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December 12, 2017 | Updated on: March 29, 2024 | Reading time 6 minutes

Smart Investment into Decentralized Economy

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CEO and Founder

Blockchain Innovations Travel Easy and Far

Ideas, inventions, devices, and technology innovations spread readily and far across the world. In the 21st century, Blockchain is growing into a new technological institution that will fundamentally change how people exchange value and build trust. It will become a game-changer for existing formal institutions such as government, finance, and corporate, and will remove and reduce major constraints to economic development, including bribery and intransparency of supply chains. It will also greatly influence the cultural and financial exchange in the world.

Blockchain promises to transform the 21st century economic and social collaboration landscape.

An important indicator of blockchain-powered innovations environment is that the a large number of investment and governmental institutions support programs to disseminate these technologies to a great deal of markets. Blockchain opens an era of the Internet of Values, bringing transformation to financial markets, the Internet of Things, anti-fraud, smart contracts, cloud storage facilities, digital identity, etc.

What is Blockchain?

Let’s look at Blockchain technology as a transmitter of ideas, beliefs, and inventions. Blockchain technology is a decentralised database that stores a registry of assets and transactions across a peer-to-peer network. Transaction history is stored in blocks, which are cryptographically linked together, including the preceding blocks, and secured. One can compare it to a kind of public registry, which keeps the information on who owns what  and who transacts what in blocks of data. Each transaction is replicated in the network, that makes the entire blockchain system secure and tamper-proof.  This differs blockchain from regular databases, where data can be deleted or edited from a central location. In contrast, Blockchain contains immutable and unforgeable data on transactions. Blockchain is somewhat similar to Wikipedia, being an open platform and infrastructure that stores data on transaction, and the changes to that data over time. The Blockchain technology is going to re-architect the entire web.

The ICO Market. What Is It and How Does It Work?

ICO is the abbreviation for Initial Coin Offering. Token sale through an ICO platform is a tool for startup fundraising, which is getting more mature every day.  ICO crowdfunding is a relatively new platform; it can be explained as a merge of a Kickstarter and an IPO model in the blockchain era. The ICO platform is used by project creators (mostly by high-tech companies) to communicate their ideas to potential investors and blockchain community members, as well as to manage communication and financial transactions associated with them. Along with venture capitalists, many individual investors seeking yield welcomed ICO crowdfunding as a way to get access to the most innovative technology projects and to obtain the most promising long-term benefits.

When using the ICO platform, the backer doesn’t act as an investor, since supporters receive no equity or ownership in the project they are supporting. Instead, they get the opportunity to be the first to purchase tokens at a higher discount, or to participate in the Token Sale.  In exchange for that, depending on the commitments, the backers receive tangible values and become token holders, purchasing digital currency at a significant discount. Unlike IPO project owners (very often they are technology startups) don’t sell equity, they are offering either cryptocurrency or a token that represents the blockchain-based project to the public across the world. Fundraising through a token sale is indisputably advantageous because it is straightforward, faster, and less bureaucratic.

One of the most successful ICOs was Etherium itself, when Vitalik Buterin created the whitepaper offering to exchange ether for bitcoin.

Back to the Future. Is Blockchain Still a Black Box or a True Game Changer?

Continuously growing interest towards blockchain powered ICO crowdfunding is because tokens are part of the initial secure blockchain protocol.

In 2016, the DAO (Decentralized autonomous organization) reported that 64 ICOs raised 104 million USD. Obviously, the ICO projects bring three key advantages to creators of blockchain-powered token sales: awareness, customer feedback, and the funding. Growth in the value of bitcoins and alternative cryptocurrencies will continue along with the regulations and formalization procedures. The project’s creators will have to demonstrate to the backers something more trustworthy and valuable than a mere whitepaper and a one page website.

That said, crypto investors are changing their course to long-term blockchain investment decisions, and getting focused on the values project creators suggest for token holders instead of cryptocurrency speculations. This will definitely revolutionize the blockchain fundraising model and harness the gold fever that came about during the last few months.

Convert Online Visitors to Financial Supporters

In other words, before the project is produced or created, backers have the opportunity to experience it, because it’s something they are excited about and want to support. Using Kickstarter, project creators can determine if there is sufficient interest in their idea before heavily investing a lot of time and money plus can raise all or part of the money needed to make their creative project a reality.

Make Your Money Work Smart. Invest Securely

This is all good for the company receiving the funds, but what benefit does an ICO give investors? This is where investing in digital tokens that companies issue gets interesting. How does one navigate in the raging ICO waves, when each ICO looks unique and attractive, when  cryptocurrency speculators “migrating” to Blockchain Klondike Gold Rush undermine trust in the most promising technology? The prices per various coins change every minute, the methods of purchase vary, the impact of governmental bans is unpredictable.

In the next article you will discover how to navigate a blockchain-powered sulutions market and how you can gain long-term benefits.

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Written by

CEO and Founder at Spin.AI

Dmitry Dontov is the CEO and Founder at Spin.AI.

He is a tech entrepreneur and cybersecurity expert with over 20 years of experience in cybersecurity and team management.

He also has a strong engineering background in cybersecurity and cloud data protection, making him an expert in SaaS data security.

He is the author of 2 patents and a member of Forbes Business Council.

Dmitry was Named 2023 Winner in the BIG Award for Business and Small Business Executive of the Year.

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