Picture it, if you will, a room full of wealthy, well-connected businessmen and influential personalities… drinks in hand, chatter filling the room. Then, suddenly, a voice calls out the words, “let the sacrifice begin.” Sounds like the start of a pretty good movie, but never fear… it’s not scary. In fact, it’s not nefarious at all. It’s called a “sacrifice”, and it doesn’t at all look like the scene I just described, not by a long shot. Simply put, a crypto sacrifice is something that takes place in the crypto space that can be used to tell a lot about the health of a project.
If there’s one thing to be said about enthusiasts in the crypto space, it’s that they are fiercely loyal to the technology and their chosen projects. Dare we say… to the point of sycophantism at times. But rather than making a judgement call on it, we think it’s a good thing, and think it needs to be highlighted. It’s important to understand that it has been this exact tenacity that has stood up cryptocurrencies as major contenders on the world finance stage in a staggeringly short period of time.
Cryptos have only been around for a little while, less than 15 years, to be exact. If you think about it, that’s astounding, but that’s what happens when passion is so strong that it can’t be quelched, and that’s a strength. All this to say that a sacrifice is exactly what it sounds like. It’s the willingness of members of a community to sacrifice their resources, without the expectation of a return, to further a project. And, it’s an invaluable tool that can help you understand if a project is worth sticking your hands in.
How It Works
Sacrificing can be simple, or very organized. So… maybe someone sacrifices by spreading the word without expecting kickbacks, mines for free (which is committing substantial computing resources), or sacrifices coins in some manner to further the project. If you’re eyeing crypto projects, and all else is initially considered, you can have a look across the board to see where you’re seeing an Initial Coin Offering (ICO) versus sacrifice from that project’s community.
But… why, you ask? An ICO sounds pretty good… right? Well, in traditional finance, yes. In the crypto space… not so much. And here’s why: in crypto, sacrifice demonstrates confidence in the project whereas an ICO can indicate a hollow project, brought to market quickly, underpinned by flashy marketing and high-profile names, and destined to fail once you put up your hard-earned investment money.
We’ll just go ahead and run through some basics of ICOs, and we think you’ll see why we say to look toward project sacrifices as a more exact indicator of the health, potential, and foundation of a crypto project over an ICO. Firstly, you have to know that, unlike sacrifices made by the community to build out a project, an ICO allows for large infusions of money for founders and early members to give to themselves and then they provide value. Value is provided after money is received.
Yes, that’s correct. The hard work comes after an ICO in the space, rather than before it, and this means that it is a playground for bad actors who know how to use the hype machine to pump involvement without proving, or having people believe enough in the project to sacrifice, that the project has actual substance and staying power. It’s the ultimate scam tool in the wrong hands, especially when comingled with a largely crypto novice population.
No Return Without Risk
As the saying goes… all that glitters may not be gold. That’s certainly true in the crypto space… so you must know the animal you are dealing with, and you’ll fare much better. So, while an ICO can sound impressive, some see ICOs as predatory and their founders as freeloaders… there are good people in the space who won’t work with those they see as predatory. So, maybe it’s not just beware of all that glitters, but beware of who and which projects you orbit around. It could matter in the grand scheme of things.
In crypto, unlike traditional finance, we are marrying two things that people get extremely passionate about: money and technology. Anyone worth their salt in the space will understand that this fusion creates a new kind of connoisseur that finds it in poor taste to only care about returns… because they inherently understand that the technology is laying the foundation upon which our future is built. It can be frowned upon to be of the old guard in terms of thought (only concerned with the money).
Now, please understand that we’re not saying you should shy away from projects that ICO. However, do factor ICOs and sacrifices into your decisions when approaching a crypto project… for your own safety. If a project does ICO, look at how soon after launch (check that they do actually have a project, and not just marketing and glamor) and use that, along with the other information you’ve collected about the project, to make sound decisions that feel right to you. Don’t let an ICO put stars in your eyes, folks! Stay safe and keep coming back, we’ll have more on the latest from the crypto space in our next issue.