What is an ICO and How Does It Work?

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

To date, most ICO funds have been collected through Bitcoins (BTC) or Ether (ETH). While the ICO was created, the project created a Bitcoin or Ethereum address to receive funding and afterwards, it was displayed on each web page. The procedure is the same as opening a bank account, and then displaying it on a specific web page of people so they can send money.

Initial coin offering (ICO) is an illegal way to collect 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 specific portion of the recently issued cryptocurrency is sold by investors in exchange for any legal tender or any other cryptocurrency. It can be referred to as token sale or crowd sale which involves taking the investment amount from the investors and providing them with some features related to the project to be launched.

An IPO, ie Initial Public Offering is a process in any way that can be placed in the ICO where investors can receive part of the ownership of 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 created by Mastercoin in July 2013. Ethereum collected money through an ICO in 2014. The ICO gained a new meaning in recent years. In May 2017, there was an estimate. 20 offers, and another 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 have been generated since January 2017.

Investors send Bitcoin, Ethereum or any other cryptocurrency to the given address and after exchange, they get new tokens that will benefit them if the project hits.

  • ICOs are often created for cryptocurrency-based projects that rely on a decentralized approach. Such is the nature of such projects that can only be forced by investors who have a great interest in the concept of cryptocurrency and are friendly with the technology used.
  • An investor-owned document remains in the form of a webpage, whitepaper or web post. Some of these documents show exact details about the project, while others are literally fake in its appearance to mislead interested ones. So before relying on any white paper or e-document, it is best to go through a quality review.