Why Don’t People Trust ICOs?
Initial Coin Offering (ICO) sales are getting a lot of negative press at the moment, and with giants like Facebook, Twitter and MailChimp banning cryptocurrency advertising, it’s natural for people to feel nervous. It’s right to be cautious, but these blanket bans are making it increasingly difficult for genuine cryptocurrencies to let people know about their offering.
So why is ICO such a taboo term at the moment? Unfortunately, there are people attempting to take advantage of the relative lack of understanding among the general public about cryptocurrency to make big bucks. And even if you know your stuff, it can be difficult to tell the scams from legitimate businesses like ourselves.
To start at the beginning: an ICO is basically a sale that takes place before a cryptocurrency is launched. It’s a type of crowdfunding and allows people buy tokens at a favourable rate; the more people buy during the ICO, the higher the market value will be when it becomes tradable. However, purchasers can’t trade their tokens or turn them back into cash straight away – they have to wait until the cryptocurrency is listed on exchange sites, at which point they can trade them for other cryptocurrencies, which can be exchanged for fiat currencies such as pounds or dollars.
Here’s how people can get be scammed. A large volume of coins are sold during the ICO, giving the new cryptocurrency a market value. However, as soon as it becomes tradable on the exchanges some scamming founders will immediately sell their tokens at this profitable rate, massively reducing the tokens in circulation and causing the value to plummet. With the founders running for the door, all trust is lost in the currency; anyone who can sells before the value hits zero, and everyone else is left with nothing.
With stories of huge losses spreading around the internet, it’s understandable that big businesses are doing what they can to protect their users. But how can legitimate cryptos show people that they’re not going to run off with their money?
One way is for the founders to agree to keep the majority of their tokens for a fixed period of time. This is what Assetereum co-founders Andy Papaiacovou and Chris Pedge have done: they have committed to keep a minimum of 75% of their ASET tokens for at least 12 months from the end of the ICO, helping to secure the coin when it hits the exchanges. It also shows that they are committed to the success of the coin, as they will only gain if it does well.
On top of this, CEO Andy Papaiacovou is transferring ownership of his two successful businesses Utilico Energy and MyDiscountShop (formerly E-conomize) to Assetereum, with the sole intention of increasing the value of the ASET tokens. The profits from these businesses will be used both to increase the value of the investments and be paid as profit share to token holders. Not only is Andy staking his other businesses on the success of Assetereum, but all our partners have exchanged their shareholdings in these businesses into ASET tokens. We really are putting our money where our mouth is, which should be a real confidence booster.
Despite the current slump, the financial world is beginning to acknowledge that cryptocurrencies aren’t going anywhere. There are big gains to be made in the market for the savvy investor, and so it’s more important than ever to proceed with caution.
Visit our website: www.assetereum.io