The recent wave of new crypto asset issuance has been sweeping the start-up fundraising world.
There are several ways for an entity to participate in this new wave:
• Raising funds through an ICO (initial coin offering)
• Issuing crypto assets
• Investing in crypto assets
If you're considering one of these activities, you need to familiarise yourself with Crypto Assets, the ICO process and the regulatory environment. Crypto assets were introduced less than a decade ago, first in the form of cryptocurrencies and then they rapidly expanded to other categories as new platforms emerged. Usually, a crypto asset refers to:
• A cryptocurrency with decentralised issuance and transactions
• A unit of value, issued into a decentralised system and secured by either someone or
something; it only physically exists in the form of registry entries on the blockchain
• A unit of value that is both issued and validated by the same organisation, yet not backed up by anything on the blockchain
Whereas Bitcoin is an open-source, decentralised cryptocurrency, (i.e. not issued by one Authority), most of the recent crypto assets are issued by one centralised authority (i.e. an entrepreneur) on an existing or new blockchain open source platform, and their primary purpose is to raise funds for future development of a product or service.
Instead of approaching banks, venture capitalists or even classic crowdfunding websites, a growing number of entrepreneurs issue a crypto asset to the public in return for their funds. They use the blockchain as a vehicle to attract investors even though their ideas, services or products may or may not be directly connected to the blockchain technology.
Download the Full Report Crypto Assets and ICOs here.