The Initial Coin Offerings (ICOs) has become such a massive phenomenon in the recent years. In its early stages, if you told any startup company that using an ICO could potentially raise millions of dollars within seconds or any investor that ICOs could give you significant percentages in returns within a few years, then you would have been greeted with dubiousness.
ICO fundings have seen a considerable increase from 2016 to 2018. It was around US$ 96 million in 2016, increased to around US$ 3.2 billion in October 2017 and sat at US$ 6.3 billion in the first quarter of 2018.
The nascency of ICOs
The whitepaper, by J.R. Willett, titled “The Second Bitcoin White Paper” marks the ICOs first steps. People often call him the “Father of ICOs”.
It states that you can utilise the bitcoin network as a protocol layer. We can then create new currency layers with new guidelines on top of this protocol layer. The new protocol layer can supply initial funds to employ developers to build software that can implement these new protocols.
J.R. Willett launched the first ICO named Mastercoin in 2013. Mastercoin, now known as Omni, was assembled on the Bitcoin blockchain. It managed to raise over US$ 5 million.
ICOs became popular when Ethereum entered the market. The ICOs in 2014 raised over US$ 18 million via crowdsales.
Other projects began to launch their ICOs in the Ethereum blockchain once the smart contracts and DAOs started to kick in. Projects like Bancor and Tezos soon overtook the US$ 18 million ICOs of Ethereum. Bancor and Tezos raised over US$ 153 million and US$ 232 million respectively.
The largest ICO of 2018, at the time of writing, is Telegram ICO which raised about US$ 1.7 billion.
The evolution of ICOs
ICOs in 2017 was tremendously successful. A report in August 2017 stated that ICO fundings had overtaken the early stages of venture capital fundings. Since then, ICOs have even evolved to take on more traditional markets.
The venture capital company, Blockchain Capital, launched an ICO for a token as security and became the first venture capital company to do so. ICOs were usually limited to startups before this.
The Las Vegas, Nevada based esports betting company, Unikrn, launched their token UnikoinGold and raised over US$ 15 million. Big-time investors like Mark Cuban backed the token.
ICOs haven’t strayed away in 2018 either. Google announced that the company would no longer allow ads for cryptocurrencies and related content from June 2018.
The world’s first crypto marketing and automation platform, Momentum, announced to the public about the launch of their own ICO at April 23, 2018.
As of March 2018, China and South Korea have issued a ban on ICO with the latter announcing to revoke the ban soon.