Many startups in the nanotechnology/ nanomedicine fields are taking the ICO route over the traditional venture capital path because of the low barriers to entry. The explosion of ICOs in the last year is numerically staggering and they are being seen by many as a panacea.
Every day now I am hearing of proposed ICOs that are clearly flawed. Usually due to a fundamental misunderstanding of what an ICO is meant to do. I’ve seen projects that don’t actually require tokens. Failure is almost guaranteed in those situations.
Decentralized methods of crowdfunding don’t happily invite regulation yet how does one filter a legitimate ICO from a sham? Effort. Effort to learn, effort to see thru the hype and effort to earn the attention and trust and advocacy of those already very experienced in this area. The web is there for all of this. Use it.
If this doesn’t sound as sexy as generating (relatively) easy money then you have already missed the point. An ICO must have value beyond solving your startups financial requirements. Or it wont last long.
The excellent animation is from elementus.io:
This graphic shows every token sale that successfully raised at least $100k, from the beginning of 2014 through the end of last month, November 2017. The bar chart at the bottom displays the total dollar amount raised in each month (details below).
How big is the ICO (aka token sale) market really?
It seems like this should be an easy question to answer. After all, blockchains are open data layers that contain a complete record of every transaction ever made. However, we’ve found the answer to this question to be surprisingly elusive.
We surveyed the web for data on token sales and turned up over 100 ICO listing sites. Estimates on the total dollar amount that has been raised via ICOs to date range from about $3.5 billion to $4.5 billion.
Why such a big discrepancy?
As far as we can tell, all of these estimates rely strictly on reported figures — either by the ICO issuer itself or by another third party. There is nothing wrong with this approach. Many data providers in the financial world collect their information this way. However, why rely strictly on reported figures when the actual transactions are available directly from the blockchain?
We decided to estimate the size of the ICO market ourselves by going directly to the source.
The figures in this post are based on our own deep dive into the Ethereum and Bitcoin blockchains. We searched for every token, crowdsale, and multisig wallet we could find. We then identified the corresponding owners and added up the total amount of contributed funds — taken either from the blockchain itself or as reported by the fundraiser.
In total, we estimate about $6.4 billion has been raised via ICOs to date – materially larger than what is being reported elsewhere.
Perhaps more surprising than the fundraising total is the trend over time. The ICO market is not dying down, as many have reported. It’s still growing.