This maybe an unpopular viewpoint, but I hate referrals and wish Cryptos would stop using them.
I'll tell you why
1) Fake Reviews
I see a lot of reviews on websites, forums and especially Youtube that just big up a coin. They basically act as PR for the company and just copy almost verbatim from the website itself. They gloss over what the coin or token is trying to do and just play to the upside. They say how much they think the coin is going to be worth, how much money you can make from etc etc, but barely mention any downside. They sometimes even show themselves buying the coin, but it's rarely ever a significant amount. They also mention several times how to buy this coin by clicking on their referral link and they post the link all over the review. Some of the more unscrupulous ones don't even mention it is a referral link.
Now the more seasoned crypto buyers can usually smell these referral whores a mile away, but those that have just started out will often swallow the big sell and end up losing money or being scammed. Now I'm not saying that all reviewers that post their referral links in their reviews are dishonest or are just after the referrals, but I feel that companies offering referrals encourage this behaviour.
2) Produces Weak Holders
If someone is just promoting your company (via referrals) for free coins or tokens and don't really believe in the company or product then they are most likely going to sell out as soon as they can or as soon as it starts to go up. They haven't got any vested interest because the coins or tokens haven't cost them anything so they don't even have to wait for a profit before selling. They can sell pretty much as soon as they can and still make a nice profit. This surely isn't in the company's best interest as if a lot of the coins in circulation are via way of referrals it can lead to a sudden dumping of coins if all the referrers sell the coins at the same time. It could lead to the price of the coin going down and panic among the rest of the holders.
3) Referral Prizes
Not only do some companies offer free coins and tokens, some offer very lucrative prizes to the top referrers. I've seen some companies offering expensive supercars, motorcycles and even gold bars. Surely if a company is trying to raise money from an ICO this money could be better spent. It is just encouraging unscrupulous people to go to any lengths to sign up more people.
4) Spam, Spam, Spam
Finally, it produces an unbelievable amount of spam. Every forum or crypto website that allows comments is full of the stuff. I have virtually given up on Telegram now as the majority of comments on there are just spammy and are always followed by the ubiquitous referral link. The only channels I look at now are the muted ones. This is a shame as I often want to ask questions and write comments, but some of the channels have thousands of comments a day and the admins just can't answer them all as they have to sift through so much shit.
If Not Referrals, Then What?
A better way to attract buyers I think are airdrops and/or bonuses. Some coins I may have completely overlooked I've signed up to their airdrops and after researching the company have ended up buying some of their coins. Bonus signups also work where they give you say 20% extra coins if you buy a certain amount at the start of the ICO. I know they are giving you free coins, but because you have already bought some you have more of a vested interest in the company. It can also lead you to buy more coins as it is often on a sliding scale with the more you buy the higher percentage of free coins you get.
I think using airdrops and bonuses rather than referrals will also clean up the crypto market, lead to more honest reviewers and hopefully less scams. A lofty goal I know, but here's hoping.
Please let me know what you think
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Thank you so much
Personally, I hate ICOs. I feel like they're the worst possible thing for a cryptocurrency. People stop treating it like a currency and start treating it like a stock. Which, if we want to be paying 20% capital gains on every exchange, by all means keep it up. But I would rather use my crypto like a currency instead of a piece of property.
Yes, but that's only because the US government treats cryptos like property so they can get more tax from it. ICOs are only a way of raising funds for cryptos and are just like IPOs. The problem is only Bitcoin and a few of the top cryptos will ever be treated or used as currencies.
I see ICOs as the justification the US government is using to classify crypto as a currency and regulate it as such. If it were treated like a currency, we'd be having a different discussion.
Also, the US tax system needs a serious overhaul. It's WAAAAAY too complicated.
I forgot about that. Doh!!!