SEPTEMBER 20178By Kunal Nandwani, Founder & CEO, uTrade SolutionsA FinTech company providing multi-asset full suite trading platform, low latency algos engine, risk management and DMA FIX gateway, uTrade's products is widely used by global financial institutionsIN MY OPINIONHOW ICOs BECAME THE KING OF It wasn't very long ago that Bitcoin and other similar crypto-currencies disrupted the financial ecosystem. It surpassed the US Dollar, other fiat currencies and even gold. Pretty soon it earned the title of "digital gold" and broad the fame, and infamy that would inevitably comes with such a moniker. Similarly, other crypto-currencies like Ethereum tripled in value and Ripple skyrocketed. The whole ecosystem of crypto-currencies exploded with their total market capitalization rocketing past US$100 billion, as this blog was written. Large Investment Banks like Goldman Sachs and Fund Managers like Fidelity are taking these currencies seriously nowThis rapid growth also drew attention to a key technology that crypto-currencies rely on - blockchain. People soon realized that blockchain technology could be used for an incredible variety of use cases with companies like IBM, financial institutions and other big players placing big bets on the technology, which we do not agree with, by the way, as decentralisation is lost when institutions use blockchain for running their eco-systems.In 2013, this all let to the creation of the most exciting funding innovation in recent history - the Initial Coin Offering (ICO). Simply put, an ICO is the advance sale of a platform's crypto-currencies or tokens, to be used within their platforms or outside, in advance, to fund the development of their platforms. These tokens can be easily sold and traded at anytime, on all crypto-currency exchanges depending on their demand. So, an ICO is when a company raises money in bitcoin or other crypto-currencies for the technical development of their projects. Please note that these tokens / crypto-currencies are different from securities, and other regulated investment products, so far.Much like the crypto-currencies that fund them, ICOs have experienced exponential growth in 2017 and in the past few months have raised more money than early stage VC funding has, a cool US$1.2billion. Companies like Filecoin, Bancor, Tezos, EOS.io have each raised more than US$150 million in a matter of hours. ICOs so far has proved to be an incredibly successful instrument to raise funds for the development of a new application / platform. These are the Key Reasons, Why ICOs have Enjoyed so Much Success:· There is a willingness among the community to decentralize control, away from large corporations, large internet firms and financial regulations.· Investors are investing very early in the process, hoping to repeat the success of early stage Bitcoin investors who saw it's value rise from a few cents to US$3,000+ within 6 years, creating generational wealth for some investors.·The surplus money people generated from early investments into crypto-currencies, is being re-invested into new crypto-currencies.
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