Initial Coin Offering: Why the IPO of cryptocurrencies is suddenly popular

Initial Coin Offering: Why the IPO of cryptocurrencies is suddenly popular

It is the buzz phrase of the decade and holds all the heady promise of those early dot-com boom days of the 1990s. Initial Coin Offerings (ICO) are in some ways the cryptocurrency alternative to an Initial Public Offering and they are gaining ground as blockchain startups turn to cryptocurrencies to capitalise their business.

Essentially, any blockchain startup wanting to do an ICO needs to create and issue their own digital currency that can be used within the company’s own ecosystem to buy products or services on offer or as an investment that can be sold once the token achieve higher values. Smart contracts platform Ethereum is a good example. Its 2014 ICO raised over $18 million in Bitcoins, making its tokens – called ethers – worth $0.40 at the time. By 2016, ether value had skyrocketed to $14, with a market capitalisation of over $1 billion.

Eric Ross, Director of Technology at Loci, which is pursuing its own ICO, says that ICOs or token sales, have become the new gold rush within technology, but they are fairly limited to the blockchain technology space. “Blockchain has tremendous potential to revolutionise many technology spaces, but it has always been difficult to get funding through traditional routes,” he says.

Read an interview with the author of ‘Blockchain For Dummies’ and download the first chapter as a PDF - Blockchain For Dummies: What you really need to know


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Bianca Wright

Bianca Wright is a UK-based freelance business and technology writer, who has written for publications in the UK, the US, Australia and South Africa. She holds an MPhil in science and technology journalism and a DPhil in Media Studies.

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