What's your thoughts about ICO?
ICO had been booming since last year, however more than 80% of them are scams. Currently, South Korea, China and India "ban" ICO, therefore do you still think that ICO should be the way for crypto related project to get funded?
ICO, like any other instruments, are just a means to raise funds or build publicity on the side of the issuer, as well as an investment opportunity on the side of the investor.
There are tons of compliance and regulation when it comes to IPO and Series Funding. ICO represents an "easier" to raise funds via cryptocurrency since technically the blockchain is borderless. There are scams on both sides of the argument. Only that perhaps because of decades of enforcement and regulation, non-ICO fund raising scams are way less simple than most ICO scams.
Take Theranos for example. Despite all the regulations and compliance issues that Elizabeth Holmes and her lawyers managed to overcome, It still ends up being revealed as a "Billion dollar scam". So the assumption that legal compliance translates to no-scam is dangerous.
In many countries, people are locked out of investment opportunities because they lack the network or capital to do so. In the US, you literally are locked out of Series Funding investments if you aren't a millionaire (accredited investor) because SEC is "concerned that poor people can't make sound investments" (extreme paraphrasing here). The rich gets ample opportunities t get richer while the poor are legally banned to do the same thing.
ICO was envisioned to be a way to solve the capital rent in the investment industry. Startups can get funding opportunity from a larger pool of investors while people can invest any amount possible without government intervention and potentially get as much percentage returns as millionaires. Ideally a win-win.
Reality isnt so beautiful though. The compliance and regulations were there in the first place to protect investors from scams and bad faith. Without the regulations, it's the Wild West. Anyone is free to do what they want and the only protection to the investors are their own wits.
It's too early to say whether anything good will come out of ICO, But over the past 10 years, the highest performing investments are all undisputedly ICOs.
<source: steemit.com/crypto/@hilarski/what-ico-s-have-had-the-highest-returns>
This is the sort of scenarios where the free market literally comes to play. Good investments makes overnight millionaires while bad investments leaves the investors with nothing. No one is there to interfere regardless if things went north or south. There's a funny saying where "the most you can lose is 100%, but there are no limits to the gains", obviously not a good advise. though it does shed light to what's going on in the ICO space.
On Whether ICO is the only way. Heck no.
We as Steemians are literally either seeing or participating in another crypto-alternatives to fund raising. Musing.io recently (as of time of writing) just gotten a delegation of 400+k Steem Power. The sort of opportunities that comes with such a delegation is massive. And I can't state all the advantages of using delegation as a form of investment and fund raising mechanism as compared to direct capital investment.
And then there is crypto microloans, or even smart contract itself, where the possibilities are literally endless. Imagine a type of funding round that incorporates FOMO type smart contract in place of Series funding. Where people and firms can "place their bets" on each funding rounds where the funds gets unlocked only when the smart contract requirement is met. Would it work? I have no idea, but it shows what can be done.
What cryptocurrency is doing to finance is akin to how the internet changed the way we learn, or what automobiles did to transportation, or how farming changed the way humans look for food. Sounds grandiose as heck, but I am confident it's what we're seeing.
ICO has irreversibly changed how people look at the idea of fund raising. There will always be scams, and the scams will only get smarter. But the possibility of placing your money even if in minuscule amount as a show of faith and the ability to fund ones company without the restrictions of border is something that we cannot turn away from. it would serve the governments better not to outright ban such a powerful tool. Even doing so in itself might have political ramifications which is an entire different conversation.
An ICO is a horribly inefficient method for raising capital. (I also believe most run afoul of U.S. securities laws, even if the SEC has not been aggressive at enforcement.)
In conventional venture capital, as bad as it may be in many ways, money invested is usually proportional to company progress. A company gets a little investment to start-- a few million dollars, usually, or even less. Then when it has success building a product or finding product-market fit, it can raise more money--- maybe tens of millions. Finally, when the company is growing quickly and has proved its value, it can raise hundreds of millions in an IPO, or from large private equity investors.
