Ethereum, Bitcoin’s biggest competitor, is a decentralized blockchain platform offering a wide variety of diverse services to its users. It does not simply limit itself to simple applications like storage and transfer of value as it can be used to issue, trade, transfer, and exchange both the virtual world and real-world assets and commodities.
One of these diverse services offered by the decentralized blockchain is the new start-up Market Trend of Initial Coin Offering ICO. The following paragraphs describe what an Initial Coin Offering ICO is and why Ethereum has managed to become by far the most popular blockchain platform among start-up companies wishing to raise funds using this method.
Brief facts about Initial Coin Offerings ICOs
An Initial Coin Offering ICO is the method through which a new cryptocurrency project raises capital in order to fund its operations. This is done through the sale of a part of the new cryptocurrency project’s digital tokens to early investors and other enthusiasts in exchange for money. ICOs are used to raise funds for technical development purposes before the cryptocurrency is released.
An Initial Coin Offering ICO is the cryptocurrency market equivalent to an Initial Public Offering IPO during which a private company sells its newly issued shares to the public.
According to Investopedia, an ICO is an unregulated method through which funds are raised for a new cryptocurrency project.
However, this is actually what makes it a much faster way to raise funds because it bypasses the rigorous and time consuming regulated capital-raising process which is required by venture capitalists and banks.
Ethereum blockchain dominates ICOs
Since the beginning of the year, the number of start-up cryptocurrencies has increased dramatically.
Most of these start-up companies use ICOs conducted through the Ethereum blockchain platform in order to raise funds.
Ethereum has managed to dominate this market trend because it offers a flexible and extensive blockchain platform. This is what makes it quite easy and fast for developers of start-up cryptocurrencies to create and launch their own crypto-assets.
Ethereum has become one of the most reliable blockchain platforms receiving endorsements from governments and businesses.
The most important reason that makes Ethereum dominate the ICO trend is not simply functionality and speed. It is the fact that its users trust the blockchain platform. It is really impressive that Ethereum managed to earn so much trust in so little time.
