Cloud technology has become very valuable for countless industries. It is estimated that around 94% of enterprise businesses use the cloud.
One of the industries that is most dependent on cloud technology is the cryptocurrency sector. Companies in the cryptocurrency sphere are using the cloud to host Initial Coin Offerings to get their projects off the ground. There are both benefits and drawbacks of this approach. Keep reading to learn more.
What Impact Does the Cloud Have on the Cryptocurrency Sector?
Many people wonder what role cloud technology has on cryptocurrency. Marc Weaver, an AWS certified architect, writes that this is one of the questions that he is most often asked.
Weaver states that it is not recommended to use cloud technology, even AWS hardware systems, to mine bitcoins. However, there are a lot of other benefits of leveraging the cloud for cryptocurrency users.
One of the biggest applications of the cloud is that it can be used to store bitcoins. Many cloud companies like Filecoin use cloud technology to help users store their coins.
Cloud technology has also made it easier for cryptocurrency companies to spread the word about their projects.
How Does the Cloud Affect ICOs?
An ICO, or Initial Coin Offering, is a type of funding mechanism, which is primarily utilized by a Crypto project. And how does it work? Well, for one, it gives an organization enough financial backing to start their venture and work their way up. In some cases, it can also work as a type of advertising for a brand-new Cryptocurrency coin.
Now, you may ask, “why would people buy them, really? What’s in it for them?”
You are probably also wondering what role cloud technology has on ICOs.
To begin with, many people tend to opt for an ICO to support a promising project. And, once the organization is launched, they can buy whatever they want with the coin. There’s no need to pay anything with their money at all. Sounds pretty fun, right?
Well, in one way, ICO is, indeed, quite beneficial for an organization. However, there’s a little bit of risk entangled with it as well. Keep reading to learn more about it.
So, how can cloud technology influence an ICO? The truth is that the cloud makes it easier to store bitcoins. A 2014 article in InfoWorld showed that cloud storage was becoming prominent. Companies running ICOs can easily store their cryptocurrencies on the cloud.
Benefits Of Initial Coin Offering Over the Cloud
When it comes to an organization, an initial coin offering event run over the cloud can be quite advantageous for them. Let us tell you how.
Huge Investment Opportunity
Undertaking an initial coin offering can help you get the whole world investing in you. You can leverage cloud communications to reach millions of people and get them to invest in it. Thus, it will be easier for you to get an enormous amount of money and kickstart your business.
You can launch your own trading platform or use an existing option like BitAlpha. We would ask you to opt for the latter, as it’s proven both in terms of security and efficiency.
The “Publicity” Purpose
An initial coin offering event tends to be quite large and effective. Hence, if you can organize it perfectly, you can garner the attention of a massive user base.
However, if you want, you can also publicize the whole event on social media to improve the recognition level even more. Just do it in the right way, that’s all.
The Quickness
The popularity of an initial coin offering event spreads like wildfire. And, the more people do get to know about it, the more they’ll talk, and the more publicity it will get.
Hence, with an ICO in place, you can raise a massive amount of fund within a week or so. All you need to do is present an exciting opportunity for them, and that’s that.
Disadvantages Of Initial Coin Offering
Although it might seem great and all at the beginning, a failed ICO event can also bring your demise. Keep reading to know more about it.
The Issue with Volatility
With ICO, the fund you’re raising right now can be highly volatile. For example, let’s say, you’re selling a coin at one US dollar now.
But, once it gets popular, its cost will increase by quite a mile. Therefore, when you’re selling your product, you might not get the worth you’re looking for.
Not Getting Enough Popularity
An ICO event, if not advertised properly, can go horribly wrong. If you’re too unfortunate, in the end, you mightn’t get enough exposure to market your business.
It, in turn, might end up you suffering a massive loss, especially if people don’t purchase the coins at all. Hence, garnering an adequate amount of popularity will be much needed for you.
Higher Investment
If you’re opting for an ICO, you don’t really need to have a huge amount of money backup at all. However, if you want to create your own Crypto, you have to invest in the technical dept. of your organization to some extent. And, for some people, that might require a lot of cash.
So, before you splash all of your cash, you must keep an eye on your market as closely as you can. Or else, if you’re unable to sell enough coins, you might end up losing everything.
If you are using powerful cloud services, it can cost even more. A good, secure cloud infrastructure is not cheap. You will have to invest a lot in it.
Security Concerns
There are a lot of great selling points of cloud technology. Unfortunately, security is not one of them.
Cloud-based services are subject to cyberattacks. This is one of the reason that bitcoins stored on the cloud are often easily stolen. The DOJ recently recovered stolen bitcoins from the Bitfinex Hack that were hosted in the cloud. Unfortunately, criminals can steal them as well.
The Cloud Creates Opportunities and Risks for ICOs
Like everything else, initial coin offering, too, has a white and a dark side to it. There are additional risks and benefits when you are organizing it over the cloud.
Hence, if you want to strategize your business alongside it, we’ll ask you to be as careful as possible.
It’s best not to make any rash decisions by yourself.
Instead, look for an investor, ask them about how they feel about your idea. If it’s decent, he or she might be interested in funding your movement.
So, you won’t have to worry about any losses and all.