When Satoshi Nakamoto launched Bitcoin in 2009, it stood alone as the first and the only digital currency. By the time Ethereum, the second most popular cryptocurrency by market cap, launch in 2015, the proverbial cat was out of the bag. Today, there are hundreds of digital currencies that serve a wide variety of purposes, and more new cryptocurrencies are launching at a dizzying rate.
According to data compiled by CoinSchedule, there were 211 ICOs in 2017 that collectively raised almost $4 billion. In 2018, that pace has not slowed down. After just two months, there have already been 42 initial coin offerings (ICOs) that have raised nearly $1 billion. In August, CNBC reported that ICOs had surpassed early-stage VC funding as a capital raising strategy.
It’s no wonder that so many companies are turning to ICOs as an alternative method for raising necessary startup funds. ICOs are cheap, easy, and, most importantly, extremely effective. As the Wall Street Journal declared in July, “Forget an IPO, coin offerings are [the] new road to startup riches.”
Of course, ICOs are not entirely foolproof. For instance, some ICOs are being criticized for overpromising on their platforms’ potential but under-delivering on its actual capabilities. Meanwhile, others are being outright labeled as scams. These ICOs are suffering from the moral ineptitude of their leaders and developers, which is cause for concern but doesn’t compromise the validity of the ICO process itself.
However, honesty and integrity aren’t the only things needed for a successful ICO. Digital currencies must be technically competent. It seems obvious that platforms running on the forefront of the technology landscape must be technologically sound, but buggy code is causing some ICOs to fail, and it’s costing investors and platforms millions of dollars.
CoinCodex, a website dedicated to following the cryptocurrency industry, estimates that “in the last 7 months more than $500 million worth of cryptocurrency was wasted because of bad code.” While the estimates vary, the truth is established: buggy code is an unacceptable flaw that is costing ICOs money and is causing investors to question the efficacy of the practice.
So, when planning your ICO, be sure to follow these steps to avoid screwing up your token launch by having buggy code on your platform. Everyone, even you, will benefit from sound platforms that proliferate the possibility for ICOs as a valuable capital raising strategy.
1. Collaborate with Other Professionals
Building a successful ICO is not a solo sport – even for companies with large development teams. Therefore, successful ICOs should employ an outside auditing firm to verify the ICOs’ code.
Although many companies want to avoid these costs before an ICO, the cost-reward, in this case, cannot be ignored. In other words, a little investment in auditing services before an ICO launches could save a significant amount of money later in the process. As LiveBitcoinNews recently noted, “The smart contract audit should include GPG verification for all commits on software repository Github.”
By hiring outside help, you are employing someone with a financial incentive to locate any flaws in your code, and you’re receiving unbiased affirmation that your platform is sound. That information can give confidence to your development team and your future investors.
2. Employ Mindful Leadership
When launching an ICO, building a leadership team is one of the first places to start. While experience, proven skill sets, and temperament are essential components of a healthy leadership team, it’s also worth exploring a candidate’s commitment to security and technological competence.
For instance, a leadership team bent on growth at any cost is likely to ignore security-oriented red flags. Make security and quality code a priority in your hiring process, and you will be well on your way toward developing a platform that bug-free and ready to flourish.
3. Never Be Satisfied
The ICO scene is one of the most forward-thinking and innovative areas in technology. New ideas and platforms are emerging every day, and it’s easy to get caught up in the exuberance of the launch. This is a good thing. The blockchain will be built upon these ideas, and their developers should be excited. But they should never be satisfied.
Even after your ICO is fully audited and your team is compiled of security-minded leaders, continued vigilance must be a continuous priority. The ICO community is large, and they are vocal. Listen to the feedback on your internet channels, solicit ideas for improvement, and, most importantly, always be on the lookout for ways that your software may be buggy.
In some ways, buggy software feels more like an inevitability than a possibility, so be ready to fix mistakes when they arise.
In doing so, you protect your compelling platform from future liabilities, and you may even save yourself from being the victim of the next multimillion-dollar heist resulting from bad code. Ultimately, by taking the proper steps, buggy code is a solvable problem, so don’t screw up your ICO by embracing apathy over intentionality.