The emergence of cryptocurrency exchange platforms and websites where you can buy, sell, or exchange cryptocurrencies has absolutely everything to do with the recent phenomenon of initial coin offerings (ICOs). Through ICOs, companies and organizations are introducing their crypto-assets, also known as tokens, to the public and in the process are creating a new form of tradable digital asset, only made possible by Blockchain technology.
By conducting a fundraising event based on token sales, startups are able to further finance the development of their projects without relying on traditional venture capital. In fact, funds raised through ICOs have reached nearly four times the amount of money Bitcoin companies have raised in venture capital dollars just this year. According to PitchBook, ICO investments rose from $26 mln in 2014 to almost $1.3 bln in 2017, while traditional Blockchain companies saw only $358 mln in VC money over the same period of time.
As more and more projects raise funds through the launches of platform tokens (ICOs), the number of tokens in the market is increasing, and investors in Blockchain companies and contributors to the various projects are acquiring a variety of tokens as part of their investment strategies. Unfortunately, limited options to liquidate all of these tokens in the market makes convertibility of one token to another a real challenge for both investors and operators alike.
One of the reasons behind this comes from the fact that most of the popular centralized exchanges require reserves of the tokens that they are trading. If a person wants to buy or sell a token that isn’t common, that person would have a hard time doing so because a token of this type is usually not supported by major centralized exchanges.
Full story at http://bit.ly/2xR24zv
Source: CoinTelegraph
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