Well, I should start by saying that my general opinion of ICOs is very low. Some research came out recently showing that the majority of 2017’s ICOs have already failed or stagnated. I expect even worse results from 2018’s ICOs.
To put it bluntly, a lot of incompetent people or outright fraudsters realised that they can make easy money by cashing in on the ICO craze. All they need to do is put together a website and white paper, some kind of business idea which sounds good, and the world will rush to throw money at them.
Even if the team is competent and well-intentioned, the result is they get all the money upfront – so if you already have the profit, why even work hard to develop the project any further? In other words, I think in most cases ICOs create bad incentives from the investor’s perspective.
There are some rare cases in which the ICO makes sense but given the sheer number of ICO projects, it’s really hard to separate the wheat from the chaff.
OK, so now about COTI… It’s a DAG, which inevitably means centralization. I haven’t studied their white paper but with other DAG coins I’ve looked at – Byteball and IOTA mostly – you get high speed but require a handful of nodes to maintain consensus. This is dangerous for 2 reasons: 1) you have to trust these nodes to be honest and 2) you have to trust these nodes to stay online. As we saw with IOTA recently, DDoS attacks are a big security vulnerability for point 2).
So yeah, I don’t believe in COTI’s tech as much as I do Layer 2 solutions for Bitcoin. Layer 2 has equal or greater speed without the security downsides (to the best of my current knowledge). As Bitcoin also had widespread adoption, I don’t believe COTI will come out of nowhere and become the cryptocurrency-based payment standard. If we do get such a standard, chances are it’ll be Bitcoin.
So this coin is risky and the ICO model is risky. I’m not saying don’t buy, but recognise that it’s a big gamble. If it works out, you can win big but in my estimation, there’s only a small chance it’ll work out. There are already a host of established DAG competitor coins, even if you do believe the tech is viable…
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