ICOs are the newest hot shit in the crypto universe. The Initial Coin Offering (ICO) has become an incredibly effective instrument for project financing for startups. The Crypto Financing in London was one of the first conferences that were almost exclusively about ICO. The Berlin author and entrepreneur Aaron Koenig was there and reported on it for us.
Crypto Financing, which took place on July 7th in London, was the first conference of its kind in Europe. Similar to the Token Summit in New York in May, the focus was exclusively on token sales and initial coin offerings. Around 300 participants came together in the Co-Working Space Level 39 in Canary Wharf. From the 39th floor of the highest skyscraper in the district, there was a great view down to the towers of the large banks in the area and the City of London. And otherwise, the conference organized by Blockchain News publisher Richard Kastelein offered interesting insights into this new phenomenon that has infected the business world virally.
Initial Coin Offerings are an interesting new opportunity to start Finance ups. You don’t have to give company shares to venture capitalists or business angels. Instead, investors receive digital “tokens” that can later be used to use the company’s services. Therefore, platforms for mining cryptocurrencies are gaining momentum and popularity, one of the best platforms for farming is biswap, you can learn more about the biswap price here. The tokens can already be traded on crypto exchanges such as Bittrex or Poloniex. Many have already made considerable profits with ICOs.
In addition to individual presentations and panels, there were a large number of ICO pitches at Crypto Financing, by no means only from the crypto and fintech scene. Start-ups from the fields of artificial intelligence, robotics, or 3D printing have also discovered the ICO for themselves.
Three-digit million amounts in minutes
The name Initial Coin Offering has become established because it sounds so nice like an initial public offering, that is, an IPO. But the tokens offered are rarely real crypto coins with their own blockchains, such as Bitcoin, Litecoin, or Dash. Most of the digital tokens are based on the Ethereum blockchain, others on the Bitcoin-based Omni protocol or BitShares.
The first “ICOs”, which were not called that back then, were those of Mastercoin in July 2013 and Safecoin in April 2014, both of which were based on the Bitcoin blockchain. Things really got going with the Ethereum ICO in July 2014. At that time, Vitalik Buterin’s team was able to collect around 14 million US dollars in just a few weeks. Those who entered at the issue price of around 30 cents can look forward to splendid profits: Today the ether is over 200 dollars!
Ethereum’s smart contracts make it easier for everyone to carry out an ICO themselves. With the ERC 20, a separate standard for issuing tokens has even been developed. Lately, one ICO record has been chasing the next, almost all Ethereum-based. Some start-ups made hundreds of millions within minutes – without having much more to show than a whitepaper with an idea.
Bancor: A scandalous amount of money
One of the most successful ICOs of 2017 was Bancor from Israel. You have collected 150 million US dollars for a “Smart Token” protocol with which you can deposit your new tokens with established crypto coins. Eyal Hertzog, one of the Bancor founders, reported on their ICO in London. It was discussed very controversially, among other things because Bancor had changed the rules during the ongoing ICO. Eyal gave an interesting insight into the challenges one is faced with at an ICO.
On the one hand, they wanted to give everyone the opportunity to invest in their tokens. Many tokens that had a fixed limit were sold out after a short time, which caused a lot of frustration among potential buyers. Only so-called scalpers who bought large quantities of tokens early on (e.g. by paying very high transaction fees) and then selling them at inflated prices were able to benefit.
On the other hand, an ICO with no upper limit appears greedy. One wonders why an early-stage company needs $ 150 million. Many venture capitalists believe that having too much money makes start-up entrepreneurs fat and lazy. Therefore, they stagger their investments, for each round you have to prove that you have met certain milestones.
Behind every successful ICO are … Grandmas from China!
ICOs are a very new phenomenon, so many things are developed according to the “trial and error” principle. There are still no fixed rules; ICOs operate in a legal gray area. As with many conferences, there was also a panel on legal and regulatory aspects at Crypto Financing. Usually, these are the panels that I find the most boring. But this time everything was different.
While some of the panelists were in favor of close cooperation with the authorities, Jane Zhang from Skyledger in Shanghai made a fiery plea against any regulation. To the applause of the audience, she advocated that people should invest their money freely, even in nonsensical projects. “People have a right to be stupid,” said Jane.
After her controversial and acclaimed statements on the regulation panel, she also gave a talk on ICOs in China and why they are in the realm of the middle work so well. “Gambling is very popular in China,” said Jane. “If people make money with it, great. And if they lose money, at least they have had fun. ”According to Jane Zhang, it is the“ Chinese grandmas ”who are behind the successful ICOs. You have saved a lot of money and love to play with it. With her company, she has specialized in bringing ICOs to the Chinese market.
Jane was apparently not just the start of the conference for me. After her lecture, she was surrounded by several men who towered over her almost twice as much. I also had a great chat with her and I think we will put some exciting projects together in the future.
At the conference, it was largely agreed that the current ICO -the bubble will burst soon. But nobody knows exactly when. Everyone wants to place their ICO before the boom ends. ICO platforms, consultants, and specialist magazines are sprouting up like mushrooms. Let’s see how many of them will still exist in the next year. But although most speakers and panelists expect a market correction, they were of the opinion that ICOs will become increasingly important as a means of corporate financing in the future.