Instead of giving up shares, many startups are now raising finance by issuing their own blockchain-based crypto coins to investors around the world.
The US, Singapore and Switzerland are currently the leading jurisdictions for entrepreneurs considering where to launch their ICOs, although all governments are still figuring out how to regulate ICOs.
Unfortunately for both entrepreneurs and investors, that means ICOs continue to operate in what could be described as legal grey areas at best, while the lack of clarity and trust is holding back the benefits of this innovation in finance.
Despite this, the amount of money being raised globally by startups through ICOs is now far in excess of the amount being raised through venture capital.
Raising finance is only half the story of ICOs though.
People who invest in crypto tokens issued by a startup are then strongly incentivised to support the development of that startup in other ways too and they tend to form an online community.
(adsbygoogle = window.adsbygoogle || []).push({});
We could have developed the idea behind closed doors first, but openness has always been the best policy for developing the e-Residency programme.
Starting an open discussion at the earliest possible stage has been useful to gather both the feedback needed to refine the idea and the support needed to proceed with it. Both the supporters and the critics have been invaluable.
My initial assumption was that the crypto community would be the most critical of any government involvement in their sector, but the opposite was true.
Entrepreneurs and investors within the crypto world expressed enormous interest and largely seemed to welcome the idea, while traditional institutions were the most critical. Even European Central Bank President Mario Draghi voiced his concern.
It’s an extremely high risk. I’ve actually sold all my bitcoins recently and switched to bitcoin cash.
It costs a lot to transfer bitcoins to and from the stock exchanges. When I sold my BTC I had to pay $50 and wait 12 hours for the transaction to go through because of this.
