Understanding Initial Coin Offerings (ICOs)

Two decades ago, you would never believed that you could buy a product with money that isn't minted by a central bank.

15:59 14 June 2018

Today, we have a lot of decentralized currencies out there, all of which are mined and not minted. Cryptocurrencies are threatening to take over, and it doesn't look like relinquishing their hold anytime soon.

 

The cryptocurrency sector is bursting with a whole host of advantages for the financial aspect of our lives. It is more secure, doesn't require third parties or regulation boards, and best of all are initial coin offerings (ICOs), which could never have been possible without the ability to exchange cryptocurrencies.

 

ICOs are a way for startup businesses to gain investments quickly. During an ICO, a startup offers investors the chance to buy its tokens. These tokens are always sold at low prices, thereby attracting millions of investors from different parts of the globe. They are exchanged for valuable cryptocurrencies such as Bitcoin, Ripple, and Ethereum.

 

Investors buy these tokens by the bulk with the hope of trading them in the future for huge profits. Of course, making a profit from the future sale is dependent on the success and stability of the startup that issued the tokens.

 

The first ICO was undertaken by Mastercoin five years ago. Ethereum raised millions from its ICO. Today, Ethereum is one of the top five most valuable cryptocurrencies. Last year, over a billion dollars was raised by different ICOs around the world.

 

They have a whole lot of positives. However, there are many people that still doubt it's transparency. This is mostly because they are unregulated. A perfect way to describe ICOs is with these famous words - "There is no good without the bad."

Article created by the crypto specialists over at BTXchange.io.