What is an ICO and how does it work?

ICO has proven to be a revolutionary way to raise money for many companies and projects. ICO can be said as a combination of conventional methods and advanced techniques. The main thing to keep in mind here is that investors investing in ICOs will be 100% risk free due to the technology used.

So far, most of the ICO funds have been raised through bitcoins (BTC) or Ether (ETH). While running the ICO, the project creates a Bitcoin or Ethereum address to receive funds and then displays it on the appropriate web page. The procedure is the same as opening a bank account and then presenting it on a specific website to people so that they can send money.

The initial coin offering (ICO) is essentially an illegal way of raising crowdfunding through various cryptocurrencies (fiat currencies in several cases) and is operated by cryptocurrency organizations to obtain the capital needed to implement the project. In the ICO, a certain part of the recently issued cryptocurrency is sold to investors in exchange for a legalized auction or other cryptocurrency. It can be said as selling symbols or selling to a crowd, which involves taking an investment amount from investors and providing some features related to the project that will be launched.

IPO, i.e. Initial public offering is a process related in some way to ICO, in which investors receive shares owned by the company. While at ICO, investors buy coins from the company, which can increase in value if the business grows stronger.

The first sale of symbols, ie. ICO, was conducted by Mastercoin in July 2013. Ethereum raised money through ICO in 2014. ICO has adopted an entirely new definition in recent years. In May 2017, there were about 20 offers, and Brave’s recent web browser ICO generated about $ 35 million in just 30 seconds. By the end of August 2017, a total of 89 sales of ICO coins worth $ 1.1 billion had been made as of January 2017.

Investors send Bitcoin, Ethereum or another cryptocurrency to the given address and then in return receive new tokens, which can bring them great benefits if the project is hit.

  • ICO is mainly conducted for cryptocurrency-based projects that rely on decentralized technology. So, naturally, such projects would force only those investors who have a great interest in the concept of cryptocurrency and are friendly to the technology used.
  • The document that belongs to an investor really remains in the form of a web page, a white paper or a web publication. Some of these documents show exact details of the project, whether or not some others are literally falsifying its features to mislead stakeholders. So before you rely on any white paper or electronic document, you better go through a quality check.