Why doesn’t cryptocurrency projects use the same funding methods as traditional businesses? Would it not have given them a more significant foothold in an already established consumer market? There are many advantages to an ICO, and they are closely linked to the benefits that you automatically get with the blockchain.
SECURED BY THE BLOCKCHAIN NETWORK
For many, it’s challenging to get into just how a blockchain works. It’s also not particularly strange, given that you are dealing with an entirely abstract concept. The most important feature of a blockchain is that it runs a protocol that cannot be tampered with. It also means that blockchains, from a data security perspective, are virtually watertight.
One can say this on the basis of the public transaction ledger; all blockchains are running. Think of the main book as an Excel sheet listing all the transactions that have ever been completed on the block. They are confirmed by consensus on a decentralized network and can not be changed.
An ICO is running with this same technology, either with its new blockchain or on top of an existing one, like Ethereum or Neo. The worldwide network of users secures smart contracts, and when transactions are verified, they can not be changed. All new blocks on a blockchain point back to previous blocks, and it is impossible to break the sequencing.
In other words, your transaction on investment in the project, as well as the project’s promise of the number of certificates of worth, will be added to you in the blockchain sequence. It is locked to the main book and programmed to be processed no matter what happens. For an attacker to change this contract, he or she must have hacked the entire network of nodes that confirmed the transaction. This is, in principle, impossible; no one has succeeded so far.
DECENTRALIZED AND GLOBAL
The second most important feature of blockchain technology is that the network that drives the technology is decentralized. This means that there is no central office, such as a bank branch or other centralized entity, which controls the blockchain or the information on it. All the nodes (users) on the network are part of the blockchain, wherever they are, and the transaction headline is public.
So, this is the network you trust when investing in an ICO. Your investment is secured both decentralized and globally. Also, ICO fundraisers have the advantage that anyone from anywhere in the world can participate in them. This is, in other words, something a little different than the diligence you know from the housing team.
You as an investor can choose to invest in projects in Asia, South America or Africa through ICO fundraisers. The location has nothing to say at all. As the collection runs on top of the blockchain, the whole world can contribute and participate in the new project.
This is also a bit of ideology behind the blockchain technology. Some of Satoshi Nakamoto’s motivation was to transfer the power of transaction from central bodies to the community. Most ICO’s continue to the highest degree this way of thinking.
THE POSSIBILITY OF HUGE RETURNS
In addition to the purely technological and ideological, we should not forget the enormous economic potential of ICO investments. With these abilities, you get the opportunity to invest in projects right from the start. Should you be fortunate enough to invest in the next Bitcoin or Ethereum, the return can be enormous.
Keep in mind that here you are investing in an entirely new cryptocurrency. You are thus ahead of the price development – even before the currency units become available to the public on crypto exchanges. See for yourself that you bought shares in Apple before your business was worth anything – or was an early investor in Bitcoin (BTC).
ICO fundraising gives you the opportunity to do this. Then, of course, it should be said that the time that cryptocurrency was still a new industry is over a long time ago. The market is already beginning to saturate, and it becomes increasingly difficult to identify which projects are worth investing in.
Nevertheless, as a crypto investor, you should be aware of how beneficial ICO crowdfundings can be. It’s only a matter of doing thorough research and staying away from the wrong projects.