Which ICOs are worth backing in 2018 and how else can you profit from blockchain?

August 29, 2018
Chris Wheal

Follow the smart money and you can make strong investment returns from investing in ICOs (initial coin offerings).

ICOs are not without risk, however, and you could stand to lose all or most of your investment if you back the wrong project.

So, what are the some of the promising ICOs to look out for in 2018, and how else can you hope to profit from the blockchain revolution?

Coti

There’s plenty of hype surrounding the Coti ICO, which is due to kick off in mid-September. An ICO allows you to acquire digital tokens in the hope that they will ultimately be useful in a digital network. The utility of a token is therefore likely to be a key factor in determining the long-term price performance of a crypto post-ICO.

Coti appears to score highly on this front; as an acronym for “Currency of the Internet,” it has set out to rival the likes of Visa, Mastercard and PayPal. Just cornering a small percentage of such an enormous market could translate into significant demand for Coti’s token.

Coti Visa

Coti claims to cut out the middlemen

DAG

COTI’s payment platform aims to create payment networks through a Directed Acyclic Graph (DAG) blockchain structure.

DAG is known for its scalability, enabling apps to handle thousands of transactions per second. It is a structure used by the NXT platform, which was similarly set up to target financial services.

Selling points

COTI is aiming to offer merchants, payment service providers, developers and financial organizations with a full solution that will enable them to replace cash and credit cards, while supplanting the need for banks to be involved in transactions. The platform will include payment processing tools, wallets and currency exchange.

Along with scalability, COTI highlights other main benefits of its decentralized platform as stability and security. The overarching key selling points for users are that it should significantly speed up financial transactions, with extremely low costs versus traditional payments systems.

Having already attracted $8m in its pre-sale round of funding, COTI aims to raise a further $22m from its public crowd-sale. Along with the token potentially having a high degree of utility, other reasons to like it include COTI’s strong, broad-based team.

Uncloak

Cybersecurity player Uncloak has an ICO scheduled for the last week of September 2018. Uncloak claims to be the world’s first blockchain powered cyber threat solution, aiming to help businesses thwart hackers.

Given the increasing sophistication of attacks that companies, organizations, individuals and even governments have been subjected to over recent years, cybersecurity is currently one of the fastest growth areas of the technology industry.

Founded in early 2017 by London-based cybersecurity expert Tayo Dada, Uncloak is powered by an EOS proof-of-stake blockchain.

Tayo Dada

Tayo Dada is a cybersecurity expert

Market leader

The company claims it can become a market leader in cybersecurity threat detection because it not only engages an active community of cybersecurity experts to find undiscovered threats, but also constantly updates itself using Artificial Intelligence technology.

Through the latter, Uncloak scans the internet looking for new security vulnerabilities to add to its threat vulnerability database.

The crowd-sale aims to raise $14m with most of the funds earmarked for further refining its product and growing its global team.

Perlin

Perlin stands out as a truly innovative project, offering a platform that will enable people to rent out the computing capacity of devices such as smartphones or laptops.

Customers of the network, including other companies and startups, will pay for this computing power in PERL tokens.

According to Perlin, researchers, developers, startups and enterprises currently incur excessive costs for the power they rent from centralized cloud-computing providers.

“We are creating a decentralized, trustless, cloud-computing marketplace which delivers massive computational throughput and power with the ability to attain high transaction volume and market activity, effectively reducing the cost of computing power,” says Perlin.

The sophistication of the technology behind the project appears to be a major plus, with Perlin claiming to have scalability of 1,300 transactions per second. Perlin uses a DAB native ledger with an Avalanche consensus protocol.

Having already established offices in Singapore, Sydney, Hong Kong and New York, Perlin has set its sights high and appears to have a robust global team in place.

Perlin venture capital

Perlin is backed by various venture capital funds

“This paradigm shift in cloud computing will set the precedence for truly decentralized economies – a world where smartphones can collectively process computationally intensive algorithms in areas such as cancer research and artificial intelligence alike,” says Perlin.

Perlin has received the backing of numerous venture capital funds, having completed various private token sales. Details of its public ICO are expected to be published soon.

Blockcloud

Blockcloud is a project focused on the high-growth internet of things (IoT) segment, backed by a highly experienced team with a strong track record in the field. The parent company behind Blockcloud, based in China’s Shenzhen economic zone, already offers over 100 IoT related products, generating around $15m in annual revenue.

