5 Signs an Initial Coin Offering Is a Scam
If you have been paying attention to the fintech space over the past few months, then you have likely heard the term "ICO" thrown around time and again. To date, blockchain startups have raised over $3.5 billion via this emerging fundraising channel. But what are they? And why should we care about them?
At a high level, an Initial Coin Offering ("ICO") is a "fundraising mechanism in which new projects sell their underlying crypto tokens in exchange for early capital." Often compared to the more mainstream Initial Public Offering (IPO), ICOs democratize the fundraising process, serving as a crowdfunding instrument that can be levered at scale. While a relatively new phenomenon, these token sales are quickly gaining momentum, empowering a global pool of investors to fund the next generation of companies.
The biggest problem with ICOs, as they gain public attention, is that they are unregulated. There are few barriers to entry for anyone wishing to create a white paper, design a simple landing page and start collecting funds via a digital wallet. There are a number of fraudulent "entrepreneurs" who are abusing the system. As a result, it can be extremely challenging, as an investor, to pick the needles out of the looming haystack.
There is, however, tons of opportunity for ICOs to fund ambitious projects that will foundationally change our evolving economy. Here are five signals to look for before you invest in any ICO...
https://www.entrepreneur.com/article/306563
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by Idham Azhari
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