[INFO] Why Do Projects Choose To ICO?

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Fresh Unicorn
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27 Jan 2018, 04:49

Cryptocurrency projects choose to raise funds through an ICO for a number of reasons:

  • Perhaps the most underreported reason is that for some of these projects to succeed it is essential to get many individuals using the token and many developers building on top of the protocol created by the token. ICOs are a great way to do this while also raising funds for development, a win-win. This fact makes an ICO practically a requirement for some coins. Even the best projects must be adept at marketing and telling their story to gain funding and developer adoption; having a good team and a promising white paper (a document which details the goals and plans for a cryptocurrency project) is not enough.
  • ICOs are a low cost fundraising option because they avoid regulatory compliance and other interactions with intermediary financial institutions. This means that projects can keep costs related to launching low. Regulators are taking a closer look at ICOs and this may change, but for now there is no more cost effective way to raise money for a cryptocurrency project.
  • COs can raise funds quickly and save the development team time compared to raising funds through traditional means, like venture capital. While this is arguably both a good and a bad thing, it means that projects have the opportunity to get off the ground quickly which can be important for their momentum and success.

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27 Jan 2018, 10:08

very good article fornewbies and crypto currency trader to explain the ico.

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