ICOs almost uniformly squash all these tranches together. The founders get all the money up front. (And why wouldn't they?) They raise entirely on promise, not on results. So if the idea doesn't work, or the token doesn't find an market, there has been enormous waste, compared to incremental funding.
There are other flaws, but I think this is the key one: fundraising happens all at once, without any proof of product-market fit.
(I wrote a more in-depth analysis of Filecoin on Steemit previously: https://steemit.com/filecoin/@markgritter/should-you-pay-for-storage-with-filecoin-probably-not)
At this time, ICO is no longer as good as the old days, more and more emerging ICOs have made many projects fail, resulting in scams, big losses for investors and bounty hunters, prices not in line with expectations. Choosing a project that really works is very difficult at this time.
True, around 80% of them are scams and the only promises given by the ICO is via whitepaper which is not back by anything, which in this case the dev can just take money and run away.
ICO is a proven and effective method for kickstarting crypto projects, provided the product is in demand and the team that works on it is good. There are several similarities between the concept of Initial Public Offering and ICO. However, there are several key differences.
There are many possible benefits by participating in the ICO. What is clear is: You help companies launch their products. There is also an opportunity to make profit selling ICO tokens after you buy them. the main purpose of each ICO participant is to help fund a project that they think is interesting. However, there is an additional opportunity to benefit in the process.
You must remember that not all are guaranteed to be profitable. If the ICO campaign may fail and in one case, all contributions will be returned to the sender. Even if successful, there is a possibility that the developer cannot send the final product and the token price will never rise. This is the risk that all ICO participants must take into account when they decide to contribute to any campaign.
It's true that ICO manages to fund so much money, which might be like a honeypot for a lot of scams. I hope that the cryptocurrency culture will change then it would be a healthier growth overall for blockchain project.
View this answer on Musing.io
View this answer on Musing.io
ICO stands for Initial Coin Offering which means a start-up or team that is looking to run their project / project and use the ICO method to get funding (crowdfunding), by participating in ico by sending funds through the payment method specify that we will get tokens from the project.
Through the ICO method many advantages can be obtained:
Projects that are being planned can be quickly implemented and tried whether or not the project is successful
Can encourage the development / advancement of technology through ideas born of new start-ups that appear throughout the world
this year a number of companies and startups raised US $ 1.4 billion via ICO. The ICO itself is fundraising to build applications related to Blockchain and its implementation such as bitcoin, smart contracts, and smart ledgers.
Through this ICO World Tour forum, Blocktech aims to help the Blockchain and Cryptocurrency industries in Indonesia reach global standards, "Steven said in a statement on Wednesday (1/11/2017).
At the event Blocktech introduced Sebastian Quinn Watson from Blockchain Global Limited as a strategic partner with a number of partners from Indonesia, Australia, Canada and South Korea. Until now, Sebastian and the team managed to collect more than US $ 310 million in the sale of ICO tokens this year.
For information, Bitcoin and other currencies are built on technology called Blockchain. However, not many people know that Blockchain technology can be used for other uses, such as building a decentralized database.
On the same occasion, Hope Liu as CEO of Exchimchaim Singapore presented the function of the Blockchain used by his company to develop the supply chain industry.
Blockchain is also used Gregory Van Den Berg, CEO of MiCai in Beijing to facilitate compliance with regulations in the field of wealth management.
it's a trustbreaker but its been growing for years , before i got back on social networking i spent more time on steam to kill time that needed to die, a shameless way of making money on unfinished products with disclaimers that give you no guarantee whatsoever you're ever going to get anything
i didnt know they banned it there but as much as i'm against any kind of regulation by the government to "protect the people from itself" it might not be a bad idea for once
ofcourse, nothing should be just black & white, maybe they could consider an office to "apply" for ICO, where it can be revised to see if it has any chance at all or if it's just selling hot air to take the money and run.
and that, ofcourse brings it back to bureaucracy, unless they outsource it , in which case you get the same problem because private sector sharks will sell out to give licenses to those who pay
humans ....