ICOs Crowdfunding

The devil lies in the detail.

This is the most recent actual implementation of cryptos. This exerpt is the contribution of Complete guide , If you have been paying any attention to the crypto space at all the past few months you will have heard the term ICO (Initial Coin Offering) being thrown around a lot. Whilst there are many legitimate ICOs which offer fair compensation to their investors and have a real chance of disrupting industries and huge ROI there are many more which mislead, overpromise and some which are simply pyramid schemes or rebranded Bitcoin clones with no real value.
danger for wealth creation in bitcoin investment

Better than Bitcoin?

On this front Bitcoin and other cryptos are no different to FIAT currencies except that they are the first truly global currency and therefore not dependent on any one country’s money supply or economic health. Whilst most cryptocurrencies are either very volatile or tethered to a FIAT currency i.e Tether it is foreseeable that this volatility decreases as the market cap increases as the trading volume would be unlikely to increase proportionally if a large part is being used as a currency.

Decentralised Services

Now come the really interesting use cases and where the future of cryptos lie, in my opinion. In much the same way AirBnb disrupted the accommodation industry by decentralising the industry away from a a small number of hotels and bnbs to a large number of individuals, blockchain looks to decentralise everything else.

The Crypto Currency crazy pose a lot of unforeseen danger specially for an experienced investor. Get all the information about the most common scams in relation to tokens sales. Beware and don’t lose your digital Assets!

Mt. Gox hacks

Mt. Gox and Other Exchange Hacks Wild price swings occurred during a brief split in the blockchain (when two sets of ledgers disagree with each other), during which time the exchange Mt. Gox halted trading causing a sharp sell off. US Government regulators started to take notice when Financial Crimes Enforcement Network (FinCEN) declared miners were Money Service Businesses (MSBs) and therefore liable to the same regulations. In April, 2013 Mt. Gox had trouble processing the transaction volumes causing delays and more wild price swings. Only a month later FinCEN seized accounts associated with Mt. Gox as it hadn’t registered as a money transmitter. Things finally imploded in February, 2014 when Mt. Gox filed for bankruptcy protection after 744,000 Bitcoins were stolen.

Etherum and Dao.

The DAO hack One of the first Dapps built on the Ethereum blockchain was a Decentralized Autonomous Organisation or the DAO. It raised $150 million in a crowdfunding campaign but in June 2016 $50 million was stolen by an anonymouse hacker. It was suggested that the community agree to reverse the transactions and create what is known as a hard fork (when two sets of ledgers disagree with each other and instead of overwriting each other decide to continue on as separate groups). This was extremely controversial as it went against one of the central tenants of “immutability”. The Ethereum team went ahead and reversed the transactions causing a split into Ethereum and Ethereum classic which continues to hold substantial value today. A further two hard forks were required at the end of the year due to more hacking attempts. The lesson to be learnt from this is that it is very difficult to write Dapps and Smart Contracts as even a small bug in the code might be exploited to steal a large amount of money and destroy trust. Ethereum continues trying to improve security and prevent this from happening in the future.

ICO's mania

ICO Mania with the appearance of smart contracts and the popularity of Ethereum a wave of ICOs appeared around June 2017. A lot of money could be made by selecting and investing in the right ones. However it was very risky due to a complete lack of any regulation and zero accountability. Initially a fixed number of tokens were offered at a fixed price. The mania around these ICOs created much more demand than there was supply so people could expect an immediate return after the ICO ended. However many companies started getting greedy and offered open ended ICOs with no hard limit on the amount of investment. Coupled with the failure of a few high profile ICOs people became disillusioned with ICOs which has calmed down the space a bit. The SEC and other governing bodies are looking to regulate ICOs. Some cryptos are taking the initiative, such as NEM through COMSA, by self regulating ICOs to increase trust in the system and ensure high quality projects.

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