2018
DOI: 10.4236/jfrm.2018.74022
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Initial Coin Offering and Cryptocurrencies: Shifting Trust Away from Human Actors and toward a Cryptographic System

Abstract: Initial Coin Offering (ICO) has become global. Cryptocurrencies are offered to finance projects in the blockchain arena. This crypto-phenomenon challenges traditional capital raising and investment mechanisms and many strongly believe in its potential. This paper analyses some key characteristics of ICOs and investigates potential risks. It also examines the shift from traditional mechanisms to "cryptos" and studies several features of blockchains. An overview on trust is provided to detect some trust-enhancin… Show more

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Cited by 4 publications
(4 citation statements)
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References 193 publications
(93 reference statements)
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“…Investors in cryptocurrencies can be positioned as consumers and sellers of cryptocurrencies as business actors. 10 The volatile nature of cryptocurrencies, which cannot be controlled and exist solely in cyberspace, exposes crypto investors to a number of risks, including: first, hacking, which is a crime that intentionally and without rights accesses the internet and/or electronic systems without the permission of the owner in any way by violating, breaking through, or breaking into the security system. Second, cracking is an act of changing, adding, reducing, transmitting, destroying, deleting, transferring, or hiding information or electronic documents belonging to the victim.…”
Section: Resultsmentioning
confidence: 99%
“…Investors in cryptocurrencies can be positioned as consumers and sellers of cryptocurrencies as business actors. 10 The volatile nature of cryptocurrencies, which cannot be controlled and exist solely in cyberspace, exposes crypto investors to a number of risks, including: first, hacking, which is a crime that intentionally and without rights accesses the internet and/or electronic systems without the permission of the owner in any way by violating, breaking through, or breaking into the security system. Second, cracking is an act of changing, adding, reducing, transmitting, destroying, deleting, transferring, or hiding information or electronic documents belonging to the victim.…”
Section: Resultsmentioning
confidence: 99%
“…People tend to trust others when they explain why they do what they do [43]. Similarly, users understand a system better when the purpose and the process of a system are transparent to them.…”
Section: Enhancing Trust In 'Black Box' Technologies By Explanationmentioning
confidence: 99%
“…These exchanges, such as Coinbase and Gemini, allow users to buy and sell Bitcoin in a regulated and secure environment. They are subject to strict government regulations and must comply with anti-money laundering and know-your-customer requirements (Bouchagiar, 2018; "Initial Coin Offerings (ICOs): Risks, Regulation, and Accountability.," 2018). Bitcoin's growing popularity has also attracted the attention of governments and regulators around the world.…”
Section: Bitcoin Goes Mainstreammentioning
confidence: 99%