ICOs – An Innovative Way Of Fundraising

Through the years, many innovative ways of raising money emerged and the boom that cryptocurrencies made in the last decade meant that a novel way of crowdfunding for startups was created. Initial Coin Offerings (ICOs) are the latest trend for startups to raise money and that is the main topic of today’s article.

ICOs are sources of capital for startup companies, and are used mainly because this way startups can avoid costs of regulatory compliances and intermediaries. Essentially, with ICOs you have several investors buying your cryptocurrency, and in doing so they fund your startup in hopes of getting a return investment in the future.

As of February 2018, BTXchange states that the most used blockchain platform for ICOs with more than 80% of the market share is Ethereum. According to a research by Cointelegraph, a site generalized in cryptocurrency news, the Ethereum network ICOs have resulted in phishing, Ponzi schemes, and other scams, which accounts for around 10% of ICOs.

2017 saw ICOs raise 40 times as much capital as they had in 2016, which shows the astonishing growth that ICOs are experiencing. The capital they have raised is lower than the one raised by its main counterpart called IPOs, or initial public offerings.

The downside that ICOs have is the potential for making scams.

  • In February 2018, Crypto startup Giza raised $2.4 million (2,100 ether) in a fake ICO, which engaged more than 1,000 investors.
  • The US Securities and Exchange Commission has frozen PlexCoin’s $15 million gathered in the ICO in 2017 for advertising astronomically huge return of 1,354% which couldn’t be delivered.
  • In 2017, scammers behind Benebit blockchain token system with faked team photos collected money during ICO and walked away with $2.7M – $4M.

Take a look at the infographic created by BTXchange.io to find out more information about ICOs, and what is expected from them.

 

ICOs infographic image

Is Bitcoin Actually Useful?

It’s hard to look at trending investments in 2018 without seeing news about bitcoin and other cryptocurrencies. Increasingly viewed as commodities, these digital currencies made serious waves in 2017. Bitcoin nearly hit $20,000 in value, undoubtedly allowing a lot of early investors to cash out with serious gains. And though it has since declined fairly significantly, the 2017 surge is still on people’s minds. Everyone from amateur investors to serious hedge fund managers is at least keeping an eye on the crypto markets.

Is Bitcoin Actually Useful? - Bitcoin image

The question we have at this point, and the one anyone dabbling in cryptocurrency ought to think about, is whether it’s actually useful. Bitcoin was originally designed as an alternative currency, meant to take over as a secure, anonymous means of conducting basic transactions. This hasn’t happened yet, and in fact we’re nowhere near that point. But there are some ways in which bitcoin can be useful.

Online Retail Shopping

The slowest area for bitcoin adoption has been in-person retail. While there are certainly brick-and-mortar restaurants, coffee shops, and stores that will accept bitcoin payments in person, they tend to be few and far between, and you almost have to go out of your way to make use of them. Online, however, some of the biggest retailers in operation have begun to accept crypto payments. Overstock, eGifter, Shopify, and numerous travel-related platforms (like Expedia and CheapAir) are among those usually included on the list.

Bitcoin Debit Cards

This can almost seem a little bit unnecessary, but if you’re someone who’s determined to make practical use of bitcoin and you don’t have enough opportunities to do so, you can actually load up a debit card with cryptocurrency. It then functions just like any other debit card (meaning you can use it just about anywhere), but instead of being backed by a checking account, it’s simply loaded up with a dollar value backed by your bitcoin.

Gaming & Betting

There’s actually a lot of competition between online gaming and betting platforms as they attempt to find different ways to appeal to players. There are several factors that must be considered when choosing a platform to engage in real money gaming activity with, and increasingly one such factor is payment methods. Many people prefer more secure and anonymous means of making deposits, and for this reason more and more of these sites are accepting bitcoin payments. In fact, some online casino platforms now exclusively take bitcoin.

Short Term Potential

This won’t help you today or tomorrow, but it’s also worth noting that bitcoin advocates haven’t given up on its potential to replace ordinary currency. Only a few months ago a man who’s already made millions in bitcoin predicted that it will replace fiat currency in five years’ time. That may be a little bit optimistic, but there’s an argument to be made for exploring cryptocurrency now because it’s probably going to get at least somewhat more useful in day-to-day transactions.

The Incredible Growth of Fintech (infographic)

The name Fintech was coined by merging two words: finance and technology. With the evolution of every aspect of society, it wasn’t a surprise that modern technology would find its way in finance as well. The latest technological breakthroughs are used in banking, investing and cryptocurrencies.

The financial crisis in 2008 opened the doors for novel ways of providing financial services. The investment in Fintech in the same year was $930 million and in the next 7 years it increased to more than $22 billion. This shows the huge growth of the new financial industry which specializes in areas such as insurance, trading, and risk management.
The major characteristic which attracts customers is that the products and services that these firms offer are cheaper and more innovate that those by traditional banks.

One of the innovations is that many of the companies have shown interest in cryptocurrencies in the past years. Fintech uses software because it is mainly based of digital information. In turn, this makes it vulnerable to hacking attacks, which is why the leading companies opted to using cloud computing as a new solution for data security. Such example is Expedia which was one of the first to adopt Bitcoin when it partnered with Affirm.

Even though Fintech companies experience a rapid growth, it is unlikely that in the foreseeable future they will be able to “kill off” traditional banks. At the very least, the banks are trying to stay in touch with modern technologies, despite their rigid structures.
Take a look at the infographic below which has many statistics that will help you understand the incredible growth of Fintech.

Growth of fintech infographic