This is what Initial Coin Offerings or ICO'S as they are known are born, read on to find out more.
An Initial Coin Offering (ICO) or Token Generation Event (TGE) is a new fundraising tool from the cryptocurrency realm.
In some ways, ICOs and TGEs are like a crowdfunding campaign, but instead of offering a product or shares of equity in a startup, companies offer “coins” (for ICOs) or “tokens” (for TGEs), which allow their buyers to access blockchain-based software services.
Rather than pitch their service to a venture capitalist, programmers may host a TGE and sell a fixed number of their tokens to the open market (usually in exchange for Bitcoin or Ethereum) to fund their idea.
Consumers buy the tokens with the hope that, over time, the software or service will become widely used and increase the token’s value.
This route is especially popular for companies that aim to create decentralized platforms because, by definition, no one owns these platforms or directly profits from them.
Nearly $2.3 billion has been raised to date in ICOs, with the large majority of that taking place in the first half of 2017 ($800 million in Q2 2017).
So as you can see there is a lot of capital going into these as everyone is looking to emulate the vast profits of those who bought into Bitcoin in the early days. Whether they will or not is something we must wait for but the early signs with a lot of these are very good.
Personally I love Bitcoin although I am also buying into Etherium as well and maybe a little later I'll buy some Litcoin, simply to spread the risk. I think it will be an interesting ride.
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