Is Banning Initial Coin Offerings Really the Answer We’re Looking For? (INFOGRAPHIC)
One of the most hotly debated aspects of the cryptocurrency world are the initial coin offerings, better known by their shorter name of ICOs.
As you can see from the infographic below provided by BTXchange, ICOs have become a popular means of fundraising for startups in recent years as they allow firms to receive funds without having to seek out venture capital. By relying on an ICO framework, startup firms can raise money quickly in exchange for nothing more than so-called tokens, cryptocurrencies that gain value once the project enters its launch stage.
However, ICOs are also faced with a sizable stumbling block that seems to be preventing the industry from fully taking off. Interestingly enough, the main reason why ICOs face an uncertain future is the same one that made them attractive to startups in the first place – ICOs are designed in a way that they do not need any regulative body looking over them.
As you can probably imagine, this does not sit well with governmental entities across the globe who frown upon the idea of not being able to supervise and tax firms on the come up.
Despite more than a few evident advantages over other, more traditional methods of raising funds, the ICO boom is beginning to stall as a growing number of countries around the world have started to place embargoes on ICO projects.
As you’ve probably heard already, China is spearheading this trend as it decided to ban digital fundraising. Some other nations have followed China’s footsteps to some extent.
Such scenarios lead us to a fair question – are bans really the right way we should be dealing with problems arising from the ICO world? After all, if this field is capable of funding some incredible projects (Ethereum, ICO’s poster boy, naturally comes to mind here), is preventing all ICOs from being launched really the way to go?
While different people will have varying opinions on this matter, one thing is for sure – before we either decide to start supporting bans or we begin to support ICOs of all kinds, we need to be on the same page about what initial coin offerings are and how they work.
This is the main topic of the infographic you’re about to read. It unbiasedly presents you with both the good and the bad side of digital crowdfunding. It helps readers get a strong grasp over the concept of ICOs and equips them with the knowledge necessary for making a decision on whether bans are really the best possible solution to the regulation problem at hand.