ICO has proven to be a revolutionary way for many companies and projects to raise money. ICO can be said as the mix of conventional methods and advanced techniques. The important thing to consider here is that investors investing in the ICO are 100% risk free due to the technology used.
So far, most ICO funds have been collected through Bitcoins (BTC) or Ether (ETH). While running the ICO, the project produces a Bitcoin or Ethereum address to receive funds and then displays it on the respective web page. The procedure is the same as opening a bank account and then presenting it to people on a particular web page so that they can send money.
Initial Coin Offering (ICO) is basically an illegal way to collect crowdfunding through various cryptocurrencies (in some cases fiat currencies) and is operated by cryptocurrency organizations to obtain the capital funds needed to carry out the project. In an ICO, a certain portion of the recently issued cryptocurrency is sold to investors in exchange for a legalized tender or another cryptocurrency. It can be said as token sale or crowd sale where the investment amount is taken from investors and given them some features related to the project to be launched.
IPO i.e. an initial public offering is a process somehow related to ICO where investors receive shares in the ownership of the company. While in ICO, the investors buy coins from the company which can increase in value if the company is strengthened.
The first token sale, or an ICO, was conducted by Mastercoin in July 2013. Ethereum raised funds through an ICO in 2014. ICO has adopted an entirely new definition in recent years. In May 2017 there were about 20 offers, and also a recent web browser Brave’s ICO generated about $35 million in just 30 seconds. As of the end of August 2017, a total of 89 ICO coins worth $1.1 billion had been sold as of January 2017.
Investors send Bitcoin, Ethereum or any other cryptocurrency to the address provided and in return they get new tokens that can bring them great returns if the project is hit.
- ICO is basically run for cryptocurrency based projects that rely on decentralized technique. So it makes sense that such projects force only those investors who have a keen interest in the concept of cryptocurrency and are friendly with the technology used.
- Indeed, the document belonging to an investor remains in the form of a web page, whitepaper or web post. Some of these documents show exact details about the project, or some others literally falsify its functions to mislead those interested. So before relying on any white paper or e-document, you’d better go through a quality check.