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Blockchain History Part 2: Rise and Fall of the ICO

This is part 2 of our series on blockchain history. Read part 1 here.

In the media about bitcoin one narrative has always been very prominent: the bubble. Indeed the cryptocurrency went mainstream, one of the biggest crashes happened in December 2013. The price went from 1,163 USD to 152 USD. A loss of the 87%. With many actors today screaming for volatility this crash still represents the biggest bubble of Bitcoin.

Although it was the biggest, it was not the most famous.

Bitcoin touched almost 20k USD dollars, with a total market cap of almost 1 trillion, at the end of 2017. It was a gold rush period, where also the butcher next door advised you to buy cryptocurrencies.

Photo by Sharon McCutcheon

The ICOs gold rush

What was the motivation of that enormous bull run?

The whole crypto world was growing exponentially thanks to a new kind of high-risk and high-reward investments, ICOs.

The ICO, called “Initial coin offering”, was the equivalent of raising capital (like a traditional IPO) with digital currency such as bitcoin. The way it works is this: A company introduces a new token through fiat creation, called “Utility token”, that would be useful to make transactions on their network. They open up a timeframe of a few weeks/months and sell their digital token for another currency. Often, this ended up in buying worthless “digital units” for superior cryptocurrencies like Ether and Bitcoin.

Although the use of the tokens were exclusively for the blockchain environment, these tokens soon became an object of high speculation. An infrastructure around raising and rating crypto projects was built. Usually an ICOs took a place on the companies website.

When listed, these tokens had such high volatility that investors could do a 10x investment or lose the 90% just in a matter of hours. It turned into the modern day gold rush.

Without an existing centralized entity which ensures safety and validity of actions, scamming became extremely easy.

This sort of “Wild West” of the crypto-investments determined the great downfall of 2018 and a lack of trust in the crypto world.

STO’s, a successful compromise

The big bubble of 2018 reduced the trust that people had the crypto world.

Lots of new projects aimed for million dollar gains without a valid product. Scam projects increased and the value of cryptocurrencies was plunging. Therefore the unique solution was to bring trustworthy financial instrument to the blockchain ecosystem.

How?

Introducing security tokens. By tokenizing assets and regulate them through a financial institution.

In fact, asset tokenization creates a more liquid market of an asset, that could be of whatever nature. Think of e-real estate token or an equity token.

With a financial institution that assures the existence and the compliance of a project, investors would never hesitate anymore.

From the TaoDust Whitepaper

The TaoDust STO

TaoDust is an equity crowdfunding platform backed by a blockchain.

We tokenize the companies’ equities in order to create a liquid and boundless market.

But what is the Tao Token?

The Tao Token is a security token regulated by the financial institution of Malta.

With our tokens you will have rights on our dividends, that derives from our commissions and from the dividends of the companies that crowdfund with us. Since TaoDust will have equities of each enterprise.

The reader can easily notice that the bigger will be the platform, the higher will be their revenues and so the dividends of the investors.

We are currently in a private sale phase and we are finding always more excited investors that are coming on board.

You can know more in our telegram group or website that are linked below!

Keep up with the TaoDust experience!

  • For the latest events from the TaoDust platform, please follow our blog.
  • To learn more about the TaoDust tokenized crowdfunding platform please visit our website.
  • If you wish to chat with the team about your questions please visit our Telegram channel
  • For general updates about the platform, please follow us on Twitter.
  • Press and partnership request email info@taodust.com

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