How to Remove Scammers from the ICO Market? Review of ILP Funding
The ICO market is developing by leaps and bounds. If for the whole of 2017 all start-ups attracted a little more than $3 billion, then just for 5 months of 2018 this figure reached 13.7 billion. This method of collecting investment is fairly simple and very convenient for all parties. But it has a downside: the fact is that along with honest teams in the market there are a lot of scammers who simply take money from trusting investors. An unprofessional investor has a much higher probability of getting trapped than getting a profit. The ICO market does not have any administrative control, regulatory rules and verification. In this article we will talk about one of the options for solving this problem, namely ILP funding. Contents: (please, click the topic to scroll down to it)
1. What is ILP?
This alternative to IPO in the crypto world (and not only) was first proposed by the international company Tokenote. The abbreviation ILP stands for Initial Loan Procurement. To eradicate fraudulent schemes, all participants (both borrowers and creditors) undergo a procedure for verifying the identity through a digital ID. Only after this the borrower can create smart contracts, and creditors (investors) make investments. Directly crowdfunding takes place on the Blockhive platform, where internal currency is the HIVE token. The main idea of the developers is the modernization of the ICO market and the elimination of its main shortcomings.
2. The main advantages of ILP
- Combining the simplicity of the ICO and the legal responsibility of the parties. Clever contracts in this concept are signed by means of a digital signature, so they have legal force, and then they are stored in the blockchain.
- All procedures meet the necessary requirements of international law, therefore ILP provides for prevention of money laundering schemes. This is achieved through verification and authentication of all participants in the process.
- One of the main differences between ILP and ICO is the lack of funding based on tokens. The fact is that within the ICO, start-ups, in pursuit of initial investments, can release an unlimited number of tokens, creating a glut in the market. In ILP, there are loans, not tokens, so the problem of inflation is solved by itself.
- Due to the fact that investments are fixed in the legal field under the guise of loans, they cannot be taxed. This is a huge plus, as in our time in many countries there are quite impressive taxes on the cryptocurrency.
- Within ILP, investments are protected from speculative schemes, as investors derive their profits from the company's real revenues, rather than from the artificial increase in the price of tokens.
- ILP funding need not necessarily be related to cryptocurrencies, this method of attracting investments is much more universal than ICO (private companies, government structures, etc.).
3. Forecasts for the development of ILP
This method of issuing digital credits can potentially have a great future, since ILP is as simple as ICO, but it has a much greater range of functions, and is also in the legal field. For this reason, ILP is unlikely to be prohibited even in such countries as China, where the ICO is banned.
The ICO market is certainly one of the most highly profitable investment instruments in our time, but due to the lack of regulation, there are a lot of scammers here. A novice investor has virtually no chance of succeeding in this field. ILP is one of the solutions to the problem of fraudulent schemes in this area. Subscribe to The Coin Shark news in Facebook: https://www.facebook.com/coinshark/