Reviews of ICO (Initial Coin Offerings)
What’s the Definition of ICO?
Initial Coin Offering (ICO) is a crowdfunding strategy used by new cryptocurrency businesses to raise capitals. In best ICO , some percentages of those recently issued cryptocurrencies are sold to people that are interested in supporting the project. They are offered to exchange for other based cryptocurrencies like Bitcoin, Fiat and Ether.
It’s similar to the principle of people making a profit when the share they bought at the stock market increases in value. ICO is different than buying shares at a stock exchange because you don’t get a share of the ownership right when you purchase the brand new tokens.
Short History on ICOs
Ethereum conducted one of the biggest ICO in 2014 by increasing a total of 18 millions in the first phase of 2014. They violate the record by raising 3,700 Bitcoins that’s equal to $2.3 million dollars over the first 12 hours of this campaign. Kik ran the first Egyptian ICO in September 2017 however, the project was interrupted by a phishing scam via the circulation of a false URL from the social websites. Ripple sold $1 billion worth of XRP tokens to investors in exchange for bitcoins and fiats in 2013.
Now, ICO earnings have become increasingly popular with approximately 50 token sales being conducted each month. Beginning from 2017, ICO has been growing at a fast pace with $2 billion value of token sales successfully ran. This proves it is not likely to become a temporary method used by new cryptocurrency business to raise funds but it’s here to stay for extended term.
Nowadays, ICO market is so popular that at least a few ICO begins every day. It has been predicted that over $4 billion worth of token sales will be conducted this past year. Genesis Vision, a Russian based company, conducted an ICO effort that runs from the 15th October 2017 into the 15th November 2017. They figure out how to increase a total amount of $2.3 million in the token presale.
How Can ICOs Fundraising Work?
A cryptocurrency firm that wants to increase capitals via ICO must provide a few details including project description, project purpose, amount need to be increased, percentage of tokens the company will keep, kinds of virtual currencies accepted, and the period of the ICO campaign. Backers who are interested will email the vendor and ask for more details of this job before doing a transaction. If they increase the amount for the campaign, they will carry out the strategy to complete the undertaking.
How Scammers Use ICO to Carry Out Fraud?
ICO can be performed to help raise funds for various types of companies and charity organization. Additionally, it has been used as a tool by scammers to run frauds. Scammers would use means to increase the ICO value temporarily and abandon the job afterwards to earn a quick profit. Scams happen because of the absence of regulation from the authorities. The same as any investment, there is a risk when coming to put money into the initial coin offering.
No statistic about the company that conducts the ICO is given so it’s hard to generate a prediction. Backers usually would have a look at info such as who will receive the accumulated cash, and the social networking profile. To make a successful investment in ICO, one wants to be patient and eager to spend time to conduct research about the corporation.