Blockchain technology is growing at an incredible pace and making invasive inroads into spheres of life and business that even its initiator might not have thought possible. This marvel of human creation continues to break new grounds as it represents the absolute genius which breaks the myth that every piece of human creation can be easily sabotaged or compromised by another human. From finance to health insurance, and the supply chain, there is basically no sector of the industry that this technology does not seem poised to disrupt and shake things up within usually in the form of an ICO.
A Review of ICOs in 2017
ICOs in 2017 will forever be remembered as that bumper year in which the blockchain technology grew by leaps and bounds. This is the year in which the whole cryptocurrency and blockchain industry grew in value over 10 times from where it began in January, with the likes of Bitcoin and Ethereum leading the unprecedented charge. This growth, however, was not only propelled by the rise in value of already present digital assets, but also in large part by the sudden proliferation in the number of brand new blockchain based products that were released within the market. The new products each having distinct names (and purported problem which they aim to solve) have been a key ingredient in the meteoric surge of the industry within last year and running into the present year.
Barely a few days passed without a new currency, or token coming onto the market, so much so that even the experts in the industry had trouble keeping up. ICOs were the new phenomenon, as they were not only embraced by traditionally crypto startups but even established companies from some parts of the world began leveraging on this innovative and unrestricted means of seeking and getting funding in bypassing their own state regulations that come with taking a company public. Just look at the vast increase in ICO sales that took place in 2017 compared to all the years prior!
In 2017 alone billions of dollars are estimated to have been raised by startups through ICOs, up to a point when concerns began surfacing that some unscrupulous elements are taking advantage of the ease of the process to defraud the unsuspecting buying public out of their money. This coupled with tax evasion fears is what triggered a backlash at some point where the Chinese government banned all new ICOs from taking place within its territory. A clampdown that also affected its biggest exchanges, who were forced to shut down and move off Mainland China. And as we begin the year debates are beginning to rage over the future of ICOs as we go into the future. Let’s discuss a brief overview of some of the most important topics.
Governance or Control Structure
One of the main things that currently beleaguers the cryptocurrency and blockchain industry and in extension the ICO market is the accusation some authorities cast on it that it is anarchic and gives the perfect hiding place for criminals who easily raise fraudulent ICOs that end up stealing their investor’s money and going into thin air. Governments such as China (which was previously the biggest Bitcoin market) and South Korea (Ethereum’s biggest market) have taken the most decisive measures as rumors of further clampdown keep making the rounds in these two countries. We have already seen China come out with multiple new reports about banning almost every form of cryptocurrency in one way or another.
There is no doubt that the blockchain technology’s potential for creating one of the most disruptive atmospheres any technology has ever been successful at creating, but right from its beginning when Bitcoin was viewed as the preferred currency for drug dealers on the notorious dark web markets. The industry has grappled with negative perceptions as one that promotes no regulation just to give criminals hiding places. With a lot of ICOs ending up as pump and dump schemes, there are growing voices within the blockchain industry that everyone stands to lose if the technology gets overpowered by those who abuse it for selfish gains rather than delivering great products and services the technology is capable of creating.
There are those that say the technology ought to submit itself to state oversight, which will ensure no criminality takes place within its boundaries, while opponents of this cause say that it is both not feasible, and completely against the core values of decentralization the industry has championed right from its roots. As the industry grows, however, some experts say that some form of governance structure must manifest itself, even if it’s within the industry itself rather than a governmental one. They say that it is indeed high time the industry back up the incorruptibility of the core technology, with the transparency and equal incorruptibility of those that run it.
A Saturated Market
One of the key problems that plague the current blockchain industry stems from the high numbers of ICOs that never take-off is the utter saturation of the market with products that resemble one another in all but name. The cryptocurrency niche of the blockchain technology is the one that is most culpable in this, as there are too many Bitcoin clones or other Ethereum based currencies that do nothing other than getting used to exchange goods and services. Experts say if the industry wants to be taken with all seriousness, then products that offer nothing special must not be given the spotlight while those with genuinely new ideas should be aided to get the finances they need to bring their products to life.
From Potential to Actual Impact
The last major thing to look out for in 2018 is if the ICO market will take the next step from the latent potential of the blockchain technology into actually taking the necessary steps to deliver the products that will actually make a positive impact on lives. With the birth of the technology almost clocking 10 years, experts say it is time majority of the platforms that have raised money for years now begin to deliver the actual services they have promised instead of still acting like startups with a lot of time on their hands. The blockchain technology if implemented to the letter in key sectors of business will be a true marvel as whole processes will never look the same.
What Does this Mean for ICOs in 2018?
It is still in the early days of 2018 to say whether the present year will see the same explosion in the value of cryptocurrencies and the blockchain technology as was witnessed in 2017. If the first few days of this year were anything to go by (with over 50 fresh coins and tokens being released in less than 2 weeks) this year, we will witness an equal if not a greater number of currencies and tokens that come online all purporting to have problems they want to solve, and all seeking to raise millions of dollars in funding. Just take a look at the coins released the last 3 days alone! (as of 17 Jan 2018)
How to Protect Yourself with ICOs in 2018
My advice to you remains the same, do your own research very carefully into each ICO you choose to support and follow. Read the whitepapers, research the team, and ensure you make your own decision and are not following the masses or YouTube shiller. We have seen where that got all the BitConnect follower (sorry if this was you). Don’t make the mistake that many people make trying to make a quick buck because it’s touted all over social media, and don’t invest money you cannot afford to lose. Follow those two key pieces of advice and you will not end up angry and out thousands of dollars. If you are looking to trade also consider reading Tips for Altcoin Trading or our look into Cryptocurrency Mining.