Why is ICO becoming a bad word?

The fierce battle in the cryptocurrency arena: high risk is high reward

Why is ICO becoming a bad word?

Leer en Español:¿A qué se debe la mala fama de las ICO’s?

Bitcoin is the most well-known cryptocurrency in existence. It operates under a Blockchain system <What is blockchain and why does it matter>. The Blockchain is described as the next big disruptor for economics, law, and music, according to Harvard.

Whiel there is no doubt that we’ll hear more about Blockchain, there’s not such certainty about Bitcoin. Bitcoin has suffered the <pressure of governments> and it’s functioning is primal and “not optimal” for today’s standards as it was only the first cryptocurrency to be developed. As in any other market or nature, as soon as the leading force shows weakness, competitors will pray the pot.

An ICO is an “Initial Coin Offering”, the first ICO occurred when Bitcoin was launched, then came Etherum. Today we observe a surge in ICO’s. Adshares, Tripally, GlobalB2B Services Exchange, BitBoost and TokenStars are just 6 out of the 39 ongoing ICO’s in www.ico-list.com. In addition, 24 more are set to start soon and 58 have just finished. For sure there’s competition for becoming the leading cryptocurrency for the future.

Read also: Is it a good idea to invest in Bitcoin?

The current economic theory states that once a market is discovered, a great inflow of players to the market will appear until the total benefits –money people are willing to spend- reach zero. Until then, more and more companies will try to lure investors with often innovative but risky proposals. A more legal perspective would suggest potential investors remain cautious about the situation, as international regulations for cryptocurrency have not been clearly established. There is economic and legal turmoil around cryptocurrency, which creates a highly risky environment, which also creates room for the better profits if a good bet is placed.

Most ICO’s are signaled to emerge from those who got rich with Bitcoin since a piece was worth USD 2.20 in November 13th 2011 and could be sold at USD 4969.10 by September 2nd, 2017. A single USD 100.00 investment in the initial date would have generated USD 496,690.00 by the current peak. Those who invested USD 500.00 back in the day and held their position are now millionaires, and you’d expect them to keep seeking for more money.

Instead of putting their money into a bank account and start paying taxes, those who already own a stake in the new economy have opted to create their new currency. The need for diversification is an obvious consequence of the initial success. 

In the end, the ICO battle is a human battle as any other across history. In e-finance, a company is valued as much as it is composed of a solid and strong team, is connected to the medium, shows deep transparency, has a specified use, provides liquidity, is constructed with quality code, and has a clear differential.

Plenty of benefits will be sold to those who expect to take benefit of today’s gold rush, but in the end, the most critical element is trust in the company in which you put your money. Only invest where you trust.

 

Latin American Post | David Eduardo Rodríguez Acevedo

Copy edited by Laura Rocha Rueda

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