OurCrowd

There was a meteoric rise in blockchain popularity in 2017. Everyone was in on it. The barber replaced chit chat about hot new stocks with advice about cryptocurrency portfolios. Cab drivers were fluent in ICOs. It was new, it was exciting, it was like investing in the internet in the 1990s.

Many point to ICOs, or initial coin offerings, as a major catalyst for the cryptocurrency craze that took hold from 2017-2018. A simple way to understand an ICO is to think of it as a token at an arcade like Chuck E. Cheese’s. But imagine being able to buy tokens before the arcade ever opens. Tokens can only be used for this specific arcade, have a fixed supply and are not tied to any currency. Once the arcade has its grand opening, prices move up or down based on demand. Naturally, buyers holding onto “pre-launch arcade tokens” hope for a significant uptick in demand, driving prices higher. On the one hand, this demand would result in more games being played, blockchain companies sell digital “tokens” that can be used for data storage, computing power, or even casinos. The “tokens” are new cryptocurrencies and the sale before the arcade launches is the ICO. Blockchain takes care of the limited supply, easy trading and a few other more technical aspects.

[Read more…]