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Main Challenges of Starting ICO

Initial Coin Offering, also known as crowdsale, is the technology for funds raising with the help of which new startups and projects are sold to investors. Nowadays, a status of the ICO  is neither a legitimate or illegitimate as of a means of raising funds. Though some countries started developing regulations, these are not established in any of the world’s countries which sometimes makes ICO not the most trustworthy source of investment.

Each ICO project is based on the blockchain, which is a digital decentralized ledger where transactions are registered without an intermediary, that is, a bank. Blockchain primarily focuses upon applications in the financial industry. Nowadays, however, there is a fast-growing tendency for other sectors adopting the technology. Among these are energy, healthcare, insurance, logistics, commerce, advertising, VR.

Among the main advantages of Blockchain are:

  • The accomplishment of transactions without an intermediary
  • Fast verification and processing of remittances
  • Transparency of the system to every user
  • Decentralization allowing to minimize risks of hack for each user

ICO Difficulties

There are generally a number of difficulties making ICO hard to carry out successfully. To start with, one has to answer whether an ICO is the best way to raise funds. This very consideration is the first obstacle on the way as there are a lot of projects seeking contributions out there, and competition is fierce. Therefore, for the ICO to be successful one has to be sure that his or her project, team and plan are the right ones and really do suit for ICO crowdfunding.

The second challenge on the way is the implementation of a token. Apart from the development of the business and marketing plans, one also requires a solid token plan to be in place. Such a plan should include the economics of the token such as the number of tokens and plans for distribution, as well as its characteristics and special function within the platform, product or service. The dates of the tokens generation, as well as the maximum cap of tokens, are also to be thought of carefully in advance.

The third challenge has to do with the scrutiny on the part of the potential investors. One of the best ways to prepare is to make sure that the development team has produced a proof of concept or an early release version of your software. Creating a tangible product shows promise for long-term value, and in this way, you are more likely to create traction and encourage people to explore your token offering more seriously.

To be able to overcome the fourth hurdle, one should ensure that the product offered does stand out from other ICOs. This sometimes comprises professional brand, community buzz, and extensive marketing efforts. For the purposes of promotion, the team may be expanded with specialists in the fields of web development, public relations, social media management and other marketing services. Customer support trained and in place will also ensure ICOs success.

Finally, any challenge described above can be surmounted with the company’s time and efforts. To this end, one has to thoroughly consider all of the possible obstacles and undertake relevant measures for their solution in advance.