Cryptocurrencies are the new gold mine in the economic world. With the success of the first-ever cryptocoin, every participant in the financial market seems to be looking to get their hands on one or more of these financial assets. Cryptocurrency is a digital money with real economic worth that can be used to purchase other financial assets/any item with financial value. This online money doesn't exist in a physical form and it is only traded in a digital space. Bitcoin is the first-ever cryptocoin that was created and ever since its birth into the economic world, it has seen its value rise exponentially. Its current value has experienced a price change of more than 3000% of the initial price, this is a ridiculously high return on investment.
The huge success of Bitcoin has inspired the creation of many other cryptocurrencies. This new crypto cash usually has a distinct feature and value from other types of cryptocurrency, plus they are generally known as Altcoins. Altcoins are alternatives to Bitcoin and there exist several hundreds of them, the most popular ones include; Ethereum, Litecoin, Ripple, etc. The value gap between altcoins and Bitcoin is a very large one. On Nov 9, 2020, a unit of Bitcoin was valued at $15 385 and the unit price of the most valuable altcoin, Ethereum, was valued at approximately $450.
It is not a surprise that the cryptocurrency world is constantly increasing in size, with the new creation of new tradable cryptocoins and the influx of traders into this bountiful space. Initial Coin Offering, otherwise known as ICO, was made a reality due to this evolution experienced by the financial world. An ICO is similar to an initial public offering/stock market launch but now instead of shares, it is a cryptocurrency that is being sold. Most of the time it is done as a means for raising funds, especially by companies who are looking to create a new app, service, or coin. These companies' tokens are offered to the public at a relatively cheap rate which is believed to increase in the near future.
Interested investors that purchase this digital cash that is issued by the company can benefit when the coin increases in value. The coin, in some cases, can also serve as a special means of accessing the product or service provided by the company. Successful ICOs are highly rewarding, you can get as high as 1000% of ROI in a short time frame. However, ICO enthusiasts should be wary that ICO is not just all rainbows and sunshine, there are dark clouds that loom over the concept. Since the creation of blockchain-backed tokens is quite easy as of now, and numerous platforms can help create these tokens in a matter of seconds.
Various ICOs have been fraudulent in the past, where the company just made away with the money of their investors. Since unlike IPOs, ICOs are not regulated by any governing body, there's a higher probability of investors being scammed. Plus, not all ICOs have been successful, so as much as it's easy to gain from it, it is also that easy to lose from it. Interested investors in ICOs should do in-depth research into any new ICO before they even decide whether to invest their money.