The ICO is not over – regardless of what you might hear!
The rise of the initial coin offering (ICO) has been big news since 2o17. We’ve known that ICOs could be possible for years. Evidence of this dates back to the early years of Bitcoin, but once ICOs became a reality it was even more amazing.
The investment vehicle was not bank or an investment broker – it was simply a distributed platform to connect investors (buyers) with the business (sellers). In return for their investment, buyers did not get shares in annual profits, but they could benefit from the value of the token inflating.
Who Can Run an ICO?
Anyone with an creative idea can create a token and convince their friends, family and network people to invest into it. In essence, through an ICO, businesses, bands, schools, platforms, sports teams and entrepreneurs of all varieties could raise investment into their ideas.
We’ve seen ICOs of all sorts – from very serious medical companies, through to majorly advanced tech systems ranging through to creative and fun businesses.
Why have an ICO?
Mainly, ICOs offered an opportunity for anyone to invest and get involved in enterprise while bypassing the overly regulated, bureaucratized, and impenetrable system of traditional financial markets, including venture capital funding.
Consider an ICO the democratisation of investment and fundraising, very similar to Kickstarter or other crowd funding platforms. The possibilities are without limit – like nothing ever seen before it in the history of finance.
The Risks of ICOs
The problem with ICOs are that there have been many fraudulent ICOs and scams with many people losing money by investing in the wrong ICOs. People have become sceptical. Make sure to do your research into the team behind any ICO and their credibility to carry out their proposed innovation before buying into their initial coin offering.