Financial world is changing as we speak. Disruptive technologies in Fintech are making their rounds across all sector by enhancing and empowering the sector as a whole. For example- the entire concept of home entertainment evolved when subscription-based services backed by fintech providers came into picture. Terms like cheques, Deposit etc are becoming scarce and scarce as the common mass choose online banking over over-the-counter banking. Even the concept of online banking has gone beyond currency exchange into the new era of cryptocurrencies, eCurrencies etc. Venture capitalists are vying for investment opportunities. Despite venture capitalists being hesitant regarding cryptocurrencies, they have paved a better course for future through ICO investments.
What is ICO?
Before ICO, companies and corporates usually secure their funding though angel investors and venture capitalists. However, there is something at stake here for this approach. This mode of funding comes with the price of sharing equity with them. Hence the only way to have a funding that doesn’t sacrifice a company equity was by going public. And companies achieve that by holding IPO.
When a private company decides to put their private share, public, IPO comes into play. This share can be bought by anyone and from anywhere. Initially these shares used to be at dirt-cheap rates and when the company hits the jackpot the shares balloon up to an exorbitant price. This trend then made the curious minds to think, what we applied the same concept in Blockchain technology, giving birth to ICO.
In ICO there are no centralised authority as it is a decentralised network. In the absence of numerous regulations, the red tape that accompanies the usual process has been blogged down. After the arrival of tokens which is basically the blockchain equivalent of shares in the usual process, ICO is gaining more and more popularity.
How it works
It works this way
- The first step would be, developers or brand executives declaring the intention of making the project.
- In the next step, required whitepapers, that explains the project in a detailed and descriptive way, are created.
- After this, brands usually get the backing and confidence of prominent members in cryptocurrency world, to become a part of their advisor team.
- Then would be the process of token creation, along with their various caps
- After token creation process, comes the token advertising process or token sale
- Once you have purchased the token through the token sale, you hold the ICO of that brand or project.
Should we invest in ICO?
The benefits of blockchain cannot be ignored. Its course will definitely change the landscape of financial sector. In this trend ICO will contribute. With ICO being the legitimate alternative for equity and depth financing, instead of investing in the future cash flows, investors can purchase the overall demand of the network.
Here are few reasons why you should invest in ICO
- With blockchain technology that is embedded with ICO, SMEs all over the world can request for credit worldwide, including World Bank and European Commission as well.
- ICO in a decentralised network can open unchartered territories in the financing sector. Trust and transparency become guaranteed when each and every step of the financial process gets executed by an independent entity.
- Promising projects gets funded without much hackles and restrictions
- Early access to potential valuable assets like tokens
- Innovation blooms without the hardship of financial constraints and this innovation will not only bring forth better quality but can also push forth the entire industry forward.