While team members come from top universities and companies, the project is receiving ongoing scientific support from Beijing’s Tsinghua University as well as the Hong Kong Polytechnic University.

Although already connecting billions of devices, Blockloud believes the future of IoT is challenged by factors such as poor connectivity, scalability and security shortcomings.

Its blockchain-based architecture aims to provide constant connectivity for dynamic networks. Blockcloud points to promising applications for its technology in various IoT segments including, internet of vehicles, smart healthcare, smart home, edge computing and the sharing economy.

Blockcloud IoT

Blockcloud is focused on IoT

Blockcloud claims to be the first blockchain platform supporting IoT, offering a fast and efficient consensus mechanism combined with low-load transmission. It highlights eight features of the platform that are tailored to IoT applications:

  • Mobility
  • Tamper-proof
  • Anti-theft
  • Evolution
  • Low cost
  • Real-time
  • Fair
  • High transactions per second capability.

The platform uses a DAG blockchain structure, which it claims can optimise the recording of transactions within the IoT ecosystem as devices move on and offline. Blockcloud is aiming to raise $15m from its ICO, which begins at the end of August.

Fysical

Fysical is another project that boasts innovation in a high-growth area. Over recent years, big data has become increasingly important in the decisions organizations make, especially as the overall technological capability to analyse and interpret data has become increasingly sophisticated.

Fysical focuses on the data people generate as they move through the physical world. It claims to be the world’s first decentralized and largest crypto-powered data protocol, focused on the “next generation” of big data.

Fysical location data

Fysical’s platform enables organizations to purchase location data

Decentralized market

As a decentralized data market, Fysical enables organizations to purchase location data from sellers through its platform. Examples of such data include foot traffic sensor readings, store visit information and commute routes.

Market participants trade location data through the platform using FYS tokens, with transactions processed through the Ethereum blockchain.

Fysical cites use cases for the data across a variety of applications and industries, including artificial intelligence, smart cities, real estate and financial services. On the plus side, the platform is already live and selling more than 15 billion data points per month, with more than 1,000 data suppliers and at least 20 buyers.

Fysical is looking to raise around $17m from its public ICO, which will begin imminently.

Alternatives

But what if you don’t want to invest to own digital tokens; how else can you tap into the investment opportunities of the fast-growing, global blockchain industry?

On the London stock exchange, there are some relatively small listings focused on the blockchain revolution. For instance, Online Blockchain has developed various cryptocurrency projects around the world, including PlusOne Coin, a cryptocurrency that financially rewards community activity on finance forums such as ADVFN and iHub.

The most recent financial statements show the company is barely making profits, with many of its projects in an early stage of development. The share price has also been buffeted by the wider sell-off in cryptocurrencies this year, having fallen from a high of 186.5p in January to currently trade at just below 40p.

At the other end of the scale, there’s the huge listed-behemoths such as IBM that are getting into blockchain in a big way, with IBM heavily promoting its own blockchain enterprise platform and related services.

It’s questionable though whether this push will be enough to counteract the likely long-term decline that analysts have been citing from some of its legacy businesses.

IBM blockchain

IBM has entered the blockchain arena in a big way

ICOs

Overall, ICOs still appear to be offering investors access to the best and most innovative blockchain projects. It’s important to be highly selective when investing in ICOs and do plenty of research. You can spread your investment risk by putting money in a broad selection of promising ICO tokens rather than just one or two in isolation. It could also be a good idea to place relatively small amounts in each.

While some ICOs still offer the potential to make strong returns on your money in a relatively short space of time, the speculative nature of some of these investments means you could easily lose all your capital.

That’s why it’s important to spend some time sifting through the many ICOs, evaluating the information contained in their whitepapers as well as the independent views and ratings accessible across the web.

Long-term opportunity

Various figures in the technology world have likened the current stage of development of blockchain and cryptocurrency to that of the internet in the early 1990s.

If this is valid, then many of the best, long-term investment opportunities that will materialise in the industry may do so in about five to 10 years from now.

A public coin offering by messaging app Telegram was expected to become one of the most promising ICOs of 2018, but the company has put the plans on hold amid regulatory uncertainty.

While access to the best opportunities in blockchain is still through ICOs for the time being, we may see this increasingly switch to more conventional fundraising routes such as initial public offerings (IPO) on the stock exchange, especially as the industry becomes more mature.

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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