Initial Coin Offering: Risks & Opportunity 

Tuesday 22nd Mar 2022 |

There was a time when we had to opt for less-viable alternatives while dealing with the conventional financial system.  Do you remember it?  

The process was extraordinarily time-taking and offered virtually no benefits other than us doing the transaction procedure properly.  

While the traditional process has become much more sublime these days, the issue of time consumption is still quite prominent to this date.  So, what’s the solution?  The implementation of Cryptocurrency, of course. It’s fast, agile, secure, and offers almost each and every benefit as the traditional transaction system.  Besides, it can also help your organization in getting an early-stage investment to secure your budget through ICO.  But, what is it really? How can it be beneficial for your business? Are there any other risks associated with it?  Keep reading to find out all about it.  

Initial Coin Offering (ICO) – A Brief Introduction  

ICO, or Initial Coin Offering, in essence, is a crypto event where you can raise your budget massively without wasting too many resources.  

Here’s how it works.  

Let’s say you have created a start-up and want to improve your budget structure to some extent. For that, you have created a brand new cryptocurrency and are trying to sell it through an online event. This is known as an Initial Coin Offering.  

Now, you can opt for three different strategies while designing the proceeding -  

  • You can keep a fixed amount of price and token count for the event.  
  • You may opt for a variable price while keeping the token count at a fixed position.  
  • The token count is marked as a variable while the price is fixed.  

You have to choose any one amongst these options depending on your strategy as a whole. If you need any kind of assistance, you can also take the help of the Top Affiliate Networks. 

Benefits Of ICO  

Whether you believe it or not, the benefits of an ICO event go far and beyond helping your organizational budget. Here’s what you need to know about it.  

  • Anyone Can Invest: With an ICO, almost anyone in the world can buy a token or invest in the segment of Cryptocurrency. Besides, there are no holds barred when it comes to having a minimal budget allocation. Hence, even if you don’t have a fixed net worth, you can still buy tokens. Most of the purchases are going to be anonymous in this aspect. Therefore, there’s no need to worry about identity theft as well.  
  • Premium Liquidity: Due to their massive popularity, cryptocurrencies have become much more liquid than they were before. For example, you can buy almost anything you want depending on your budget and the price of the product. The amount of currency you are buying from an ICO event can, indeed, be used for purchases as well. Hence, with it, you are still getting the sense of premium liquidity.  
  • Global Selling: Usually, an ICO event is held in a remote geographic location – and it makes quite a lot of sense as well. However, if you are capable enough, you can also go big and get a global reach instead. It will help you attract more consumers and earn a substantial amount of money after the sales procedure is completed. However, you may have to plan the whole scenario much more profoundly than before. 

Risks Of ICO  

ICO, being a part of the Cryptocurrency segment, can be pretty risky. Here’s how it may affect your business if you are not careful enough -  

  • The value of the tokens can be somewhat speculative.  
  • It does not have any regulatory protection.  
  • Learning about an ICO event entirely is pretty challenging.  
  • It might end up being a fraudulent event.  
  • Unstable investment can get devalued pretty instantly.  
  • Uncertain regulatory difference between security and utility tokens.  
  • Little to no data is available for the token holders.  

Aside from this, the overall interest in ICO has been decreasing since 2018. Hence, make sure to be as careful as possible before investing in this area properly.  

Conclusion  

If you are seeking a way to fund your business, holding an Initial Coin Offering event will be ideal for you. Nonetheless, it requires quite a lot of planning to receive the success you’re hoping for. Besides, you’ll have to be a little bit more careful than usual to make sure that your money isn’t going down the drain.  

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