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Binance CEO on importance of ICOs

10 may 2018, 13:49 Gilbert Hanson

Binance CEO on importance of ICOs

The phenomenon of Initial Coin Offerings as an improved way to gather funds is relatively very young and came with the whole cryptocurrency revolution seen in last years. Startup companies offer their tokens and coins created with the blockchain technology. They are later tradeable on exchanges and has important functions within the platform or dApps developed by these companies. When a project turns out to be well prospering, the worth and price of these tokens raise, making it a possibly interesting form of investing. However, according to the stats almost half of ICOs sold in 2017 failed by February 2018.

Binance CEO thoughts on ICOs

In a recent blog post titled "ICOs — Not Just 'Good-to-Have,'But Necessary", Binance CEO Changpeng Zhao expressed that he believes that ICOs perform far better than regular venture capital funds, even though there is this high risk of failure.

Binance CEO on importance of ICOs

He writes: "Through my own experience, and watching hundreds of other projects at a close distance, I would say raising money through ICOs is about 100 times easier than through traditional VCs, if not more. With the ease of raising money increased, logic says there may be 100 times more startups, well-funded startups, where ICOs are allowed."

Early stages of ICO market

Initial Coin Offerings are very often criticized by many financial specialists and governments, because of high risks involved in such projects. However, Zhao wants to notice that the whole market is still very young and in fact at the beginning of the development road. Therefore, problems like extortions, scams or simply incompetent ICO runners will undoubtedly arise. He writes: "Most ICOs are new startup projects, and have a high rate of failure, just like in traditional startups. This is nothing new. Most ICO investors already know this. ICO investors are early adopters (and learners)."

That's why current problems shouldn't eliminate a potentially good solution and revolution in technology which these new solutions and ICO projects can bring.

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