2017 was definitely a record year for country offices: a flat equivalent of $ 4 billion was raised and the number of successful tokens investments have increased to a few hundred people in the world. Yet in the same year, traditional IPOs would have yielded $ 188.8 billion in total, or 1,624 transactions, according to E & Y IPO's global trend report. In the second quarter, 2,645 venture capital transactions totaled $ 42 billion.
ICOs collected less than 2% of the overall proceeds of IPOs, but ICOs are not IPOs and not venture capital operations. days. Why?
In a year, only IFA products increased by nearly 40, from $ 96.3 million in 2016. In 2014-2015, the amount was microscopic. According to ICObench, more than 180 new ICOs are expected to be launched in 2018.
It would be superficial and arrogant to explain the explosion of the ICO only by the desire of the newly crypto-miners rich to invest their new digital reevaluated. active in something productive and protect themselves against volatility. That may be the case, but that does not explain the whole case. In fact, there are three root causes of the success of the ICO
The Good Reason
ICO and cryptocurrencies exploit fundamental flaws of traditional funding methodologies. They bring justice and equality to projects from disadvantaged areas and sectors, and do not deprive the founders of doing so.
Traditional financing is geared towards an intermediary, not a creator. risks of this intermediary, not the investor or the founder while maximizing the returns from the intermediary. It works fundamentally around the principle of Matthew 12:15 – "Whoever has received more, and they will have an abundance." Those who do not have it, even what they have, will be taken away from them. " , it takes money to get more money.
Conventional financing is much harder to achieve for those who live outside cities. They will not even consider financing a company that is not domiciled in the US Venture capitalists normally claim a substantial share of equity in exchange for money, so investors, regardless of their share, greatly influence the decision-making of the founding team, and not always for good.
these problems were crowdfunding platforms.OICs have taken a step closer to reducing the friction behind the crowdfunding, in the inte
Obtaining venture capital financing, not to mention the IPO themselves of product development, marketing and promotion . Compliance, legal and due diligence procedures make the Auxiliary Project to secure project funds as complicated or even more complicated than launching the product itself.
This is not the only reason for the triumph of ICO.
Despite the wet dreams of cyber-anarchists, states will go nowhere soon, and the legal standards for the ICO have not appeared out of nowhere. As they say in the military, service regulations are written in the blood – of those who died to teach a lesson to others. Stock exchanges and financial markets are regulated not only to keep lay people. This is because most scams, frauds and accidents have already occurred there. Sooner or later, ICOs will be regulated. And we should rather be a part of the solution to this problem, not the problem itself.
The ugly reason
In the ideal post-Blockchain intelligent contract, autonomous, crypto-anarchic world, imagined by techies, we should all be singing "Hosannas" now, praising human progress and l & # 39; ingenuity.
But we would not be human if a life-changing invention was not used to cheat, defraud and steal. Cryptocurrencies and, subsequently, ICOs are no exception, and there is and there will always be fraud, of course. Traditional financing does not necessarily provide better investor protection. Even the strictest due diligence does not guarantee fraud. Crypto investment systems are particularly vulnerable due to anonymity.
The ICO segment is still in its infancy, but this baby is gaining weight. Infantile diseases are numerous. First of all, the crypto world has a serious reputation problem. The SEC calls for extreme caution when investing in ICOs. To gain trust, we must start from the inside and establish it first with the community.
Even in the absence of government regulations, a self-regulatory framework of ICOs will inevitably emerge. In addition, to avoid over-regulation and unnecessary government intervention, it is essential that the community continues to better defend itself than any regulator. What to Expect in 2018
In the coming year, IFAs will offer more projects to serve the community in general, without being more limited to the development of the community. Blockchain infrastructure, payments and speculative trading. It will be less focused on purely financial technology. In 2017, we have already seen examples of Blockchain Notary, Blockchain Real Estate Investments, Loyalty Programs, Supply Chain Management, Intellectual Property Rights Management and others. applications in the real world. We will see more of this in 2018.
– By Sergi Dromo
Sergi Dromo is a cyber pessimist, a techie philosopher and an unorthodox thinker.