What is an ICO and How Does It Work?

The ICO has proven to be a revolutionary way for many companies and projects to raise money. ICO can be said to be a combination of conventional methods and advanced techniques. The main thing to consider here is that investors who invest in ICOs can be 100% risk-free because of the technology used.

To date, most ICO funds are collected through Bitcoins (BTC) or Ether (ETH). While conducting the ICO, the project creates a Bitcoin or Ethereum address to receive funds and then, displays it on the individual web page. The method is similar to opening a bank account, and then showing it on a particular web page to people so they can send money.

Initial coin offering (ICO) is an illegal way of collecting crowdfunding through various cryptocurrencies (fiat currencies in some cases) and is mobilized by cryptocurrency organizations to obtain the capital funds needed to implement the project. In an ICO, a particular portion of the recently issued cryptocurrency is sold by investors in exchange for any legal tender or any cryptocurrency. Such as token sale or crowd sale which involves taking the investment amount from the investors and giving them some share related to the project to be launched.

An IPO, i.e. Initial Public Offering is an ICO-related process in which investors receive shares of ownership in the company. While in ICO, investors buy company coins that can increase in value if the business grows.

The first token sale, i.e. an ICO was made by Mastercoin in July 2013. Ethereum collected money through an ICO in 2014. The ICO has taken on a new meaning in recent years. In May 2017, there was an estimate. 20 offerings, and also a new 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 coin sales worth $ 1.1 billion had been held since January 2017.

Investors send Bitcoin, Ethereum or any cryptocurrency to the given address and then in exchange, they get new tokens that will give them a lot of money if the project hits.

  • The ICO is basically designed for cryptocurrency -based projects that rely on decentralized techniques. It is therefore natural that such projects will only compel investors who have a keen interest in the concept of cryptocurrency and are friendly to the technology used.
  • The document that belongs to an investor actually remains in the form of a webpage, whitepaper or web post. Some of these documents show exact details about the project, while others literally fake parts of it to mislead those interested. So before relying on any white paper or e-document, it is better to go through a quality check.