Cryptocurrencies are the new kid on the block in the evolution of online human interaction. They present the intersection of the evolution of commerce and the evolution of the internet. The internet evolved from a communication network for academics to brochure like websites to today’s interactive platform allowing us to manipulate data and perform transactions. It has, however, achieved this by losing the decentralized nature that allowed it to initially flourish.

In spite of this centralization, content creation on the internet moved in the opposite direction, from centralized brochure-like websites, to news sites owned by large media conglomerates, finally moving into the current model where most news analysis is presented in blogs like the present one; decentralized content creation.

In the same manner as blogs and social media revolutionized content creation, cryptocurrencies have the potential to completely change the way in which value is created and transferred. ICOs are the cryptocurrency environment’s vehicle for decentralizing funding for projects - be they charities or angel and venture capital investment. As with all innovation, unscrupulous characters take advantage of the FOMO (Fear of Missing Out) and lack of knowledge and standards by stealing money through fraudulent ICOs.

This blog investigates selected ICOs, with a view to helping the readers to separate the wheat from the chaff. The analysis will cover the following:

• Utility - Analyze the reason used to create the utility, extracting the real world use for the ICO token. The real world use case is reviewed in terms of competition and potential for success as well as identifying the characteristics of those who would need it.
• The Team - The team that is responsible for the project is examined as a way to determine the potential of success of the project for which the ICO is being raise; for example, Dan Larrimer’s involvement in the development of EOS increases the chances of EOS being successful in meeting it’s goals, especially because EOS is a natural evolution for his 2 - both highly successful - previous cryptocurrency projects, Bitshares and Steemit.
• Transparency - When Satoshi Nakamoto’s seminal paper introducing Bitcoin as the world’s first decentralized cryptocurrency, transparency of the block chain was a key attribute. It is this transparency that confirms the blockchain’s validity and prevents any behaviour that is detrimental to it’s validity. Therefore a request for funding on the blockchain should be judged with the same rigour with regards to transparency. Transparency is determined by asking
  • Is the development of the project token being developed in the open?
  • Will the token be exchanged on an open blockchain [while there may be a requirement for closed blockchains, these should not need ICOs and external funding]
  • Is the whitepaper clear and concise about how it will be used without any ‘dark’ spots in the process?

The analysis is presented as a qualtitative rather than quantitative study and is not presented as financial advice. The researcher is a private individual and does not make a profit off the work. However, any donations in litecoin or ethereum would be appreciated if you found the information useful. Most importantly tell a friend or two about this analysis.