Cryptocurrencies were introduced as a disruptive financial technology (fintech) with the purpose of making the global transactions faster and easier. In the longer run, it won’t come as a surprise if it eliminates the utility of banks and money transfer services.
What is Blockchain?
A simple definition of blockchain is that it “is a disruptive technology that uses a distributed messaging protocol to create a shared ledger between trading counterparties to validate transactions.” The data persistently stays in the cloud so it cannot be lost, corrupted, or compromised in any way.
It was designed to allow people to trust the mechanism itself instead of relying on any central governing authority and the maintenance is performed by a network of nodes running the software. There is no need to depend on a third party with each transaction leaving an auditable trail behind itself.
ICOs – Why Tech Investors are Loving them?
According to CNBC, startups have been able to raise a whopping $1.2 billion through ICOs and this sum easily surpasses early-stage VC funding. ICOs function more or less like IPOs but they do not tend to issue ownership shares rather, the company sells digital tokens which are created through blockchain technology.
The record earnings through ICOs were collected by the privacy-focused browser, Brave, which earned $35 million from approximately 130 investors right within a minute. This caused a lot of industry pundits to believe that strategies like these could be the future of investing.
With the critics creating a fret about the ambiguity factor attached to the ICOs, there is no denying that there is a constant fear of high vulnerability to scam or fraud. Nonetheless, it is quite early to take sides and one simply cannot ignore the benefits brought about by these ICOs.
The investors absolutely love them because
• The startup doesn’t need to surrender its control to any third party including the venture capital firms or private investors.
• There is no burden of paperwork like that involved in IPO equity.
• Buyers can even sell their tokens in secondary markets if a particular ICO catches a lot of attention.
The World of Pre-ICOs
Much like the name suggests, through a Pre-ICO, an investor is able to invest even before the official crowd sale begins. Most of the time, these ICOs are not able to raise a significant amount but this is not the case with CannaSOS.
CannaSOS announced that the first 10 million tokens will be distributed at a 40% discount and within a week of the announcement, 8 million have already been reserved. This was nothing less than a surprise because let alone the term ICOs, even the cannabis industry is subjected to a lot of speculation because of ever-changing regulations around it.
The founder and CEO of CannaSOS went on to say, “ We’ve been amazed by the intense interest we’ve received at even this relatively early phase of the initial coin offering. Clearly, many individuals and organizations have realized the huge potential and massive market need for this token and are responding accordingly.”
The leading names in the investment industry have called the people to wake up and recognize the power of ICOs as only they have proved that they can “turn arrogant venture capitalists on their heads,” says Michael Jackson from Mangrove Capital Partners.
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