CNBC Ethereum Coin Overview Video
One of the very first ICOs was for a cryptocurrency platform called Nxt, launched at the end of 2013. It was a bold idea for its time: a platform that would allow anyone to create their own tokens and trade them on a peer-to-peer exchange, as well as send encrypted messages and more. It collected just 21 bitcoins - then worth around $21,000. Nxt laid the groundwork for much that followed, but it was of its era: groundbreaking but somewhat clunky.
The gold standard for blockchain crowdfunding was Ethereum, which held its ICO in the summer of 2014. A smart contracts platform that executes code automatically, trustless and unstoppably, similar to what bitcoin does for money, Ethereum raised $18 million in bitcoins over the course of a month. It was an early success story for ICOs, and the Ethereum platform has gone from strength to strength on the back of that funding - it’s currently the second largest blockchain application, with a market cap of over $20 billion.
Buoyed by this precedent, ICO season began in earnest. When the bitcoin markets turned around and the currency began rising in value, interest surged. 2016 was a year of huge ICOs, and 2017 looks set to beat it hands down.
One of the biggest ICO stories of 2016 was Waves: a ‘custom tokens’ platform designed to allow anyone to crowdfund and launch their own token. Although this was already possible on Ethereum (and even older blockchains like Nxt, which in its heyday had a thriving multi-million-dollar ICO scene), Waves - tag lined ‘blockchain for the people’ - was designed to make it truly easy and intuitive. The project enthused the community enough to collect 30,000 bitcoins, or $16 million at the time.
Today, many of the top projects launch their ICO tokens on either Ethereum or Waves. Hundreds of millions of dollars of investment have poured into ICOs on these platforms - though rather more on Ethereum to date, reflecting its larger community and market cap, and its head start over Waves. Just a few of the success stories have included the browser advertising application Basic Attention Token or BAT, an Ethereum project which raised $35 million in Ether (ETH) in less than a minute on 31 May; decentralized organizations management system Aragon (Ethereum, $25 million on 17 May, under 15 minutes); the Gnosis market predictions app (Ethereum, $12.5 million in April); private VoIP app EncryptoTel (Waves), which secured $4.5 million over the course of a month - the list goes on and on.
There is a growing trend towards using the Waves and Ethereum blockchains, for the sake of redundancy and leveraging both Waves and Ethereum communities. "MobileGo", an initiative that will promote cryptocurrency payments among online gamers, recently raised a record-breaking $53 million this way. Neither is it only cryptocurrency or internet-based projects anymore. ICOs are moving into the realm of normal venture capital, resourcing real-world businesses. "ZrCoin" recently crowdfunded over $5 million on Waves to start an eco-friendly production plant for zirconium dioxide, a key industrial material.