Revolutionary Way To Get Funded: ICO Roundups (Infographic)
15-10-2018, 21:08 311
Copyright on text and image: btxchange.io
Advantages And Disadvantages Of ICOs
Initial Coin Offerings (ICOs) are becoming increasingly popular with every passing day, and for a good reason.
They are available to everyone, and there’s a strong chance that you can purchase tokens at a low price and earn a substantial profit over time. That said, ICOs do come with a certain degree of risk. You can quickly check what you can gain and lose by taking a look at the handy infographic provided by BTXchange.
In this post, we’ll take a look at the main pros and cons of ICOs.
Advantages of ICOs
ICOs are beneficial to both cryptocurrency startups and the general public.
Because they are accessible to everyone, startups can acquire funds in an entirely decentralized manner, with much less paperwork and regulations than traditional models of funding. What’s more, investors from every corner of the world can participate.
The other advantage is that funders can raise funds without diluting equity.
ICOs are beneficial for the average Jane, too. ICO tokens can be purchased cheaply, and eventually, many crypto exchanges will list them among their exchange currencies.
If the project in which you’ve invested is successful, you can earn a substantial profit. For instance, the value of Ethereum tokens has risen to an unbelievable value. Value gains in excess of 100% within a few months are fairly common, regardless of whether the projects are completed in that timeframe or not.
Another benefit is that ICOs gives people a chance to shape the future of cryptocurrency ecosystem.
Disadvantages Of ICOs
Startup projects run ICOs. While investors can get a fair idea about the viability of the project from the information provided to them by the project team, there’s no guarantee that the project will go as planned. If it is not completed or adopted by mainstream users, you can lose your investment.
The risk of being scammed is also real and ever-present in ICOs. There are already several well-known cases where people lost money, for example, the Giza scam. This startup raised $2.4 million in a fake ICO from more than 1K investors.
To conclude, ICO investments are speculative investments. You can earn a lot of money but also lose big time. Therefore, make sure you bet on a good horse.