ICO or Initial Coin Offerings are a great way for cryptocurrencies and their customers to kick-start the currency. They provide all involved parties with certain benefits. For companies, ICOs allow them to get a strong market standing before entering the market in a complete capacity.
For the backers and buyers, ICOs allow them to purchase tokens at a considerably lower price than what would be the average market price when they go on sale. So, they can fruitfully capitalize on the gradual growth and value increase of the crypto coin. In addition to these two benefits, ICOs also provide additional advantages to everyone who is involved. Here they are:
Major Benefits of ICOs
The first advantage and my personal favourite feature of ICOs is that they allow anyone to purchase cryptocurrencies. Unlike equity sales in the US where only adults with a net worth over 1 million Euro are allowed to participate, cryptocurrency ICOs are for everyone. Therefore, both companies and buyers benefit from ICOs by inviting a larger audience.
The second advantage is that ICOs are made worldwide. Since the internet is a global phenomenon, buyers can make purchases from anywhere in the world. This vastly enhances the scope of ICOs and increases their potential market outreach in the long run.
The third benefit is that tokens issued in ICOs are liquid almost as soon as they are issued. Equity shares take approximately 10 years to liquify. However, with tokens there is no such problem and people can buy and sell tokens as fast as the systems can support. This also contributes to overall growth.
The fourth advantage is that ICOs can happen anywhere. Thus, the premium issue price for if you launch in Silicon Valley need not be endured. This makes ICOs cheaper for companies and buyers too.
The fifth benefit is that ICOs offer a decentralized business model which is in many ways more democratic than others. This allows for more fluid functioning of companies and enables dynamic market-oriented growth fostered by diverse decision-making.
Another additional benefit of ICOs which I think is awesome is that they do not need intermediaries. A buyer can simply get tokens for themselves without needing to engage with middlemen and brokers.
How Can You Evaluate and Choose ICOs?
ICOs are a great way for cryptocurrencies to bypass the rigid financial regulatory system in the US. However, this does make them a tad bit unsafe. Some ICOs are legit while others may be fraudulent. It is up to the investor to assess, investigate and comprehend all aspects of any ICO before making an investment decision.