Before the completion of the Transcontinental Railroad, much of the promise the Wild West represented was utterly out of reach for most travellers. Why? It cost over $1,000 to get across the country through stagecoaches and wagons. It does not come as a surprise therefore that the operators of these older transportation means would be majorly opposed to rail construction.
On completion, however, the travel costs were slashed to a meagre $150, shortening journeys and removing trade hindrances. The new technology became the backbone of an economic giant.
The ICO Tough Operational Terrain
Cryptocurrencies just like railroads have had a rough start. Their operating landscape has similarly been filed with busts and booms, mishaps and frauds of a different nature that has led to the same result; skepticism. True, there are no religious leaders today crying sacrilege over blockchain technology as they did over the internal combustion train engine, but the anti-digital bias has not been forgiving either.
All the same, the digital currency market has held steady. It has made significant inroads thanks to the conviction its believers have over the technology's ability to shape the human experience positively. Retail transactions via tokens are becoming part and parcel of the retail experience, and soon mass adoption will cease to be a dream but a reality.
The initial coin offering (ICO), the digital industry's fundraising vehicle has probably weathered more turbulence than any other arm of this novel trade. The 2017 ICO boom, for instance, raised over $.5.6 billion. Unfortunately, this year was the Wild West era of ICOs; anyone with an idea and a name would float their dubious ICOs and make millions.
ICOs had very low entry barriers, and according to an Ernst & Young report, over 10 percent of all funds from ICOs in 2017 were stolen. This environment did a lot of harm to the market. Eventually, the U.S. Securities and Exchange Commission (SEC) stepped in, into an autonomous but decentralized currency scene.
The Primary Cause Of Many ICO Failures
In 2018 ICOs raised even more; $21.7 billion, though 25 percent of the funds went to the most significant 10 ICOs. With so much money raised in ICOs in 2018, the deflating statistic was that only a paltry 48 percent of the startups funded were successful. True, the competition was fierce, amongst the existing 2,094 coins, but that was not all that was to be blamed for the poor outcome.
Going by Tokendata statistics, besides the fraud, 142 ICOs failed at the fundraising stage, while 276 of them failed at project delivery. Another 113 others are still struggling and are considered as semi-failed. Most of these ICOs failed due to investor negligence and start-up greed.
These entities simply floated a white paper and garnered millions of bucks from crazed investors who did not take time to ask pertinent business questions. Paul Brody, of Ernst & Young, says:
“We were shocked by the quality of some of the white papers, we saw clear coding errors, and we saw conflicts of interest between the companies issuing tokens and the community of token holders."
He reiterates that low-quality projects were partly responsible for the mass failure and challenges that the ICO market faced, driving down investor confidence.
The Staying Power Of ICOs
The market however quickly adjusted building IEOs and STOs that are making the dreams of digital currency startups come true, albeit with a little more control and centralization. The Binance Launchpad, for instance, has had four successful IEOs on it and Bittrex, Kucoin, Huobi and BitMax are quickly playing catch up.
IEO consulting, promotion and fundraising agencies like Priority Token that became one of the strongest agencies in 2018, are also offering the expertise that startups need for stellar token sales. Good old ICOs are however still a favourite fundraising channel for businesses seeking funding outside the traditional legacy banking system.
The fundraising process has positively impacted the digital currency landscape giving many startups real-world value and application and turning them into global business leaders. Case in point is the EOS ICO that raised over $4 billion in a yearlong coin crowd sale.
EOS’s vision is to build decentralized apps (dapps) a reliable blockchain platform, with ETH’s computing power and BTC's security. Telegram, on the other hand, garnered over $1.7 billion in 2018, when ICOs were much maligned.
The Secret of a Successful ICO
The Telegram ICO was a resounding success because Telegram already had 200+ million active monthly users. The Telegram ICO had excelled in crypto economics, having demand and lacking inflation. Its economic model was also thoroughly mapped out and had been proven since it had a working product. The ICO has widely been viewed as a blueprint of what a successful ICO process should resemble.
The TerraGreen ICO is the new kid on the block with a rating of 4.6 on ICObench and has 10 expert ratings so far. TerraGreen is eliminating the technological, financial and supply bottlenecks in the renewable energy industry that hinder the global creation of renewable energy facilities.
On the STO scene, DESICO rated 4.1 on ICObench is going to provide a security token for retail investors that helps them to invest in promising startups in blockchain tech. Cryptune, on the other hand, is an online payment platform developing a security token that will work as a point of sale feature for consumers and merchants.
Unconventional ICO Projects
ICOs have also given a chance to other non-standard projects like Toyken a product of B.A Toys. Jeremy Buse, the B.A Toys founder, has for years watched the toy retail market transform and sometimes eat itself out of business. The sector’s focus on annual increased revenues rather than profits has brought many a business to a dead end. Case in point; Toys R Us.
Tired of the rat race in the toy retail sector he revised his business model into a toy HODLer model. “We even implemented our own style of inventory management, one that would likely make big financiers, in big business, sick to their stomach," Jeremy says.
Fascinated with cryptocurrencies for ages, it was not long before he noticed the correlation between his collectables and crypto. A collector by nature, he says that “toys & collectables are the physical versions of cryptocurrency; they always have been." Toyken is, therefore, a collector’s cryptocurrency; complete with the value that status, emotions, anticipation, determination, and delight that embodies a collector’s search for rare toy items. Jeremy says that «Toyken will be used for attaining toys & collectables; it is very possible that Toyken, itself, could become collectable.»
Jeremy believes Toyken will succeed where others have failed because just like the successful Telegram ICO, Toyken's Toykenomics are proven, and developed over years of success in the toy retail business.