What is Initial Coin Offering (ICO)

What is Initial Coin Offering (ICO)

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What is Initial Coin Offering (ICO)

An Initial Coin Offering is a Cryptocurrency Token pre-Launching Project.

It is like an IPO in the share market.

But the difference is that IPO is regulated by Government agencies and ICO is currently not regulated by any government or private agencies.

ICO is launched by any crypto or blockchain industry company for Fundraising.

Just like IPO is issued by the company to raise funds before coming on the exchange.

Now let’s discuss more on…

What is Initial Coin Offering (ICO)

  • ICO also works as a medium for any crypto company to raise money to create a new coin, app, or service.
  • It is completely unregulated so many frauds and scams have occurred.
  • During ICO, you will get a token at a very low cost.
  • Lots of people become millionaires due to the purchase of tokens at the time of ICO, this is also a reason to get trapped in fraud ICO projects.
  • Interested Investors and supporters of the project invest in the project and receive a new Cryptocurrency token issued by the company.

How does an Initial Coin Offering work?

When a cryptocurrency startup wants to raise money through ICO, it creates a whitepaper.

Then You can buy a project token with fiat or digital currency.

Now Understand, What is Whitepaper?

The whitepaper is an outline of the project. It gives the information:-

How much money is needed?

How many of the virtual tokens the founders will keep?

What type of money will be accepted?

How long the ICO campaign will run?

20200618062447 What is Initial Coin Offering (ICO)

 

From the Whitepaper, it is also declared that:-

How many tokens will be in Central Monetary System, Team and Advisors, Bounty program, Post Distribution Phase?

Now moving ahead…

One thing is clear that it is an unregulated industry so if you are investing in ICO, there is no guarantee that you wouldn’t be cheated.

But before investing in ICO, you must read the whitepaper of the project.

I will tell you some points here if you find all these in the whitepaper then you can invest in that project.

But I will not give a guarantee that the project is not a fraud or scam.

1. Project developers clearly said about their goals and their words are straightforward, whitepaper should be easily understandable with clear goals.

2. Know the developers.

3. Check legal terms and conditions set for the ICO.

4. Make sure that ICO funds are being stored in an escrow wallet.

  • This is a wallet that requires multiple keys in order to be accessed.
  • This is useful protection against scams, particularly when a neutral third party is a holder of one of the keys.

Mainly Initial Coin Offerings have three stages:-

  1. Pre-Distribution Phase
  2. Distribution Phase
  3. Exchange PhaseWhat is Initial Coin Offering (ICO)

I am sharing a website that provides ICO solutions for the company and also providing software.

https://www.icoclone.com/

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