What is an ICO anyway? The Initial Coin Offering explained.
ICOs are gaining popularity among cryptocurrency enthusiasts, but despite recent buzz, they are still confusing for those outside the world of cryptocurrency. In short, an “Initial Coin Offering” is a crowdsale of a new crypto asset that powers a new blockchain or service. ICOs represent a powerful new option for startup financing, particularly for those related to blockchain technologies. By August 2017, ICOs had raised more funds that early stage VC investment, which is no small feat. Understandably, people want a piece of the pie — even if they don’t fully understand what is in it.
For tech founders using the ICO model, the attraction is multifaceted. It allows them to retain agency and autonomy in their work, while also allowing it to be disseminated in a decentralized way. Ideologically speaking, this aligns with the very core of blockchain itself — an unchangeable, distributed, peer-to-peer network.
Given that recent ICO fundraising in the blockchain space has exceeded the amount raised by traditional seed investment, ICOs can already be considered a game changer for tech startups. Many are suggesting that the current ICO and blockchain boom is this generation’s dot-com boom, with investors ready and willing to take the plunge into uncharted territory.
According to CoinDesk’s most recent quarterly report, ICOs generated US$797 million in fundraising for blockchain startups in the second quarter of 2017 — compared to just US$235 million in traditional venture capital funding for such companies. Filecoin, which closed a roughly month-long ICO period on September 7, broke existing ICO records with a total of US$257 million raised since August 10. That figured includes a pre-sale of US$52 million that was joined by Silicon Valley VC heavyweights Sequoia Capital and Andreessen Horowitz. The previous record was held by Tezos, which raised US$232 million in a July ICO.
Complete article:
https://medium.com/@telcoin/initial-coin-offering-whats-the-story-e251acd35ec
