Almost 50% Initial Coin Offerings Launched Just as Concepts

A research done by ICORating states that almost half of Initial Coin Offerings (ICOs) ask for funding while offering nothing more than an idea. The study uncovered that 46% of ICOs launched without even a day in development.

The ICORating’s research divided ICOs into five development stages – idea, code, Minimal Viable Product (MVP), alpha, and beta. Surprisingly, only 26.2% of projects had an MVP, and 11.2% reached a beta testing phase at the time of launching their ICO. Additionally, 15.5% projects were in an alpha stage of development. Finally, 0.5% ICOs began to code during their campaigns.

Losing the trust of the investors

Almost 50% Initial Coin Offerings Launched Just as Concepts

ICOs don’t have the best reputation with the investors, and this finding won’t do them any good either. For everyone not in the know, ICOs are the preferred method of funding cryptocurrency projects and startups. They offer investors to buy coins or tokens, which behave like stocks, with real money to fund the project. However, unlike Initial Public Offerings (IPOs), ICOs are unregulated. Plus, investors don’t have any legislative tools to protect themselves from frauds. This creates space for various shady practices. After all, it’s no secret that ICOs have been ridden with frauds, failures to meet goals, and outright thefts.

So why do projects launch before even having a single line of code to their name?

Well, it all comes down to money. For example, when developing a Bitcoin betting platform, developers have to hire competent staff. This includes experienced programmers and coders, as well as gambling industry veterans to guide the project. As you can imagine, this all costs a ton of money. That is why many companies launch their ICOs first so that they can hire the development team with the funding they receive from the campaign.

While helping creative people realize their ideas is a positive thing, it should be noted that asking for millions of dollars while having nothing more than a concept is unacceptable. So, if you plan to invest in an ICO, know that you are doing it at your own risk and maybe that project is just an idea.

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