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 to be the mixture of conventional methods and advanced techniques. The most important thing to keep in mind here is that investors who invest in the ICO will be left 100% risk free due to the technology used.

To date, most ICO funds have been raised using Bitcoins (BTC) or Ether (ETH). During the ICO, the project produces a Bitcoin or Ethereum address to receive funds and then displays it on the corresponding website. The procedure is the same as opening a bank account and then showing it on a specific website to people so you can send money.

Initial coin offering (ICO) is basically an illegal way to collect crowdfunding through various cryptocurrencies (trust currencies in some cases) and cryptocurrency organizations work to obtain the capital funds needed to execute the project. In an ICO, a specific portion of the newly issued cryptocurrency is sold to investors in exchange for any legalized bidding or any other cryptocurrency. It can be said that this is a token sale or mass sale which consists of withdrawing the investment from the investors and providing them with some functions associated with the project to be launched.

IPO, that is, the initial public offering is a process related in some way to the ICO in which investors receive shares owned by the company. While in ICO, investors buy company currencies that can increase in value if the business is amplified.

Mastercoin made the first sale of tokens, i.e. an ICO in July 2013. Ethereum raised money through an ICO in 2014. ICO has adopted a completely new definition in recent years. In May 2017, there were approx. 20 bids, as well as 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 coin sales worth $ 1.1 billion had been made as of January 2017.

Investors send Bitcoin, Ethereum, or any other cryptocurrency to the address provided and in return get new tokens that can benefit them greatly if the project succeeds.

  • The ICO is basically done for cryptocurrency-based projects that are based on decentralized techniques. So, of course, these projects would require only those investors who have a keen interest in the concept of cryptocurrency and who are friendly with the technology used.
  • In fact, the document that belongs to an investor is kept in the form of a website, white paper or web publication. Some of these documents show exact details about the project, if any others literally falsify its features to deceive those concerned. Therefore, before relying on any white paper or electronic document, it is best to do a quality check.