ICOs, or initial coin offering, is the easiest and fastest way to crowdfund blockchain projects today. If you’re wondering what an ICO is, it is a coin or token that is handed to investors in exchange for established digital currency, like Bitcoin or Ether. The investors pay a certain price in exchange for an amount of tokens in hopes that the company sees profit, which raises the value of the digital tokens.
ICO is decentralized and largely unregulated, i.e there is no single governing authority for this mode of trading. The tokens are essentially just crypto-currency and not shares, which makes it easier to trade after acquiring them. Governments have no jurisdiction over the exchange of digital assets and crypto, and while this allows certain freedoms that traditional methods of investing do not provide, it also poses a great deal of risk.
The prices for Bitcoin and similar currency fluctuate rapidly and can turn out massive losses. Companies dealing with digital currency are also susceptible to hacks which could lead to bankruptcy and loss to investors. While these risks exist and markets still adapt to crypto currency, IC is now arguably the first choice in trading and investment for start-ups and blockchain projects in various fields.
Some of the most successful companies built on ICO funding are as follows:
NEO, smart contracts technology
Ethereum, smart contracts technology
Spectrecoin, privacy focused cryptocurrency
Stratis, blockchain for corporates
Despite skepticism by governments across the globe or alarming news of hacks and losses that run in millions, more people are taking to investing in promising ICOs. The prices may be volatile and the investment risky, but it hasn’t deterred enthusiastic investors for sure.