Cryptocurrency has been around for a number of years, but it really gained traction and popularity in 2017. It went from being the money of the future to the latest and greatest way to invest and get a great return rather quickly. Initial coin offerings (ICOs) are one of the investments that gained popularity along with cryptocurrency because they go hand in hand.
An ICO is a crowdfunding method that uses cryptocurrency instead of cash. Companies will offer tokens in exchange for a cryptocurrency that they specify. The token can then be used to purchase from that company in the future or can be sold to others. There are already numerous ICOs that are currently active and many that are scheduled for launch.
ICOs offer numerous benefits to both the companies that offer them and those who invest in them. One big benefit to companies that choose to raise funding through an ICO is that ICOs are typically much faster and easier methods of fundraising compared to other, traditional fundraising options. One of the big benefits to investors is that cryptocurrencies are quite liquid and can result in quicker returns and profits.
One of the reasons that ICOs have gained popularity and been such fast and effective ways of raising funds is their lack of regulation. Although, as they grew in popularity, there were some regulations placed on ICOs, they have been relatively unregulated up until now. Rather than having to jump through hoops, fill out paperwork, and see to it that all formalities are followed, and in some cases even ask permission, both those seeking funding and investors alike have been able to get down to business and get deals done more quickly when working through an ICO.
The lack of regulation isn’t all good, though. Because there aren’t any security protocols, and rules and regulations in place, virtually anyone can create an ICO, which means that some ICOs have been accused of being or uncovered as fraudulent. Not only is there a high number of fraudulent ICOs on the market, investors are not protected against fraudulent offerings since there aren’t many rules and regulations, and if they fall victim to a fraudulent ICO, they aren’t able to recoup the investment they have made.