The joy of starting a new business always goes hand in hand with a fear of failure. The worst thing: you can lose before you even started. It’s more than possible when only 0.9% of small businesses are funded by venture capitalists and IPOs are accessible only to already established companies. This sounds disappointing, but now we have a new way to fund a company – an Initial Coin Offering or simply ICO.
The best thing about ICO is that everyone can run it. It makes funding of your startup possible regardless of the industry you operate in – any worthy idea might be appreciated. Still, some industries prevail among ventures that choose ICO as the main source of funding or even build their business on the blockchain technology. Let’s discover which ones and why.
*All the numbers are provided by Statista and ICO Watchlist
#1: Finance — 12.87%
The highest share of finance (12.87%) is quite foreseeable, especially if we recall that blockchain was primarily considered a technology to solve financial issues. Only later it started to spread to other industries. And indeed, blockchain can significantly reinforce the positions of a financial company that adopts it. Simplification of cross-payments, greater trade accuracy, transparent transactions, and smart contracts are only the tip of an iceberg among the benefits blockchain brings to finance.
One of the most promising among the ongoing ICO projects of the industry is MyCryptoBank. It bears in mind an idea of a fully decentralized bank, based on cryptocurrency. The virtual bank will offer its clients the same services as a regular bank including currency exchange, money transfers, virtual cards, ATM banking but at much lower fees and the highest possible speed of transactions.
#2: Payments/wallets — 6.81%
Online payment systems and electronic wallets stand to gain from the spread of crypto. More and more ventures lean toward choosing blockchain as a basis of their conception, as its demand increases. The reasons for that are almost the same as in the previous case: instant payments, strong security measures, and peer-to-peer transactions without involving an intermediary.
The example of a crypto wallet that has a great societal impact is Celsius. The project has just raised $50M through their ICO. You can benefit from joining this platform in two ways: borrowing funds in currency using your crypto as a collateral or make money on charging an interest by lending funds to the borrowers.
#3: Commerce/retail and asset management — both 5.81%
Stronger collaboration, enhanced transparency, and greater trust — that’s what a retail company may achieve in the relationships between brands and customers, vendors and employees after embracing blockchain. Aside from the financial part mentioned above, commerce & retail firms may improve their supply chain and inventory management by making the inventory data accessible to everyone involved. The positive effect of blockchain may be combined with other technologies like the Internet of Things to double the productivity. Platforms like TIPO are aiming at making this possible for all businesses worldwide.
Blockchain transforms the asset management industry as well. Especially when it comes to new clients onboarding process since the asset management firms have been highly-regulated and tied to strict security measures. They can extend blockchain infrastructure to the institution needed to verify the client’s identity and check this data faster. Also, blockchain has great potential to replace Automated Clearinghouse and merge trade and clearing. Lastly, such an approach saves funds of asset managers — according to Calastone, the whole trading world could save $2.7BN per day using blockchain.
#4 and #5: Gaming/AR/VR and Betting/Gambling — both 4.71%
Nowadays, there are major 3 ways to apply blockchain in gaming: to use crypto as a reward, as a promotional tool, or to integrate this technology into gameplay and modify it that way. Obviously, the first two are more widespread: for instance, Dragon’s Tale, the first blockchain-related game in the history, uses bitcoin as in-game tokens, while in Cryptokitties you can raise and sell a virtual kitten. It seems to be impossible, but the first kitten was sold for a staggering $115,000.
The majority of the projects inside the gambling industry are positioning themselves as a “future of gambling and betting”. Forget about those casinos that accept cryptocurrency but do nothing new, these startups are promising more. Some of them aim at making crypto gambling fully decentralized, while others are focused on the complete integration of the VR and AR with the online casinos. The great example of the last ones is Alive Casino, an ambitious ICO project that claims to “make gambling come to life”.
VR and AR also don’t stay away from the global trend. A virtual reality project called One Game aim even higher than Alive Casino: the creators are going to “make life come to… life” by developing a highly-customizable self-evolving virtual world.
It worth noting, these industries give birth to the largest number of ICO projects, but it doesn’t mean they raise the largest sums. The #1 industry that raised $4,640,447,641 in total is networking/communication followed by blockchain and finance. Either way, these figures are not final. Blockchain will definitely penetrate every industry in the nearest time, so it’s not so clear which one will be the leading after 5-10 years.
Can you think of other industries that are ripe for ICOs? How will it affect VC funding going forward? Let us know in the comments below.
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