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Speculation Driving Boom in Blockchain

Blockchain, Finance, ICO

Based on a survey of 400+ blockchain entrepreneurs, investors and developers, the report highlights key findings in what analysts believe is one of the industry’s most exciting – but opaque – markets and applications.

CoinDesk Research is proud to reveal the results of its first ‘Spotlight Study’ of 2017: a free, in-depth look at the current state of blockchain token sales, a fundraising and product distribution process often colloquially referred to as an ‘initial coin offering’ (ICO).
Based on a survey of 400-plus blockchain entrepreneurs, investors and enthusiasts, the report highlights key findings in what analysts believe is one of the industry’s most exciting – but opaque – areas of innovation and growth.

Most notably, perhaps, the popularity of ICOs continued to gain traction in 2016 as total funds diverted to such projects approached half (48%) of the industry’s total venture capital funding.

While a large portion of this capital was invested in a single, failed project, The DAO, we believe the figure nonetheless hints at the potential of this growing – and admittedly opaque – sector of the industry.

The results also revealed the start of an evolution in the type of funding coming to market, with companies and protocols like Factom exploring raising funding from both traditional venture investors and the retail public.

Two sides of the coin

In the study, CoinDesk Research tapped into its large network of accelerators, venture capital firms, independent entrepreneurs, cryptocurrency enthusiasts and investors to get an idea of overall market sentiment, as well as the contrast between the ‘entrepreneurial’ and ‘investor’ perspectives on the ICO phenomenon.

Our ‘entrepreneurial’ segment was comprised of mostly (86%) those working at startups with less than 10 employees or $1m raised or in the bank, while a vast majority (89%) of our ‘investor’ segment had significant experience investing in bitcoin and examining ICOs for their personal portfolios.

Entrepreneur results were analyzed to get a perspective of how startups are looking at token sales for potential fundraising options, while ‘investor’ results were analyzed to get a perspective on the other side of the market – the actual purchasers of new blockchain tokens.

This group included retail investors and institutional capital, and all the reasons they may be investing in an ICO – whether to interact and use a new blockchain protocol or application, or purely in an attempt to profit from token value appreciation.

Despite the potential allure of fundraising for, or investing in, emerging blockchain projects with token sales, both the industry and the ICO trend are still very much in their infancy, and entrepreneurs and investors show a mixture of caution and interest when considering naming conventions, token structures and legal frameworks, as the results of our survey indicate.

Initiatives are also developing to help inform and guide those considering token sale launches, and the thoughts behind published ‘core principals’ have started to shape the minds of those getting involved.

 

Read the full article at the source site : http://www.coindesk.com/coindesk-research-ico-interest-grows-funding-nears-50-blockchain-venture-capital/

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