Reviews of ICO (Initial Coin Offerings)
First Coin Offering (ICO) is a crowdfunding strategy utilized by new cryptocurrency companies to increase capitals. In ICO, some percentages of the recently issued cryptocurrencies are offered to people who are interested in supporting the project. ICO list are sold to exchange for other established cryptocurrencies such as Bitcoin, Fiat and Ether.
Backers purchase the new cryptocurrency having an intention to make a profit when it increases in value. It is similar to the principle of people making a profit when the share they purchased in the stock exchange increases in value. ICO is different than purchasing shares at a stock market because you don’t receive a share of the ownership right once you purchase the new tokens.
Short Background on ICOs
Ethereum conducted among the biggest ICO in 2014 by raising a total of $18 millions in the early stage of 2014. They break the record by increasing 3,700 Bitcoins that’s equal to $2.3 million dollars within the first 12 hours of the campaign. Kik conducted the first Egyptian ICO in September 2017 however, the job was disrupted by a phishing scam through the circulation of a false URL in the social media. Ripple sold $1 billion value of XRP tokens to investors in exchange for bitcoins and fiats in 2013.
Now, ICO earnings have become increasingly more popular with around 50 nominal sales being conducted every month. Starting from 2017, ICO has been growing at a fast pace with $2 billion value of nominal earnings successfully conducted. This proves that it isn’t likely to become a temporary method utilized by fresh cryptocurrency business to increase funds but it is here to stay for extended term.
Nowadays, ICO market is so hot that at least several ICO begins every day. It has been predicted that over $4 billion value of token sales will be conducted this year. They manage to increase a total of $2.3 million in the market presale.
How Can ICOs Fundraising Work?
A cryptocurrency company which wishes to increase capitals via ICO must provide a few details including project description, project purpose, amount need to be raised, percentage of tokens the corporation will keep, types of virtual currencies approved, and the timeframe of this ICO campaign. Backers who are interested can email the seller and ask for more information of this project before doing a trade. If they increase the amount for the effort, they will carry out the scheme to complete the project. If not, they’ll return the money back to the backers.
How Scammers Use ICO to Take Out Fraud?
ICO can be conducted to help raise capital for a variety of types of companies and charity business. Additionally, it has been utilized as an instrument by scammers to conduct frauds. Scammers would utilize ways to increase the ICO value temporarily and leave the job afterwards to earn a fast profit. Scams happen cause of the lack of regulation from the government. 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 runs the ICO is granted so it’s tough to make a prediction. Backers usually would only check out info such as who will obtain the collected money, as well as the social networking profile. To make a successful investment in ICO, one wants to be patient and eager to devote some time to conduct research on the corporation.