In my unprofessional opinion, an ICO (Initial Coin Offering) will replace the IPO (Initial Public Offering) just like the Decentralized Exchanges (DEX) will replace current exchanges, and Atomic Swaps will be fluid in our daily transactions. This will take time, as regulation will be made, and our understanding of blockchain deepens. However, we already have had many ICOs, and we already have a few DEXs.
An ICO should be looked at as an unregulated way for a firm in the crypto-space to raise money, and fund their project(s). It is a way for crypto-firms to bypass regulation and raise funds quickly, while jumping onto the cryptocurrency hype, so caution must be taken as most crypto-enthusiasts see ~90% of ICOs failing.
In the ICO's current state, when you purchase a coin/token, you don't own a share of that firm. The firm isn't required to disclose information as they would after an IPO. However, if there is a lot of buzz around said firm, their token value theoretically should increase. This is the lower form of an ICO, but there is another which might deserve a little hype. The other would be purchasing a coin or token to hold a stake in the future of technology.
To see why one would participate in an ICO, take a look at Ethereum. Miners run the blockchain, and keep things running. Without miners, there is no blockchain. The reason to hold Ethereum is because network transactions require "gas" to pay the miners. As more people start using Ethereum, the demand for Ethereum increase which drives the price up, and earlier adopters of Ethereum see the value increase.
Cryptokitties: Collectable, Breedable, Adorable. right? haha, anyway... Cryptokitties is a blockchain powered game that lets you breed and collect kitties. To pay for the breeding and collecting, you use Ether. Lets say that you bought Ether (Ethereum's currency) in March 2016 when Ether was ~$12. Now, two years later, Ether is ~$400. Big win there, yes. Back to Cryptokitties, you see an adorable kitty that you just must have. The cost of getting that Cryptokitty is .09 Ether. Since you were an early adopter, that technically only cost you $1.08, but if you were buy Ether and use that to pay for said kitty that would cost you $36. In all honesty, don't buy the kitty, despite how adorable it is.
Looking to the future. Firms in the cryptospace are working on ideas from blockchain driven smart phones, to blockchain driven internet that will power the IoT and the Smart Economy. While blockchain helps bring in a more secure future, the tokens that we purchase will be used to power the blockchain behind it all. Most ICOs will probably fail, so there will be lots of research required. The best ICOs will be those that are for tokens that will help pay the miners, and are seen as an investment in the firms network. If blockchain is able to power the future, tokens will be the key to getting something done.
Understand that if you are going to participate in an ICO that it is most likely a start up looking to raise some money. As is the case will early startups in any industry, most will fail. If it is a crypto start up, then you really must look into all that they are trying to accomplish. Try understanding the tech behind it all, and only risk what you can afford to lose. And please, try not to fall for any promotions such as discounts or "buy one get one" etc.
follow on twitter @postmattern and @CrypTokenNews
To see why one would participate in an ICO, take a look at Ethereum. Miners run the blockchain, and keep things running. Without miners, there is no blockchain. The reason to hold Ethereum is because network transactions require "gas" to pay the miners. As more people start using Ethereum, the demand for Ethereum increase which drives the price up, and earlier adopters of Ethereum see the value increase.
Cryptokitties: Collectable, Breedable, Adorable. right? haha, anyway... Cryptokitties is a blockchain powered game that lets you breed and collect kitties. To pay for the breeding and collecting, you use Ether. Lets say that you bought Ether (Ethereum's currency) in March 2016 when Ether was ~$12. Now, two years later, Ether is ~$400. Big win there, yes. Back to Cryptokitties, you see an adorable kitty that you just must have. The cost of getting that Cryptokitty is .09 Ether. Since you were an early adopter, that technically only cost you $1.08, but if you were buy Ether and use that to pay for said kitty that would cost you $36. In all honesty, don't buy the kitty, despite how adorable it is.
Looking to the future. Firms in the cryptospace are working on ideas from blockchain driven smart phones, to blockchain driven internet that will power the IoT and the Smart Economy. While blockchain helps bring in a more secure future, the tokens that we purchase will be used to power the blockchain behind it all. Most ICOs will probably fail, so there will be lots of research required. The best ICOs will be those that are for tokens that will help pay the miners, and are seen as an investment in the firms network. If blockchain is able to power the future, tokens will be the key to getting something done.
Understand that if you are going to participate in an ICO that it is most likely a start up looking to raise some money. As is the case will early startups in any industry, most will fail. If it is a crypto start up, then you really must look into all that they are trying to accomplish. Try understanding the tech behind it all, and only risk what you can afford to lose. And please, try not to fall for any promotions such as discounts or "buy one get one" etc.
follow on twitter @postmattern and @CrypTokenNews
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