Is ICO Speculation Healthy?

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A new and hip way to invest is becoming real via advances in blockchain tech.

On 19th April, the ethereum banking app Humaniq became the latest blockchain startup to make a mark by using a fundraising process called an initial coin offering (ICO), securing $3.9m in pre-seed funding by creating provably unique cryptographic tokens and selling them to the public.

A week later, Gnosis would go on to raise eyebrows in the industry for the $12m it secured in less than 15 minutes – all for offering 5% of the tokens that will power its decentralized prediction market application in a digital auction.

But, these aren’t the only projects seeking to test the model.

CoinDesk data shows that the total funds raised by ICOs in 2016 reached nearly 50% of what startups received through traditional venture firms that year. But, with more than 75% of participants reporting they were investing for financial or speculative reasons, this growth in interest has raised concerns.

While the idea of a high-risk, high-return investment seems to make sense to those eager to be on the ground floor of the next big thing, the lack of structure, the relative novelty of the industry and the opaqueness of

Read more ... source: CoinDesk

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