What is an ICO, and why you should know about it

While risky, an ICO investment could net you a return worth millions

As bitcoin begins to experience widespread use in various retail markets, it could be time to consider investing in one of many new crypocurrencies by taking part in an ICO (initial coin offering) campaign.

In some cases, the return on investment for some has proven to be huge. In fact, a new generation of cryptocurrency millionaires is emerging, and taking part in an ICO campaign could help you join this emerging demographic.

First things first: What is an ICO?

An ICO is a tool used to help fund the development of a cryptocurrency.

The developer will offer you future cryptocoins (or “tokens”) in return for the investment of cryptocurrencies that have immediate value – such as bitcoin.

They are essentially coupons that could have significant cash value somewhere down the line.

Some view ICOs as similar to stock market investments; however, buying ICO tokens does not grant any ownership over the cryptocurrency.

An ICO campaign can last a few weeks. During this time, anyone can purchase tokens using an established cryptocurrency.

ICO campaigns normally take place in two stages. During the first state, investors are offered a better price than they would receive if they bought in during the second stage. This encourages investors to get in on the ground floor and help fund the development of the cryptocurrency as a quickly as possible.

The increasing popularity of cryptocurrencies

More and more brands in a wide range of sectors are embracing the use of bitcoin. We are entering an age where cryptocurrencies could likely become the choice of consumers around the world.

There is a varied market for bitcoin, and we will only see it expand in coming years. Big name retailers like Overstock.com have started accepting bitcoin transactions, as well as travel sites like Expedia.com.

Even dating apps like OkCupid are starting to allow its users to purchase extra features using bitcoins, while a number of bitcoins casinos like the ones listed on this page have popped up and offer players great perks like no deposit bonuses.

Bitcoin is seen as an attractive option for brands because it presents a borderless shopping experience.

Consumers from around the world can make purchases without worrying about exchange rates, and retailers benefit from much lower transaction fees (just 1 per cent, compared to the 3 per cent charged by credit card companies). There are sweeping benefits for all parties involved.

This is why it is a wise decision to begin looking into ICO investments soon. There could be a cryptocurrency boom in the retail, travel and gaming markets – which would result in ICO tokens for some new cryptocurrencies becoming hugely valuable.

Should you invest in an ICO?

Over $2 billion has been invested in ICOs over the course of the past year. Backers around the world are eager to get in on the ground floor of the next new cryptocurrency, and it could turn out to be an investment of a lifetime if you choose wisely.

Ethereum is a great example of an ICO that has offered a great payoff to its investors. When it was first launched as an ICO, the company raised about $17 million worth of bitcoin for its development. Ethereum hadn’t gained much attention, as it was only a simple cryptocurrency, but investment from ICOs helped the developers add more features. Thanks to ICO investors, Ethereum has become a sought-after cryptocurrency, and those who invested are now looking at an 84 720 per cent ROI.

While Ethereum is just one example, there are other cryptocurrency ICOs that have experienced similar success. Since their respective ICO campaigns, Stratis now delivers a 54,038 per cent ROI while Augur delivers a 2,720 per cent ROI.

However, it can still be a risky investment. According to Emma Channing, general counsel at The Argon Group, ICOs are not widely successful. Only a few companies that offer ICO tokens will raise the money necessary to create a quality cryptocurrency. So, if a company cannot raise enough funds to develop a cryptocurrency that people would actually want to use, then you might not see any return on your investment.

“The froth and the attention around ICOs is masking the fact that it’s actually a very hard way to raise money,” Channing says.

Which ICO you choose to invest in will take plenty of consideration and research. It is important that you explore your options to make an informed decision about the cryptocurrency in which you choose to invest. Make the right choice, and you could be purchasing tokens for the next Bitcoin or Ethereum, and see a huge return on your investment.

By the end of this year, it is estimated that ICO token sales will top $4 billion. Now is the time to consider investing in an ICO campaign that could net you a return on investment worth millions.


ico, cryptocurrency

The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.

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