened to mine nearly 2% of Steem(it). Although he will never cash out all that he mined because of the 2 year lockin (1% per week approximately can be sold), nevertheless I've seen him take out up to $50,000 per week. So we can safely assume that @smooth probably got several $100,000s out of Steem, which he probably mined at 1/100th or less cost. I presume he also mined a significant amount of XMR (although I believe I remember him saying his stake was relatively minute portion of the money supply of XMR).
The goal is always of course to buy low, sell high. So you need to buy when the market cap of the ICO is low relative to how high it can go, based on the quality of the project and the marketing communication. You are investing in the people, the technology, the marketing scheme, etc.. (what Doug Casey refers to as the three PPPs)
Unfortunately most of you readers do not have sufficient expertise and experience to astutely judge these attributes. I for example, do have enough knowledge and experience in the technological, marketing, and people aspects to make fairly accurate appraisals of these attributes and the odds. But I would say my angel investor is better than me, because I am too negative on other projects. I find technological flaws which he overlooks. I am learning to realize that the hype/marketing communication factor is as or more important than the technology factor.
ICOs are pretty much unregulated and almost always revolve around anonymous entities (not that publicly known people never scammed others) therefore there's not even a shard of insurance present.
Unregulated is good. Regulation means Wallstreet (the underwriters, etc) is taking all the gains and selling you up river.
I have to agree that anonymous developers and an anonymous company is not a good attribute, because speculation and hype is all about confidence. Also Lisk and Waves both seem to have poor communication so far (I haven't been hearing any thing, have you? although I've had my head in the sand past 1.5 months or so doing technical work)
But even if I disregard that and accept that you don't need any insurance
Insurance as a stability of income is guaranteed failure. No risk, no reward. Period. That is an inviolable mathematical fact. Sorry this is a high IQ point and I won't be able to take time to detail it right now.
The only time that insurance is valuable is for long-tail distribution risks (i.e. black swans).
, 10x gains would only worth it if every 9th ICO you invest in was a success but it's hardly the case.
It should be the case, else we lack expertise. Else our cost of acquisition needs to be 1/100th, e.g. @smooth bottom net fishing (trawling) with mining.
It's a massive sea of scams with some rare gems...
Sure, you won't throw money at every ICO but even if you disregard the most obvious scams, the ratio is still terrible.
Not for those with the necessary discernment skills. But for most of you readers, you will lose. That is the nature of speculation. The smart speculators eat the less smart ones.
And of course it's a sea of massive scams because there are people who make it profitable. Just like why some people create wallets with malwares inside - because some people doesn't practice security.
And the victims of both will definitely won't help popularizing crypto due to their terrible experience.
No one is victim, because no one forced you to play.
Life is a competition. Everyone is trying to find a way to get theirs. You can hide in your closet if you want. Or you get out there and compete. The choice is yours.
Note I don't buy shit technology, so I wouldn't buy most ICOs. But I am learning that if I were speculating, I should buy ICOs with good attributes even if the technology is bit off. For example, I knew from the start that ETH's technology was flawed. I even told Charles Hoskinson that before he launched Ethereum. But I have since learned that marketing communication is worth a $billion market cap (which is not at all the same as a $billion cashed out!).
You want a world where everything is stable and fair.
I explain in my audio recordings why that world can't exist (else nothing would exist). If you think you have created a uniform environment (e.g. "equal opportunity" bullshit), you've actually obfuscated that someone is raping you without you realizing it. I hope you take the time to learn, but it is unlikely given your ideological stance, that you would be open-minded to the natural law math and physics that I explain.
