Ethereum is an ideal example of open standards, transparency, and security. What have we built on these impressive foundations? The ICO industry is plagued by a lack of information, security flaws, and outright frauds. It is time to hold ICOs to a higher standard. By using a standardized ICO platform, you can rise above today’s troubles and join the movement to a safer and more inclusive future for cryptocurrencies
Securing the Future by Learning from Past Mistakes
Standardizing ICOs brings a dramatic reduction of technical glitches, smart contract errors, and other mistakes. The cryptocurrency market is still new, so honest mistakes are frequent. Newsbtc.com reports that real estate listing platform REX lost 1.3 million US dollars in ICO funds because a coding error sent funds to the wrong address. Addressing errors are more common than one might expect. According to Forbes, more than 10% of cryptocurrency users have sent funds to the wrong address. Another risk of attempting an ICO without a standard platform is failing to account for demand and not having enough server capacity available.
The risks of unintentional errors are magnified by black hat hackers and phishing attacks. In total, over 300 million euros have been stolen from ICOs. However, cryptocurrencies are naturally very secure. Satoshi Nakamoto’s true identity remains a secret, and Nakamoto may still have over a million bitcoins. The key is to adopt the right procedures, which is easy with a standardized ICO platform.
Improved security also directly increases the amount that can be raised in an ICO. One of the central tenets of Modern Portfolio Theory (MPT) is that investors must be compensated for additional risk. By using a standardized ICO platform like Tokeny, you reduce the risk that the ICO will be hacked and increase the amount that investors are willing to pay for tokens.
Informed Investors are Intelligent Investors
While some might find it amusing that UET (Useless Ethereum Token) reportedly raised over one hundred thousands euros, it is a sad commentary on the current state of token sales. For too long, the lack of standard information has allowed poor investments and scams to profit at the expense of honest businesses and genuine innovators. This is not a sustainable growth path for the ICO industry.
For markets to operate efficiently, investors must have full access to relevant information. The regulations for securities listed on major stock exchanges ensure that investors receive timely and accurate information. There are no such regulations for cryptocurrencies, but investors and innovators benefit from openness. Transparency and openness helped Ethereum to achieve a market capitalization of tens of billions of euros in only a few years.
A standardized ICO platform gives investors a convenient way to access trustworthy information about ICOs. Informed investors can make better investments and avoid scams entirely. Accurate information, workable business plans, and utility tokens with actual utility are all easy to find on a standardized ICO platform.
Making Markets More Accessible
The original promise of cryptocurrencies was to give everyone direct access to financial markets. When investors buy stocks online, they usually do not worry very much about technical glitches or security. For cryptocurrency securities to be genuinely accessible to all investors, ICOs need similarly reliable standardized platforms.
Standardization is even more important for utility tokens. Consumers are simply unwilling to reinvent the wheel every time they buy goods and services. Amazon and eBay account for over half of all e-commerce sales in the United States according to eMarketer. Shopping centers are also far more popular than individual brick and mortar stores.
It is clear that consumers love one-stop shopping. The same is true with utility tokens. People who have bought utility tokens on an ICO platform before are much more likely to make purchases on that platform again. If you want to sell, you need to go where the customers are. Consumers and intelligent investors are increasingly looking to standardized ICO platforms to avoid the broken promises of the past.
Hopes for the Future
Many established companies have avoided the ICO market entirely because of continued uncertainty. Given the flexibility and profitability of ICOs, that should not continue indefinitely. Even the largest companies could generate positive publicity and substantial capital by holding utility token ICOs for new services. Before that happens, we need to see more in the way of market maturity. Standards must be set within the industry, technical issues must be resolved, and legal questions must be answered.
If large companies embrace ICOs, cryptocurrencies also have the potential to attract mutual funds and institutional investors. In the investment world, higher standards are even more crucial to success. Retirees and fund managers do not want any exposure to malicious hackers or scammers. What they want is something like the transparency and security that can be provided by a standardized platform.
Steve Jobs started out with blue boxes that allowed the hackers of that time to make long distance phone calls for free on AT&T’s network. Jobs went on to found Apple, and today millions of iPad and iPhone users are paying customers of AT&T. That change required a substantial amount of growing up, and cryptocurrency pioneers face similar choices today. Do you want to be part of a brighter future for ICOs? It starts with setting a higher standard today!