If you're willing to find the biggest trend in cryptocurrency today, a look at Initial Coin Offering (ICO) could be a good beginning. The thought of presale coins of a cryptocurrency or token of a blockchain project has developed into a crazy successful tool to increase funds for the evolution of a new program. Our guide provides a summary of Initial Coin Offering- ICO and gifts the history, present, and future ICOs.
What is An Initial Coin Offering?
ICO is the abbreviation of Initial Coin Offering. It means that someone offers investors some amount of a new cryptocurrency or crypto-token in exchange against cryptocurrencies like Bitcoin or Ethereum. Since 2013 ICOs are often used to fund the development of new cryptocurrencies. The pre-created token can be easily be sold and traded on all cryptocurrency exchanges if there is demand for them.
With the success of Ethereum, ICO is more and more used to fund the development of a crypto project by releasing token which is somehow integrated into the project. With this turn, ICO has become a tool that could revolutionize not just currency but the whole financial system. ICO token could become the securities and shares of tomorrow.
Ethereum – The Initial Coin Offering?- ICO Crowdfunding Machine
The most prominent demonstration of the potential of Ethereum’s smart contracts has been The DAO. The distributed investment company was fuelled with Ether worth $100m. The investors received in exchange against Ether Dao Token which had their own market price and enabled the holder to participate in the governance of the DAO. After it was hacked, the DAO however failed.
The concept of funding projects with a token on Ethereum became the blueprint for a new and highly successful generation of crowdfunding projects. If you already tried out, you know that investing in token on top of Ethereum is charmingly simple: You transfer ETH, paste the contract in your wallet – and, tata: The token appear in your account and you are free to transfer them as you have.
Examples of successful Initial coin offering on Ethereum are:
- Singular DTV
- First Blood
- Digix DAO.
There are numbers of ICO launched each month that create new and interactive ways to join the program with the token and also to leverage smart contracts to add more features to these programs.
The possibility of the tendency is immense. ICO enables every person and every company to readily release publicly tradable tokens to increase funds. It might be used to totally rebuild the fiscal system of stocks, securities and so on. It decentralized not only cash but stock creation and trade.
The Future Of Disruptive Capital Raising
As mentioned before, ICOs have been able to raise more than $2 billion in 2017 independently, which has Convinced numerous financial experts, in addition to venture capitalists and so on, of the potential of this tool. Venture capitalist Fred Wilson has ever been among the most reputed fans of ICOs, calling them “a new and exciting means to construct (and fund) a technology company, and also a valid disruptive threat into the venture capital business”. Another significant contemporary was billionaire investor Tim Draper, of Draper Fisher Jurvetson, who engaged in an ICO before in 2017 for its electronic money Tezos.
Profit and Loss
Many ICO has been a lucky option for dealers. ETH, as an instance, was marketed at 0.0005 Bitcoin and can be well worth today 0,05 BTC. Gain: 10,000 percentage. Augur token (REP) were offered for around 0,005 per year and are currently traded in 0,01.
On the other side, many ICO endings with losses. Cryptocurrencies such as Lisk, IOTA-token or even Omni didn't hold the worth from Bitcoin the token was evaluated in the ICO (or battle to maintain it). Frequently ICO is used by hackers and semi-scammers. Aside from the big and successful ICO, such as Lisk, Melonpost, Augur or even Iconomi, several small ICO did collect funds and delivered nothing at all.