Will CryptoPay Join the ICO Mania?
Unless you’re a hermit on the peak of a mountain in Tibet, you’ve heard about the massive and ongoing explosion of ICOs (For a list of some upcoming and active ICOs, look here.) An ICO is an ‘initial coin offering’ where digital tokens are sold in a limited supply to investors or buyers who then hold these digital assets as links to value in the parent company.
It’s become a great way to ‘crowdfund’ a startup, and it seems that there’s a new ICO every day, with many more in the pipeline. In fact, the first half of 2017 saw massive amounts of money raised, with over $700 million in June alone.
Securities, Scams, and Scares
The wonderful part about ICOs is that they were, for most of 2017, effectively unregulated. That is until the US government office responsible for the creation and exchange of securities (the SEC) ruled that the DAO ICO was, in fact, a security, and was obligated to file with the department in order to be sold legally in the US. Internationally, there is still no strict governance, but in the US, the ICO craze has cooled as result of government intervention.
Further, there have been a number of concerning scams in the ICO world. Companies claiming to do everything from inheritance to gambling to globalized computing have sprouted up, and some of them have been completely fictitious. Scammers build a nice looking website, show some interesting detailed graphs, claim to have a good idea, and ask for investments. After a few weeks of money generation, they shutter the webpage, shut down the company, and disappear with the cash, with almost no way to trace them.
Finally, there have been a number of scares in the ICO world. Companies that may have a viable business model, and even have some real intellectual capital tied up into ideas, but who are really not functional at the time of the ICO. The claim, of course, being that, after funding from the ICO, the company will create the advertised product, and investors will reap rewards from the success.
The whole system should sound a bit like the wild wild west, filled with potential for real investors to make lots of return, but also filled with potential financial land mines, where investors will definitely lose their shirts.
CryptoPay and the ICO Explosion
The best kind of ICO is a company that already has an active and thriving business model in place, with real clients, real track record, and real profit and loss statements. The advantages should be obvious. Investors aren’t taking a massive gamble on an unproven idea, and the chance of the ICO being a scam is zero.
One company that may be potentially starting an ICO is CryptoPay. The company is already a big player in the cryptocurrency world as a blockchain enabled payment gateway providing Bitcoin wallets, debit cards, and innovative merchant processing solutions. They’ve built a substantial client base with their Bitcoin wallet system by offering flex accounts within the wallet so that users can hedge their Bitcoin against fiat currencies like USD, EUR, and GBP. They’re also offering multi-sig technology through BitGo, the industry leader in the area.
What’s more, they’ve created a Bitcoin exchange and a Bitcoin debit card to help clients manage their Bitcoin and also create liquidity in the Bitcoin marketplace. Clients are able to use the debit cards physically wherever VISA is accepted, and are also able to use them digitally through the relationships CryptoPay has established.
So Why an ICO?
With a stellar track record and a loyal customer base, why is the company now considering an ICO? The company is considering an ICO as a possible way to bring new partners into their business model. CryptoPay would issue a limited number of tokens to partners who are serious players in the crypto-sphere and who can bring real value to the company. Partners would need to provide substantial support to the project including legal, design, and marketing, as well as investors and miners. What’s more, the company would limit partnerships to those who are invited by existing partners, making the ICO extremely exclusive, with tokens being distributed at large-scale events like Hypathon. As a limited audience offering, a CryptoPay ICO would make excellent sense for the company and investors alike.
When it comes to ICOs, the potential CryptoPay ICO has all the ingredients to be an investor dream. Fantastic fundamentals, existing business model and clientele, and a smooth system of distribution. The only issue to worry about is how to get invited.