Digital Assets
Encrypted Currencies or “cryptocurrencies” have seen serious development and iteration within the last 8 years, starting with bitcoin in 2008. Bitcoin started as a thread on an email list from a mysterious creator (or group of creators, no one knows for sure) who suggested a white paper on digital cash. From this point, it went from relative obscurity to a force in the economic world with a multiple billion dollar market cap.
An alternative currency (also known as altcoin) is any coin except for Bitcoin, and there are hundreds of them. Many of them have no merit whatsoever and are merely a fork of another currency. (A fork means the code repository was “forked” or copied and new development was started from that point, as opposed to built from scratch for a specific purpose).
The underlying technology of digital assets is the blockchain, essentially a shared ledger (also known as a shared ledger or a permissioned ledger) that makes it easier to achieve consensus. There are many different projects that utilize blockchain technology, both with and without a native currency.
ICO or Initial Coin Offering is the unregulated means by which a start-up raises funds to start, develop or complete its cryptocurrency or its block-chain based software projects. Avoiding the difficulty and the rigorous and regulated processes to obtain funds through banks or venture capital investors.
Explaining it in a simple way, the startups release tokens on a new cryptocurrency, that investors buy through existing digital currencies, usually Bitcoins or Ethers, or legal tender. So, the start-up can obtain financing for the development of the project. And investors expect those tokens to increase in value and get a high ROI.
If you are an entrepreneur and you wish to start your own digital asset with an Initial Coin Offering, we provide ICO consulting including tax and legal structuring to remain compliant with the laws in various jurisdictions.
Learn more about Digital Assets, Blockchain, Cryptocurrencies and Initial Coin Offerings in our articles below.