Initial Coin Offerings (also known as ICOs) are becoming one of the best new ways for cryptocurrency-based businesses to get their feet off the ground. In fact, ICOs are becoming so popular that the United States government has started trying to regulate them.
That is how you know that they are a big deal. But, how big of a deal are they? Well, I am going to tell you about some of the most important Initial Coin Offerings that have happened recently and you can be the judge.
Filecoin is a system that is supposed to allow people to contribute any empty storage space that they have available on their hard drive to be used to store cryptocurrency and cryptocurrency mines. The system is not in place yet as it is still in the Initial Coin Offering phase. This is how a business gets the funds to implement its idea. Basically, they sell the idea to investors and then do the ICO to raise funds.
Investors will put in their money with the understanding that they will get a cut of the profits and certain perks on the platform once it goes live. Anyways, Filecoin’s ICO has been quite successful – raising in excess of 250 million dollars since its ICO went live on the 10th of August.
This huge amount of money is likely attributed to the fact that only wealthy investors were allowed to invest in Filecoin’s ICO. The ICO will continue until some time in the beginning of September, so there is still time for even more money to be raised.
Tezos sold itself as a “new digital commonwealth” to utilize the power of smart contracts to handle transactions seamlessly. However, other blockchain platforms that use smart contracts run into some problems. This is what makes Tezos different. They implemented methods to mitigate issues that other platforms (such as BTC and ETH) face when handling smart contracts.
What happens when people do not agree on protocol updates? On any platform, it could lead to a stall in growth or even a hard fork in that network that drastically disrupts the market. Not on Tezos! This is what made the Tezos idea so attractive to investors.
The ICO for Tezos was held back in July of 2017 and it was the most profitable ICO ever until Filecoin’s ICO just a few weeks ago. For the span of the 13 day ICO, Tezos was able to raise approximately 232 million dollars’ worth of Bitcoin and Ethereum. This mass investment allowed Tezos to start its own cryptocurrency so that it can be independent of another cryptocurrency’s market fluctuations to ensure an even more stable platform.
EOS is a kind of cryptocurrency that recently held an ICO (back in July) to raise funds to get its blockchain up and running. The idea is that huge corporations could use the platform laid out by EOS to speed up development of software, automate certain procedures that used to require humans to do, and even keep track of their money.
Due to it being aimed at huge corporations, the ICO for EOS was able to raise a very substantial 185 million dollars by the time of its close.
Bancor is a controversial platform and its premise was to provide liquidity for various kinds of online assets. The controversies stemmed from the stated process of how Bancor was going to provide that liquidity. Various people found flaws with their stated process and pointed them out. These critiques gained widespread attention and it hurt Bancor’s standing.
Another controversy that Bancor faced was during its ICO. The Ethereum network that they used to process all of the investments in the ICO got overloaded due to the sheer amount of transactions. This led to the network taking longer to process all of the trades.
To try to solve this problem, Bancor kept the ICO open longer so that all of the trades could be processed and any trades that could not go through initially could have a chance to be resubmitted. This was controversial because some traders felt that keeping the ICO open longer could devalue the Bancor currency, known as Bancor Network Tokens, due to oversupply.
Despite these controversies, Bancor was able to raise 153 million dollars’ worth of Ether in its very successful ICO back in June 2017.
Status is a new company that held its ICO back in June 2017, just like Bancor. However, it did not experience the same success as Bancor. It still raised a nice amount of money though – roughly 108 million dollars’ worth of Ether.
What made people invest in Status? The premise of it being an decentralized hub where developers can develop apps and then put them up for sale on the platform.
Status makes it easy for these apps to be found and purchased by other people or companies to help out their businesses. Status also has its own messaging application to make communication between developers and buyers easier.
Just like Bancor, Status used the Ethereum blockchain for its ICO, which led to trade processing issues during the ICO. They did not extend the time of their ICO to accommodate these technical difficulties, though.
The Wrap Up
All of these new businesses were able to raise hundreds of millions of dollars’ worth of various cryptocurrencies in just a few short weeks. That tells you all you really need to know about how big of a deal these kinds of businesses are. It also shows you how seriously wealthy investors take Initial Coin Offerings and how they are likely to stick around and be the future of big time business launches.
Are you a wealthy investor looking to invest in some new tech startups? There are plenty of ICOs that have already started or will be starting soon so you can just do a quick Google search to find some. You can even jump in on the Filecoin ICO before it ends in a few days!