Cryptocurrencies have revolutionized the world of finance. These digital currencies use encryption techniques to verify the transfer of funds and regulate how currency units are generated. Now, a world based on blockchain technology has been created with huge impacts on how business is done and financial activities are carried out. One of the most recent topics in the world of cryptocurrencies is the subject of initial coin offerings (ICOs).
ICO is as recent as 2013, and has already attracted so much attention based on the huge positive and negative impacts it has had since its inception. ICO is a new trend that enables startups to get funding and raise money for their projects. It does this by providing the startup with a chance to trade future cryptocurrencies against cryptocoins that have liquid value.
In 2017, for example, Btxchange.io claims that a startup web browser called Brave generated $35 million in less than 30 seconds in initial coin offering. You read that right – $35 million in less than a minute! That’s how huge an impact ICOs can have on a startup. It is noteworthy that just as beneficial as ICOs can be to startups, so can it be laden with frauds and failures. This is because it does not have regulatory oversights as initial public offerings (IPOs) ordinarily do. It, therefore, calls for caution and vigilance. However, it remains an effective funding aid for startups if appropriate steps are followed. At least, Ethereum, the second biggest cryptocurrency right now, is a product of ICO.
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