ICOs or initial coin offerings are one of
the hottest and most controversial topics in the blockchain world.
They are all like crowdfunding on steroids.
To be clear, this topic is covered for educational purposes only,
and absolutely no investment advice.
With blockchain technology, we're creating new coins and tokens now all the time.
And ICO initial coin offering is beating
the next step after what you've seen with Kickstarter and other crowdfunding platforms.
But instead of raising thousands of dollars for a new product,
it's raising often millions of dollars for a new company.
It functions more like an IPO with an initial public offering, but for everybody.
Access from anywhere in the world
and without any regulation or safety net in many jurisdictions today.
While we had 200 ICOs in 2016,
in 2017 over 800 ICOs have
been entered the market and raised a combined over two billion dollars in capital.
The model originally started with Bitcoin mining companies that were
raising funds from their community to build more and better mining facilitators,
and they raised off the millions of dollars within minutes.
So the model became now a standard nearly for funding new enterprises.
So what is an initial coin offering or ICO?
It is an unregulated means by which funds are raised for new blockchain ventures.
An initial coin offering is used by startups to bypass
the rigorous and regulated capital
raising process required by venture capitalists or banks.
There are now a popular way to raise money for a new cryptocurrency or blockchain project
by distributing a percentage of
the initial coin supply among the early supporters and backers.
ICO solve the problem of initial coin distribution
as supply goes to whoever has given money for the project development.
But they are also highly controversial,
and there are lots and lots of scams out there today.
On the other hand, many successful cryptocurrencies and blockchains ventures were
funded using this model, including Ethereum.
It is really a legal grazer,
depending on the jurisdiction you are,
they can be legal,
kind of legal, or not legal at all.
ICOs have properties resembling stocks.
But new projects often try to get around this,
like Ethereum, they have classified their ICO as software pre-sales.
The largest ICOs today,
the four 2007 include companies like Teazles.
They're creating a crypto infrastructure and really a new blockchain.
They raised in 2017 over $232 million equivalents in bitcoin and ethereum.
But in November 2017 they are in legal battle with investors in the US around disclosure,
and there are conflicts within the organization between the foundation in Switzerland and
the developers in the US that might impact the success of the old enterprise.
Other companies that have raised
more than a $100 million dollars include FileCoin, E Source,
and Bankera crypto exchange.
The goal again with the section on ICOs is really to educate you about
a new trend and a fascinating new tool.
And you will find more on why ICOs is fund raising,
community building, and even marketing to entering the market.
But again, this is absolutely not investment advice,
but really for educational purposes.
With this session, you are now familiar with
the key technology terms used when discussing blockchain technology.
And you're ready for diving into the applications of the technology today and tomorrow.
Thank you for going through this challenging section with me.
Can you already see how blockchain technology
will likely impact your life and your community?