ICO; What is it and why they are successful?

Investing is a topic everyone in the world should at least try to undersatnd. After all it is an alternative savings idea. But what is a modern alternative to the otherwise standard investment style? An Initial Coin Offering, or ICO.

What is an ICO?

Much like an IPO, an ICO is used by investors to assist start up businesses. Instead of the traditional stock investment, cryptocurrency is sent to the business owner to accomplish the same goal. ICO allow owners to bypass many regulations and laws established regarding early investments, and the trade back to the offerer is a percentage of the earnings based on the investment.

Basically the investor buys cryptocurrency for the owners, and the transaction is saved on the blockchain ledger. Any trading of the ICO results in profit for the business. But the ICO is more than just a craze that has no merit behind it. Almost 2.2 Billion dollars have been raised for start up businesses with ICOs in just this year. But what has caused the great success and much of the popularization of this particular investment?

 

The keys to why the ICO has success

One of the first reasons for the high success is the lack of other competition in the same setting. The major players; Apple, Google, Amazon, and Microsoft, have yet to really get into the crypto industry. This allows for Bitcoin to be the most popular vendor in an otherwise small competition base.

Another reason is how easy investing really is. If you like an idea the Initial Coin Offering system benefits both partisans; the investor and the business. Anyone can take part, no matter how large or small the investors backing may be.

But most importantly, the idea behind the ICO is extremely innovative. No other ideas of this scale or ease have been seen in almost a decade. The platform has shifted from stock investment entirely, cutting out the middleman of brokers and hedge funds. Its an incredibly simple yet exciting way of investing directly, and it has more than enough merit to vouch for this claim.

 

There are a few drawbacks however. This is a newer format, and regulations have yet to be made. As the Bitcoin and cryptocurrency markets gain a foothold in the modern world governments will seek out ways to regulate it. After all, regulations are implemented to protect all three parties; the individual, the business, and the governing sector. The regulations may in fact hit it hard, we don’t know yet. The industry is too young to tell right now. But it has still shown an immense value for startups, and is still thriving.