The year 2017 was not only the year of Bitcoin and crypto currencies. It was also the year of the ICOs, that is to say the Initial Coin Offering.
Thus the funds collected by the ICOs since the beginning of the year, were $ 4 billion. Compared to that of the IPOs which was 188.8 billion dollars for the same period, this sum may seem ridiculous.
Yet this is still an explosion for this type of fundraising.
Because it should be noted that in the first half of 2017 the total number of ICOs already exceeded that of all the year 2016.
Finally, according to ICO bench, more than 180 new ICOs should see the day in 2018.
What is an ICO?
But what is an ICO?
In fact, an ICO is a new way of raising money for businesses.
In general, these are startups that need investors to develop their projects. These companies issue tokens on their Blockchain. Then the first investors can buy these chips against crypto currencies. In addition, these ICOs are limited in time and the amount they are supposed to harvest.
The company will also decide what value to give to their chips and how much to get out of the market.
What are the reasons for the success of ICOs?
But in reality these ICOs respond to the problems of justice and equality found in traditional methods of financing. Methods that could be summarized as follows: it takes money to get more money!
The ICO will therefore allow projects from disadvantaged sectors and domiciled outside major cities, to raise funds, without depriving the founders of their share.
Are ICOs scams?
But despite the interest of this type of fundraising, many wonder if the ICOs are not scams.
Unlike traditional fundraisers, ICOs are currently not regulated.
And it must be recognized that many startups have launched ICOs that have not kept their promises to investors. Because these ICOs were launched without real preparation and without solid team to develop their project. They were content with a website provided and a semblance of white paper.
Just take for example DAO. This company managed to raise $ 150 million through its ICO, but lost a lot of its funds during a piracy.
Some ICOs are even real scams, like those launched in November by Maksim Zaslavskiy. His two ICOs were not based on any reality.
How to know in which ICO to invest?
That’s why some websites have been created to respond to the concerns of future investors.
These sites aim to guide them through this new market.
Take the case of ICOtoInvest.com. This site checks who the actual members of the team behind the project are. She also checks the details of the white paper, the quality of the website, as well as the transparency of the project.
ICOtoInvest has already recognized the potential of trade.io and has raised more than $ 20.5 million
What future for ICOs in 2018?
So at the beginning of 2018, what will be the future of ICOs?
First of all it is likely that governments are still trying to regulate these new fundraisers.
Moreover, the ICO will certainly offer us even more projects that will not be limited to the development of blockchains, trading or payments. But who will propose projects on Blockchains applications in the real world.
The future of ICOs in 2018 should be very promising.