«Thats whats happening to todays ICOs. They are raising an eye-watering amount of funds (over 1 billion in 2018 alone), but once the funds are in their wallet, its incredibly hard to use them in a practical way.
Here are the two critical issues: liquidity and volatility. The former breaks down like this, I raise $1 million in ETH but I cant use it to pay my rent. The latter, I raise $1 million in ETH but its value could drop drastically in the same afternoon. Now Im asking myself
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Read full post: https://medium.com/@globcoin_io/what-can-icos-learn-from-the-electrification-of-cars-326ee5a63139Liquidity is one of the reasons why most ICOs only accept the most popular cryptocurrencies, like Bitcoin & Ethereum.
It's because those top cryptos can be sold for fiat currencies quite easily. These fiat currencies can then be used to pay for the expenses.
Volatility is a true killer, but I think most ICOs sell at least a part early on to avoid failure due to extreme price crashes.
Besides, the cryptocurrencies they raised could also show significant growth, which would allow the project developers to get even richer. (Or they could spend it on the project... Though I'm quite sure most of the project creators wouldn't mind some extra pay)
So I feel like it's not that hard to use them in a practical way. By simply raising the top few cryptocurrencies, they can easily sell them and they're usually reasonably stable too. Growth also allows for some nice additional profits.