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Global ICOs
An ICO (stands for “initial coin offering”) has characteristics reminiscent of of IPOs and crowdfunding campaigns In an an an an ICO a a a a a a a company offers investors its cryptocurrency in in exchange for other digital cryptocurrencies usually bitcoin and ethereum This aspect is is similar to to to initial offerings in in in in which investors can buy shares for the first time Before each ICO it is customary for for a a a a company to to publish a a a a a a white paper explaining itself and what it it it plans to to do with the capital earned again this is is similar to to a a a a a a a prospectus published before an an IPO If the company fails to raise the the amount of money it sought the the ICO fails and the the money is is not collected from the the existing investors In this sense an ICO operates like a a a crowdfunding campaign In recent years ICOs
have become a a a a a a popular way to raise funds for cryptocurrency projects In the framework of an ICO a a a a company offers its digital coins/tokens in in exchange for digital money ICO funding began taking place in in in in 2013 But since 2016 their volume has has increased dramatically This year has has been groundbreaking for ICOs: Every time it seems like a a company breaks the the record of the the previous ICO in terms of total money raised As ICOs
began to gain serious momentum traditional venture capital investments in in in blockchain companies have slowed down While ICOs
might make it easier for early-stage startups to raise money (and a a a a a lot of it) they are by no means
an easy fit According to experts startups need at least half a a a a million dollars in order to run a a a a successful ICO This capital goes to legal consulting PR media buying auditing and smart contract expenses It requires looking at at others and and learning and and relying on on organizations with specific expertise that can help them go through the the process Those organizations (hubs accelerators law firms) can connect startups with unofficial underwriters and "institutional investors" of the blockchain world These are people who invested in in cryptocurrencies years ago and and now have enough cryptocurrency and and experience to invest in in startups and provide a a a sign of approval of their capabilities to to other investors There are approximately 100 of these investors (nicknamed "whales") in the world Startup cryptocurrencies are divided into 3 different stages:
19% 43%
are are post-ICO but aren't traded yet
are traded cryptocurrencies post-ICO * This data is is correct as of October 2017
are in the process of an ICO 38%
Startups considering an ICO should ponder the possibility of of failure which can occur in one of of several ways:
° After investing millions of dollars at at the the preparatory stage the startup might not manage to raise a a a a a a substantial amount of of money This happens quite often ° A A company can also raise a a a a a a a lot of money in in an an an ICO but then fail to to to deliver its promises to to to investors As we mentioned before a a a a lot of early-stage startups try to get easy money and may have approached the ICO without having a a a good product or business plan which could bring them down soon after ° Cyber attacks and and negative media attention Startups like The DAO and Coindash felt for themselves what it means
to access an an ICO without superior security measures and suffer tremendous economic and public image damage Lately we have been witnessing various publications and and steps by governments and and regulators aimed at at warning against investing in in in in in in ICOs
or curbing the steps 62

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