Whilst it might only feel like a short time ago we were toasting the end of 2017, and most importantly bitcoin at its highest ever price, we are now approaching the end of 2018, so just how has this year been for ICOs?
For those of you not yet familiar with ICOs then first of all let’s answer the question what is an ICO? Basically an ICO is a way of crowdfunding using cryptocurrency, so if a company has a product or an idea which is based on the blockchain then they can run an ICO to gain funding for it in the form of cryptocurrency. People who invest in an ICO will then gain a new token created by the business in exchange for their cryptocurrency. This token will either be for use within the product they have invested in, or they can also wait until the token is put onto an exchange where they can trade it just like any other cryptocurrency.
One important thing to remember with this thought is to run an ICO, the company must have an idea which is using blockchain. It is not simply enough for a company to run an ICO purely because they accept cryptocurrency, as seems to be the case with some organisations. It is imperative that the idea they are launching using blockchain technology.
There are more and more ICOs popping up though as companies begin to realise just how valuable blockchain technology can be. So let’s take a look at some of the facts and figures for 2018.
Firstly the questions on most people’s lips would be ‘how much money have ICOs raised in 2018?’. Unfortunately this is a very difficult question to answer accurately, and it is can only be estimated at somewhere between $11 billion and $22 billion.
The reason for this huge discrepancy in figures is that currently ICO issuers are not required to submit any figures regarding their returns, so this results in a lot of guesswork. There is also the fact that the way in which ICOs gain their funding is evolving, so rather than crowdfunding in the traditional sense, some tokens are offered privately to investors instead of being issued the way in which ICOs were initially known for.
If you also add in the ever changing prices of cryptocurrency into the above equation then you can see why the above is extremely difficult to measure completely accurately.
So rather than looking at the figures in terms of the amount of money raised, which is still rather impressive even if it is not very precise, we can take a look at the number of ICOs in 2018.
A report published by PwC and the Swiss Crypto Valley Association back in June stated that there were in fact by that time already more than twice the amount of ICOs by that time than there were in the whole of 2017!
To dig down a little deeper into these figures the report also stated that the average size of an ICO had almost doubled from $12.8 million to $25.5 million.
This is especially surprising considering during the first half of 2018 cryptocurrencies were going through a turbulent time in terms of value.
Of course, more statistics will be released at the end of the year so we can take a look at things again then, but in short it seems that the second half of 2018 also showed no signs of slowing down.
So what about the future of ICOs? Of course a lot of noise is made about cryptocurrency and what the future holds, with many experts putting in their views whether for or against, but there are less quotes out there about cryptocurrency.
Whereas in this article we looked a little bit at the statistics of ICOs, in reality we will have to wait another few years before we can really judge how successful individual ICOs have been. After all, the real question that needs to be asked is whether or not the ICO resulted in a product or service that uses blockchain and whether or not blockchain adds real value to it.
It seems though that the number of ICOs being launched will show no signs of slowing down, particularly as more and more uses are being found for blockchain as companies and industries begin to realise just how much this great technology can do for them.
About the Author:
Ian Scarffe is a serial entrepreneur, investor, key opinion leader and Blockchain consultant with business experience from around the world.
As a leading entrepreneur, Ian is on a personal mission to develop a culture of entrepreneurship, helping startups achieve their full potential as well as helping to expand existing companies.
Ian has founded ‘Binkplus’, a startup incubator in Europe. Ian is an Independent Expert at the European Commission – Horizon 2020
An expert in Startup, Investment, Fintech, Web3 and Blockchain industries. Ian currently consults and advises for a range of multi-million dollar companies.
Ian’s overall mission is to foster a society of economically independent individuals who are engaged citizens, contributing to the improvement of their communities across the world.
Ian Scarffe has written two books to help others:
The Ultimate Guide to Bitcoin and Cryptocurrency 2018 Blockchain Basics 2020
Follow Ian Scarffe: