A 2018 Guide To Investing in Initial Coin Offerings

[Goodcat49]

In the late 80s and early 90s, it was a standard procedure for the fastest growing companies to IPO (Initial Public Offering) in less than 5 years. The same can be said of Initial Coin Offerings (ICO) in the cryptocurrency market in the 2010s -- with ICOs often being one of the first projects to be pursued by many blockchain startups.

The recent uprising of ICOs has transformed the way companies seek investment and fund their projects development and operational costs for their business. Comprehension of this business model is a somewhat difficult and scary thing for an investor to become a part of -- hedging their savings on something that hasn’t even been created yet. Even so, this is exactly what is happening in the blockchain space right now. 

The Big Difference

There is a difference between and IPO, and ICO. That being if an investor participates in an IPO you own part of the company as a stock. On the other side of the spectrum, if an investor takes part in an ICO, you own a digital asset coin, that is issued by the company. Usually, the currency is some sort of utility token with its own specific role in the company's ecosystem trading between i.e a consumer, a content-maker and an advertiser.

The increasing demand rises the intrinsic value of the currency sometimes by tousands of percentage. To put this into perspective, the highest performing stock in the S&P 500 rose only 132% in 2017. Whist the top 20 best performing ICO’s rose by an incredible 20,000%. These kind of gains are never guaranteed and can come with a lot of price volatility.

Read the details in the article of Coinidol dot com, the world blockchain news outlet: https://coinidol.com/guide-to-investing-in-initial-coin-offerings/