Two Premier League soccer teams are hoping to bolster their failing finances by hosting initial coin offerings (ICOs). With 2018 proving to be a breakout year for crypto-based fundraisers, more and more companies are now trying to capture a slice of the $12 billion+ ICO market. As per a report in The Times newspaper, Newcastle United and Cardiff City are the latest players in the ICO market.
Partnering with SportyCo, a decentralized sports investment company, the two teams will use their digital token sales to help offset their recent financial struggles. For many, the natural question from the latest headlines will be: what is the Newcastle United ICO/Cardiff City ICO? Ever since Bitcoin laid out the blueprint for creating and running a decentralized blockchain, hundreds of projects have followed suit.
Creating a Crypto is Easier than Ever
Today, almost anyone with a concept and a blockchain can create their own coin. Many companies have chosen to launch their ICOs on the Ethereum network as it’s one of the most accessible for app developers. However, almost any decentralized platform can offer a crypto-based solution for businesses. Indeed, as Kodak has shown us, Stellar is an emerging force in the ICO world. Despite using Ethereum’s ERC-20 token to create KodakCoin, the company has based its digital rights management app on the Stellar network.
What all this shows is that creating and selling digital tokens is starting to become common practice. Indeed, if a company can develop an app on one of the leading blockchains, it can then launch a coin to go with it. Once company X has a coin, they can host an ICO and raise funds. The real issue for investors is the incentives they receive and the long-term value of this new wave of cryptocurrencies. Research by the Statis Group has already shown that the average ICO register in 2017 contained more “scams” than legitimate projects.
Buyer Beware: Not All ICO Sales Are Profitable
Although the definition of scam included coins that weren’t listed on exchanges rather than anything malicious, the data showed that 80% of listings were worthless. With so many ICOs launching every month, this only seems natural. For those looking to invest in the Newcastle United ICO or Cardiff City ICO, this has to be taken into consideration. The two clubs have promised that investors will receive a small share in the club and/or other rewards for buying each respective ICO cryptocurrency. However, there’s no guarantee that investment will show a profit.
While the use and application of decentralized technology is great, there is a danger its value is being watered down. Because it’s easier than ever to join an ICO list, everyone is doing it regardless of whether it’s a good idea or not. Only time will tell if the Newcastle United ICO/Cardiff City ICO will be worth it. However, there’s no doubt that investors need to tread carefully in what’s becoming an increasingly saturated ICO crypto market.
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