The new trend in the Crowdfunding market is ICO’s. Many companies want to get involved with the cryptocurrency trend and make a profit. However, what if you wanted to create an ICO, but did not have the capacity to do so? It may not be as easy as some may think to create an ICO. According to Merunas’s Medium article, an ICO can cost up to $60,000 to create.
The cost of an ICO
Below are all the essential costs associated with creating an ICO. For the purpose of this article, this complete process has been shaved to a minimum and explained in a general sense. This way you can quickly discover all of the costs associated with the creation of an ICO. It becomes apparent that not all companies will have the capital to run such an operation. The purpose of creating the ICO is to gain capital from the public so that a product or service is possible to create. But only those that already have the essential funds can run such an ICO. It can be a big risk, with a big reward. You can see that many of the most funded Crowdfunding campaigns are using the ethereum ecosystem to gain hundreds of millions in funding. In addition, for this example we will assume you are using ethereum.
There are several costs when it comes to creating an ICO. First, you need to have a website for your investors to go on. If you want a good website developed, it will cost you. In general, most of the best sites are designed by hand or using frameworks, rather than using such CMS sites as WordPress or Drupal. You will want something that is designed well that can encapsulate the experience of your product or service to the potential investors. A website coded by hand can cost in the thousands. Once that is figured out, you can then move on to the whitepaper. This needs to be written by those who are launching the ICO. It will have all of the details outlined about the ICO in it. This may be another expense if you are going to pay to get it reviewed. Next, is the ERC20 contract. This is a contract that sets particular rules about that the cryptocurrency has to follow, and is considered a smart contract. The ERC20 contract helps with the development when using the Ethereum ecosystem. Of course this likely will become another expense as Ethereum developers are hard to come by, and can be quite expensive. The other smart contract that is essential to create is called the Crowdsale ICO smart contract. Another smart contract that will allow you to distribute the tokens among your investors. Also, another big expense that costs in the thousands. Once these smart contracts are created, there needs to be an audit. This is the last essential costly component of the cryptocurrency that needs doing, the rest of the costs are optional based on how you market the ICO. If you are not already aware, marketing an ICO is not going to be cheap. If you want to break even, you will likely have to raise over $60,000 depending on how much you paid just to get the ICO launched.
For some companies, this type of funding process is not realistic. Not everyone has the capacity to spend tens of thousands of dollars for the creation of an ICO, not to mention how much needs to be raised to break even, and further need to be gained for production of the product or service that the company intends to sell. Although it is a big trend, and many investors like the idea, many will have to look for alternative funding.
What is the closest campaign to an ICO?
The closest form of funding to an ICO is a Crowdfunding campaign. Although this may not seem as interesting as utilizing the cryptocurrency method, it has many advantages. First, it is not nearly as expensive to run Crowdfunding campaigns as it is to launch an ICO. There are particular tools developed to help companies that cannot afford to run an ICO that will be mentioned later on in this article. The typical Crowdfunding campaign has been around for longer than the ICO concept, which means there is more information offered to the public on best practices to run such a campaign. As previously stated, it is hard to find ethereum developers as it is a new concept, and learning such development is very limited. Developers need to “jump through many hoops” to get the desired end result. If one utilizes the type of information and tools that are available, you can create something as new and interesting as an ICO for less money. More research has been conducted to perfect he Crowdfunding campaign and can be easily accessed by anyone. There is no need to hire any developer to create a Crowdfunding campaign. It is possible to find success with a small team of people or even an individual using the right methods as explained online. Although it is cheaper than running an ICO, you still need to spend money using this type of method. You will not, however, have to be spending in the ballpark of $60,000 just to get started. You may already have knowledge of what a Crowdfunding campaign is, and how it can be run. This article is created to give a new idea to the public that can be similar to the ICO concept.
The concept and idea
What if you could run a similar campaign to an ICO through Crowdfunding? The idea is to run a rewards-based Crowdfunding campaign, which will offer credits for the rewards. Much like offering tokens/cryptocurrency, these credits will allow users to purchase a certain amount of credits to be used later on for purchasing the product. They can be used whenever, or perhaps sold at the convenience of the backer. This way it can be seen as an investment to the backer. They have access to use the tokens later on in any way that is desired. Of course, this is just a suggestion as an alternative for using ICO. If you realized that using a Crowdfunding campaign can be more beneficial for your product or service, here is a blog article that can really break down the concept to help get you started.
If you were to follow through with a concept like this, you would need similar marketing materials as launching an ICO. You need a website, Crowdfunding component added to the site, and rewards based capabilities. This is all possible using white label technology. There are tools created so that you can easily run a Crowdfunding campaign on your website of choice without having to hire any developer. You can save thousands of dollars by using such technologies as Thrinacia Atlas. You can completely control all of the necessary settings needed to create the type of Crowdfunding campaign needed for your Crowdfunding campaign. The best part is that you can receive this product at only $39.99 per month. Instead of paying 5% – 15% of your donations to a platform that limits the type of campaign you are running, you can take 100% of the donations to your campaign. If you need to add the Crowdfunding component to your website, just copy and paste the HTML code on to your site. This technology saves the average Crowdfunding campaign thousands of dollars and allows you to gain access to a vast amount of features.
If you are deciding to use the concept as mentioned above, or simply run a Crowdfunding campaign, be sure to take a look at the inexpensive tools that can help your campaign become successful. Don’t waste the time and effort searching for ways you can create an ICO for really cheap, as you will not get the type of results needed to gain enough funding. There are Crowdfunding options available for any size company or individual. For those looking to gain more knowledge about Crowdfunding be sure to visit Thrinacia’s blog.