For initial coin offering, 2017 was at least meaningful if not the best in terms of popularity. This year, ICO made its way from an almost unknown fundraising method in the blockhchain community to a system that allowed generating more than $4 billion in a few months.
The issuing of digital tokens allowed blockchain projects to raise money for their startups. Investors bought these tokens, which could later be traded or used within the project. The main difference between ICO and IPO is that investors do not get any equities of the company they’ve invested in, therefore they are not able to control anything.
It all started in 2015-2016, when Ethereum and DAO raised millions of dollars due to their smart contracts and thereby attracted public attention to the token.
However, the ICO really kicked off in 2017.
According to ICOdata research, almost $5 billion was in ICO funding this time, and November was the most active month with more than $900 million in funding.
The main advantage of a tokensale for projects is the opportunity to organize campaigns to raise funds without any control, financial reports, the need for minimum viable product and proof that the company really exists.
There were many scammers and unfair individuals on the ICO market due to low barriers to enter the fundraising process and no regulation. Scammers created not only some "dummy corporations", but also the “social” projects. Thus, the Useless Ethereum Token (UET) positioned itself as the first 100% honest ICO startup, it’s white paper claimed: "You’re going to give some random person on the internet money, and they’re going to take it and go buy stuff with it. Seriously don’t buy these tokens." But even after that, the team without any product managed to raise 310 ETH, which is now about $256 thousand.
What to expect from the ICO market in 2018? The number of ICO startups is growing, and the low barriers to enter the fundraising process have not decreased.
Institutional money will start entering cryptocurrency market and ICO more actively. Most probably, the initial coin offering as an idea will continue to gain traction.
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