2017 saw cryptocurrencies making it to the headlines. But besides entering the news, cryptos managed to attract a lot of attention to the technology that backs them all – the blockchain. Perhaps the biggest win for the community is the fact that blockchain apps enjoyed a great interest from the public.
2017 saw cryptocurrencies making it to the headlines. But besides entering the news, cryptos managed to attract a lot of attention to the technology that backs them all – the blockchain. Perhaps the biggest win for the community is the fact that blockchain apps enjoyed a great interest from the public. This is why 2017 became the year of Initial Coin Offerings.
Many investors and even your average Joe thought it was a good idea to put some money in various projects through an initial coin offering, a process that has almost no clear regulation. In ICOs startups sell their tokens to raise money for their projects. According to TokenData, 902 ICO were carried last year. The downside is that 142 of them failed to raise funds at all. An additional 276 failed after they managed to get investments. This makes 418 fails out of 902 attempts or 46% failure rate if you like.
But that’s not all. The statistics show that another 113 projects suddenly stopped being active for one reason or another. Either their teams disbanded or the supporting community moved away. Speaking of money, some $233 million disappeared in those 531 “revolutionary” projects. If you are not familiar with ICO fundraising it is advisable you do educate yourself before investing your savings in the next big thing.
75% of all startups that rely mainly on traditional venture funding quickly disappear if not backed by big companies. Up to 40% of these startups never return the money they’ve collected. In the USA alone, 20% of the companies survive their first year of existence. There are many factors that contribute to the high failure rate but let’s face it, the majority of the projects hardly ever offers a product that makes sense or would be a least partially beneficial to the society.
The good news is that it wasn’t until the second half of 2017 before ICOs really enjoyed massive popularity. Furthermore, not a small portion of the projects proved to be just exit scams. Plain simple, just present your product without having any intention to develop it, raise some money and then vanish. Others failed to keep the momentum and the community just lost interest.
Now the internet is full of dead websites, inactive twitter accounts and abandoned Facebook and Reddit discussion groups. Once again, do your research before betting your cash in ICO again.